The global artificial intelligence (AI) in drug discovery market is projected to grow from USD 6.93 billion in 2025 to USD 16.52 billion by 2034, expanding at a compound annual growth rate (CAGR) of 10.10%. This growth is driven by increasing investments in healthcare and pharmaceutical technologies, rising demand for faster and more cost-effective drug development, and the growing adoption of advanced AI algorithms in target identification, molecule design, and clinical decision-making. North America held the largest market share in 2024 at 56.18%, led by the United States, which is a global leader in AI innovation and biopharmaceutical R&D. The U.S. market is expected to grow from USD 2.86 billion in 2025 to approximately USD 6.93 billion by 2034, reflecting a double-digit CAGR of 10.26%. This momentum is fueled by strong government support, a thriving ecosystem of AI startups, and significant investments from major pharmaceutical companies. The Asia-Pacific region is poised to be the fastest-growing market, with a projected CAGR of 21.1% from 2025 to 2034. Rapid advancements in healthcare infrastructure, increased government and private investment in biotechnology, and the growing use of AI and big data in drug development are key drivers. China, in particular, is emerging as a major player, with major companies building large medical databases and leveraging AI for personalized medicine and drug discovery. Oncology remains the dominant application segment, driven by the rising global prevalence of cancer and the need for targeted therapies. However, the infectious diseases segment is expected to grow at the fastest pace, supported by AI’s role in accelerating diagnostics, antibiotic discovery, and pandemic preparedness. In terms of drug types, small molecules currently hold the largest market share due to their established development pathways and compatibility with AI-driven design. Large molecules, or biologics, are expected to grow the fastest, reflecting increasing demand for complex therapies to treat chronic and rare diseases. Machine learning, including deep learning, remains the leading technology, enabling predictive modeling across all stages of drug discovery. The software segment dominates the offering landscape, but AI services are expected to grow rapidly as companies seek expert support in implementing AI platforms. Pharmaceutical and biotechnology companies are the primary end users, leveraging AI to reduce R&D costs, shorten development timelines, and improve success rates. Academic and research institutions are also seeing strong growth, supported by government funding and expanding R&D initiatives. Key trends include the use of generative AI for de novo molecule design, AI-integrated lab automation, and personalized drug development. Major players such as NVIDIA, Microsoft, Insilico Medicine, Schrödinger, and Exscientia are driving innovation through partnerships and platform enhancements. Recent developments include Variational AI’s USD 5.5 million seed extension round, Innophore and NVIDIA’s launch of the AI-powered CavitOmiX platform for drug safety screening, and Reid Hoffman’s entry into healthcare via Manas AI, focused on AI-driven cancer drug discovery. As the broader drug discovery market expands—projected to reach USD 158.74 billion by 2034—AI is becoming an indispensable tool for improving efficiency, reducing failures, and accelerating the delivery of life-saving therapies. The synergy between AI and drug discovery is transforming the pharmaceutical industry, making R&D faster, smarter, and more precise.