The global generative AI in healthcare market is poised for explosive growth, projected to rise from USD 3.3 billion in 2025 to USD 39.8 billion by 2035, at a compound annual growth rate (CAGR) of 28%. This surge is driven by the technology’s transformative potential in addressing critical challenges in healthcare, including clinical workflow inefficiencies, rising costs, physician burnout, and the high failure rate of drug candidates—over 90% of which fail in late-stage trials. Generative AI, which creates data-driven outputs such as text, images, and insights, is being leveraged to automate administrative tasks, improve diagnostic accuracy, personalize patient care, and accelerate drug discovery. A key driver of adoption is the potential for significant cost savings. Generative AI could reduce administrative burdens by up to 85%, cut diagnostic errors by 85%, and lower nursing overtime by 21%, potentially saving hospitals nearly USD 469,000 over three years. On a broader scale, automating administrative processes alone could generate up to USD 150 billion in annual savings across the healthcare sector. The market is segmented by purpose, offering, application, end-user, and geography. By purpose, clinical-based applications currently dominate, as they directly enhance patient care and support clinician decision-making. By offering, platform and technology solutions hold the largest share—accounting for nearly 75% of the market—though the services segment is expected to grow at a faster pace. In terms of application, the treatment segment leads, driven by AI’s ability to improve treatment efficacy and personalize care. Healthcare providers are the largest end-users, benefiting from enhanced operational efficiency, data-driven insights, and cost reduction. Geographically, North America currently leads the market, supported by strong innovation, investment, and early adoption. However, the Asia-Pacific region is expected to grow at the highest CAGR, fueled by increasing digital health investments and expanding healthcare infrastructure. The competitive landscape is dominated by mid-sized firms, with 79% headquartered in North America. Over 85% of companies offer AI platforms to streamline healthcare processes, and 27% serve both healthcare providers and pharmaceutical/biotech firms. Strategic partnerships are surging, with nearly 90% of deals signed in the last two years, reflecting strong collaboration between AI developers and healthcare organizations. Key players in the space include companies focused on drug discovery, medical imaging, clinical documentation, and patient engagement. The report provides detailed profiles of leading firms, including their financials, product portfolios, recent developments, and future outlooks. It also analyzes partnerships, use cases, and company competitiveness based on strength and service offerings. Despite the promise, challenges remain. Ethical concerns around data privacy, algorithmic bias, and model transparency require robust governance frameworks. As generative AI becomes embedded in clinical and operational workflows, ensuring accountability and regulatory compliance will be critical. Overall, the convergence of rising healthcare costs, workforce shortages, and rapid AI advancements is accelerating investment and innovation. With strong backing from pharmaceutical companies, healthcare providers, and investors, the generative AI in healthcare market is set for sustained expansion, reshaping patient care, research, and operational efficiency across the globe.