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Why big pharma is teaming up with AI giants to speed up drug discovery and make work easier for health care workers

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AI chip maker Nvidia’s fresh partnerships with Eli Lilly and Johnson & Johnson point to a broader trend in the pharmaceutical industry, where tie-ups with AI giants are intended to speed up drug discovery and make work easier for health care workers.

“We want everything to move really, really fast and we want to get a new molecule that’s going to change the world in another six months,” says Diogo Rau, Eli Lilly’s chief information and digital officer. But despite that urgency, Rau acknowledges that science still takes time. New drug discovery can take well over a decade and well north of $2 billion, on average, before they can obtain regulatory approval.

Rau and Eli Lilly are betting that AI can speed things up. In late October, the company announced plans to create a new Nvidia-chip powered “supercomputer” and “AI factory” that will go online by early 2026, allowing scientists to utilize models trained on millions of experiments to test new therapies. Some of the proprietary AI models will be made available on Lilly TuneLab, a platform that Lilly launched in September that gives smaller biotech firms access to AI models that have been trained on the larger firm’s research.

Separately, J&J on the same day, announced its own partnership with Nvidia, relying on the AI company’s foundation models to create simulated environments for surgical teams to plan their kidney stone procedures. J&J says this application of so-called “physical AI” will optimize the process to map out procedures, make it easier to train doctors, and will result in more consistent and better clinical outcomes for patients.

“There’s only so many hours in the day,” says Neda Cvijetic, senior vice president and global head of robotics and digital research and development for J&J’s MedTech division. “Sometimes it’s super helpful to see that difficult case in a very realistic, simulated environment first, to help best prepare.”

The pharmaceutical and medical products industries can potentially unlock tens of billions in value from investments in generative AI alone if the sector is successfully able to deploy the technology to improve drug discovery, speed up clinical trials and the regulatory process, and more adeptly market and administer new treatments to the right patients. 

But there still remains a bit of a gap between the highly specific AI use cases that are most powerful for the life sciences industry and the technologies that AI hyperscalers offer today. Recently, solutions have become more tailored for the sector, partly reflected by partnerships emerging between Eli Lilly and J&J with Nvidia, and also Novo Nordisk’s relationship with Anthropic and Amazon Web Services, as well as AI hyperscaler’s own efforts. Last month, Anthropic launched Claude for Life Sciences, which was designed to speed up R&D.

Delphine Zurikiya, a senior partner in both the life sciences and technology practices at McKinsey, said that until recently, AI hyperscalers were spending most of their time working with chief information officers. But as AI budgets have expanded and use cases proliferated, there’s been more interest in business-specific applications for those technologies all across the pharmaceuticals industry.

“The business leaders have less patience with generic platforms,” says Zurikiya. “They’ll want something that’s customized to what they need.”

“We don’t even just want the life sciences knowledge model,” says Rau. “We want one that knows Lilly.” 

Lilly’s Chief AI Officer Thomas Fuchs adds that the greatest AI advancements will come from the combination of the company’s trove of proprietary data, the compute investments Lilly is making to train large foundation models, and then deploying that tech to thousands of chemists and biologists, who can use those AI tools to make new discoveries.

Fuchs says that precise science can’t be echoed for every large pharmaceutical company. That would be like an astronomer relying on a telescope sold by a big-box retailer. “We are building a space-based telescope,” says Fuchs.

Kimberly Powell, a VP of healthcare at Nvidia who worked on the J&J surgical AI project, touts the potential for physical AI to tap the advancements of computer vision technology and large language models to turn AI into physical workers.

While that may raise questions about the impact of AI on the job of a surgeon, Powell points to data from the World Health Organization that projects a shortfall of 11 million health workers globally by 2030. She also predicts that a new operating room—a hybrid mix of human surgeons working alongside physical robots and digital agents—could result in breakthroughs in new procedure techniques.

“There is a future goal of how we go from robotic-assisted surgery to robotic surgery, where the robot is actually taking some action on its own,” says Powell. “We’re laying all the groundwork to do that.”

John Kell

Send thoughts or suggestions to CIO Intelligence here.

NEWS PACKETS

Cloudflare outage ensnares OpenAI, X. Service was disrupted across the web on Tuesday as Cloudflare, a web infrastructure provider, says it was impacted by a crash in the software system that handles traffic for a number of the company’s services. Cloudflare added that there was “no evidence” that the disruption was due to an attack or caused by any malicious activity. “We now have AWS, Azure and Cloudflare outages in the span of a month,” said David Choffnes, a professor of computer science at Northeastern University, toldThe New York Times. “That’s a very large portion of the biggest cloud providers in the world.”

TurboTax maker Intuit and OpenAI strike deal. Intuit has struck a multiyear deal with OpenAI that will expose the business and financial software provider’s products, which includes QuickBooks and Credit Karma, to a broader range of potential users on OpenAI’s ChatGPT, according to The Wall Street Journal. Intuit will also gain substantial access to OpenAI’s APIs, which the companies say will allow the tech giant to explore more use cases across its business. The companies also announced that they expect the deal will generate more than $100 million in revenue for OpenAI over an unspecified number of years.

Big Tech’s profits linked to AI hyperscaler losses.WSJ also reported last week that strong quarterly profits from the likes of Alphabet, Amazon, and Microsoft highlighted AI-related profits coming from being a supplier to, or an investor in, private companies like OpenAI and Anthropic. But the AI hyperscalers are continuing to lose billions as they invest in chips and cloud computing to support their large language models. That means that investors will have to continue to shoulder billions in costs in the hopes that these AI companies can sell more revenue-generating products to cover the money they spend on computing and research. Are we in an AI bubble? No one can say for sure. But U.S. stocks are under pressure in recent days amid concerns about frothy valuations.

No real sign of investor fatigue as Databricks is in talks to raise billions more. Data analytics startup Databricks is reportedly in talks to raise funds at a valuation north of $130 billion, which Bloomberg reports would be a 30% increase in what the company was worth just back in September. Databricks would use the fresh funding for hiring and acquisitions, though it hasn’t signed a term sheet, according to the outlet, which cited initial reporting from the Information. Bloomberg also reports that there are some whispers of caution when it comes to AI investing, citing two examples in Peter Thiel’s hedge fund and SoftBank Group both recently disclosing exits from AI chip maker Nvidia.

Anthropic thwarts AI cyberattack. The AI startup behind the large language models named Claude disclosed that it was able to disrupt what it called the first large-scale cyberattack that was orchestrated predominantly by AI, a campaign that it first detected in mid-September in which hackers used AI agents “to an unprecedented degree—using AI not just as an advisor, but to execute the cyberattacks themselves.” Anthropic said that it also had “high confidence” that the threat actor was a Chinese state-sponsored group. Separately last week, on a more positive note, Anthropic also announced it would invest $50 billion in new data center infrastructure.

ADOPTION CURVE

Identity-driven cyber attacks vex IT and the majority see new risk from agentic AI. The overwhelming majority of companies have experienced a cyber attack in the past year and agree that identity-driven breaches—which includes phishing and social engineering campaigns—are the top threat to their organizations, according to a recent survey of 1,625 IT and security leaders by Rubrik Zero Labs and Wakefield Research.

Rubrik says IT leaders have been evolving their approach in how they aim to protect identities within their firms, initially prioritizing privileged accounts, which have greater access to sensitive data and systems. But today, when asked which identities they are most concerned about, they are nearly evenly split on all five identity groups: executive, third-party, general end-users, privileged, and machine.

They’re also less confident in their resiliency: with only 28% believing they could fully recover from a cyber incident in 12 hours or less, compared to 43% in 2024. And looking ahead, 58% of those surveyed believe that agentic AI will drive half or more of the cyberattacks that they face in the coming year.

Courtesy of Rubrik Zero Labs

JOBS RADAR

Hiring:

– MIT Lincoln Laboratory is seeking a CIO, based in Lexington, Massachusetts. Posted salary range: $360K-$410K/year.

– MELE Associates is seeking a CIO, based in Rockville, Maryland. Posted salary range: $150K-$180K/year.

– GE Aerospace is seeking an executive CTO for the company’s defense and systems division. The role is remote. Posted salary range: $250K-$325K/year.

– Sentry is seeking a head of IT, based in San Francisco. Posted salary range: $200K-$250K/year.

Hired:

– Warner Music Group has promoted Leho Nigul to the role of CTO after previously serving as SVP of engineering. The music entertainment company also announced that Ariel Bardin, president of technology, will leave the company after a three-year tenure in that role. He will remain at Warner Music until the end of 2025 to help with the leadership transition. Before joining WMG in 2023, Nigul held leadership roles at grocery delivery company Instacart and tech giant IBM.

– Douglas Elliman Realty announced the appointment of Chris Reyes as CTO, joining the residential brokerage from real estate firm Brown Harris Stevens, where he also served as CTO. In his new role, he will oversee the company’s tech team, infrastructure, product launches, and software development. Reyes also previously served as CTO at mortgage lender GuardHill Financial.

– SmartRent has appointed Sangeeth Ponathil as CIO, joining the real estate software company to architect IT systems and expand the use of AI and automation. Ponathil will lead the engineering, product development, applications, security, data, and support teams. He most recently served as SVP of technology and head of product engineering at mortgage products company loanDepot.

– Avoya Travel named Karl Treier as CTO, a newly established C-suite role, where he will lead the IT and product development teams. Treier joins the travel booking service provider after spending eight years on the private equity consulting team for accounting firm RSM. He has also served as CTO for multiple organizations, including software developer Bluespring.

– McAfee & Taft appointed Mark Wyckoff as CIO, where he will steer the IT team, as well as the cybersecurity and compliance initiatives. Prior to joining the Oklahoma law firm, Wyckoff served as SVP of technology, CIO, and HIPAA security officer for the eye care company Dean McGee Eye Institute.

– Infravision appointed Frank Tybor as CTO, joining the developer of aerial robotics intended to build power grids just a couple weeks after the startup disclosed it raised $91 million in a Series B funding round. Tybor previously served as CTO at space infrastructure company ThinkOrbital and spent six years in engineering roles at rockets and spacecraft maker SpaceX.

– End of an Era announced Ken Schirrmacher has been named as CTO, joining the estate planning company to oversee all aspects of product architecture, AI innovation, and data security. He previously served as CTO of airport parking operator Park ‘N Fly and at cybersecurity company ObligeAI.

– Altus named Tarn Shant as CTO, joining the debt collection agency after most recently serving as SVP of technology at outsourcing company iQor. As CTO, Shant will lead Altus’ technology and data science team, overseeing the integration of AI, predictive analytics, and platform modernization.



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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