Underestimating AI in Healthcare (Daisy Wolf, Adela Tomsejova, Jay Rughani, and Vijay Pande, December 13, 2023, Andreesen horowitz)
In the 2000s, technology radically changed not just how stocks were traded, but the decision behind which stocks to trade. Firms like Citadel, DE Shaw, and Two Sigma started to employ High Frequency Trading, computer algorithms capable of executing thousands of trades per second.
Quants, the algorithm writers, overtook master traders, who manually studied companies. Algorithms overtook hunches. The quant funds who led the pack raked in hundreds of billions of dollars.
100% of stock trades used to be made by humans. Today, 80% are made by computer algorithms.
AI is about to bring a similar revolution to healthcare.
Over the next few decades, at least half of the $4.3 trillion dollar American healthcare industry will be AI-driven.
AI will drive drug discovery, proposing medicines not yet dreamed up by man. AI will play a key role in diagnosis, helping humans know what’s wrong sooner so they can get access to life-saving treatments. AI will change how care is delivered, as every human will have a world-class AI doctor in their pocket. And AI will eliminate a lot of the infuriating back office minutia in healthcare.
The markets are significantly undervaluing this opportunity.