South Korea ramps up AI-driven drug development amid global investment surge

Seoul to invest 100 billion won over 3–5 years in AI drug discovery and antibody innovation

Illustrated by Chat GPT

The administration of South Korean President Lee Jae-myung, which has positioned itself as an “artificial intelligence (AI)-driven government,” is moving to expand support for AI-powered drug development—a sector attracting massive investment worldwide. From identifying therapeutic candidates to clinical trials and personalized treatments, AI is rapidly emerging as a critical tool across the pharmaceutical value chain. The South Korean government aims to reduce both the development timeline, which typically exceeds a decade, and the cost—estimated at around 2 trillion won ($1.46 billion)—by more than half.

Pharmaceutical and biotech companies around the globe are increasingly adopting AI, which can analyze vast datasets—ranging from chemical compound libraries to disease-related protein structures—at a speed and accuracy far beyond human capacity. According to the Korea Health Industry Development Institute, the global AI drug discovery market is projected to grow from $902.7 million (1.26 trillion won) in 2023 to $2.89 billion (4.06 trillion won) by 2028.

On July 4, lawmakers announced that the National Assembly’s Health and Welfare Committee approved a supplementary budget proposal jointly drafted by the Ministry of Health and Welfare and the Ministry of Science and ICT to support AI-based drug development. The funding will go toward initiatives aimed at building AI-enabled preclinical and clinical modeling capabilities and accelerating the development of antibody-based “biobetter” drugs through AI applications.

One effort, allocated 2.18 billion won ($1.57 million) this year, focuses on developing AI-powered platforms and technologies to identify therapeutic candidates and advance them into clinical trials. The government plans to invest a total of 49.5 billion won ($35.6 million) in the initiative through 2029.

Another program, receiving 3.3 billion won ($2.38 million) in initial funding, is centered on discovering and validating next-generation antibody drugs—known as biobetters—that offer improved efficacy or greater dosing convenience compared to existing biologics. Using dual-antibody technologies, the initiative is expected to receive 40.4 billion won ($29 million) in government support by 2027.

South Korea’s investment push comes amid a global boom in AI-driven pharmaceutical development. Major tech firms including Google, Amazon, and Nvidia are making large-scale investments in the sector, accelerating its advancement.

Isomorphic Labs, an AI drug discovery company under Alphabet, Google’s parent firm, signed co-development deals last year worth 2.4 trillion won ($1.7 billion) with U.S. pharmaceutical giant Eli Lilly and 1.7 trillion won ($1.2 billion) with Swiss drugmaker Novartis. In another major move, U.S.-based Recursion Pharmaceuticals acquired British AI drug developer Exscientia in a 1 trillion won ($720 million) deal.

By comparison, South Korea’s AI drug discovery ecosystem is still in its infancy. Thus far, only about 10 AI-identified drug candidates have entered clinical trials. Most remain in Phase 1, and just one—INV-001, a topical scar treatment developed by Innovo Therapeutics—has progressed to Phase 2.

Despite early interest and progress, most domestic players continue to operate at a loss. Innovo Therapeutics, widely viewed as a frontrunner in the field, posted a 13 billion won ($9.4 million) deficit last year. Pharos iBio, the first Korean AI drug developer to initiate clinical trials, reported a 12.6 billion won ($9.1 million) loss in 2024. Standigm, which had gained recognition for securing international investment, recently cut its workforce from 80 to 27 employees as part of a broader restructuring.

Graphics by Son Min-gyun