The latest biopharma bet on AI: Merck’s $1B agentic AI deal with Google Cloud

Merck is making a big bet on AI. In April, the biopharmaceutical company announced a partnership with Google Cloud to deploy an agentic platform across its operations. This deal, worth up to $1 billion, is a part of the larger trend of drug companies pouring money into AI to drive efficiency and growth. 

Merck plans to deploy Google Cloud’s AI, including Gemini Enterprise, across its corporate structure, commercial operations, manufacturing and R&D.   

“AI agents and generative tools will help our teams around the world reimagine processes at scale and bring scientific breakthroughs to patients faster,” Dave Williams, the company’s chief information and digital officer, said in the press release announcing the partnership. 

This major investment in AI capabilities is not Merck’s first foray into AI. In 2025, the company described how an internal generative AI solution helps it shorten the creation of clinical study reports from weeks to days. The company reported that its generative AI-powered platform also reduces the number of errors in clinical study report drafts by 50%. 

At the beginning of the year, Merck offered more insight into how it is using AI. It developed two foundation models to drive faster discovery of therapeutic candidates. It is using AI to optimize site selection and patient matching for clinical trials. It reported that 80% of its workforce uses a proprietary AI platform to automate tasks. The company is using AI to understand and manage risk in its manufacturing supply chain. Merck is also using generative AI for its content and healthcare provider education.

As Merck invests in AI, it is also undergoing a multiyear plan to cut costs. It announced the initiative with its Q2 2025 financial results. As a part of that plan, Merck announced cutting 6,000 jobs from its headcount and plans to save $3 billion by the end of 2027, Fierce Pharma reports.   

AI in the biopharma space

Merck is not alone in making big investments in AI. Other major biopharmaceutical companies have made multimillion-dollar and billion-dollar deals to leverage this technology for faster drug discovery and manufacturing. 

In 2025, Novartis struck a deal with Relation to use the biopharmaceutical company’s Lab-in-the-Loop platform for drug discovery focused on atopic diseases. Novartis agreed to a $55 million payment, and it could pay Relation up to $1.7 billion for various milestones.   

In February, clinical-stage life science and technology company Iambic announced a multiyear agreement with Takeda. Through the agreement, Takeda will make payments to Iambic — for upfront costs, research and technology access — that could add up to more than $1.7 billion 

In March, biotechnology company Insilico Medicine and Eli Lilly announced a drug discovery partnership, which will enable Lilly to use Insilico’s Pharma.AI platforms. The deal is worth approximately $2.75 billion. Insilico also struck a $1.2 billion research deal with Sanofi back in 2022 

Lilly also has a co-innovation lab with NVIDIA; together, the two companies plan to spend up to $1 billion on compute, infrastructure and talent for the lab.   

More expensive deals like this are expected to follow in the biopharmaceutical space. In 2025, the market size for AI in the pharmaceutical industry was $4.35 billion. This year, that number is expected to increase to $6.16 billion. By 2031, the market size for AI in pharmaceuticals is projected to reach nearly $35 billion, according to Mordor Intelligence.  

Carrie Pallardy, a Chicago-based freelance writer and editor, began her career covering healthcare more than a decade ago. Her work has taken into many different industries, but covering healthcare delivery remains a constant focus. She can be reached at [email protected] or on LinkedIn.