The Convergence of AI and Pharma: Recursion Pharmaceuticals (RXRX), NVIDIA, and the Next Industrial Revolution

The Rise of AI-Generated Drugs → With NVIDIA’s computing resources, Recursion can accelerate the development of AI-discovered pharmaceuticals at an industrial scale.

I. Introduction

Every technological revolution begins with analysts tracking distinct megatrends—electric vehicles, AI, biotechnology, the Internet of Things. But the true force of transformation is not divergence, but convergence. It is in the intersections of these innovations where history is rewritten.

Think of the 1920s. The automotive boom wasn’t just about Ford or gasoline—it was about the fusion of breakthroughs in oil refining, electrical engineering, chemistry, and assembly-line manufacturing. The world didn’t just get faster cars; it got an entirely new industrial framework.

Today, we are witnessing the next great convergence: artificial intelligence is reshaping biotechnology, pharmaceuticals, and material science at an unprecedented scale. At the center of this transformation is Recursion Pharmaceuticals (RXRX)—a company applying AI to industrialize drug discovery.

But RXRX is not alone in this vision. NVIDIA (NVDA), the world’s AI leader, has taken a direct stake in Recursion, signaling that this isn’t just biotech—this is the next trillion-dollar AI play.

II. NVIDIA’s Investment in Recursion: A Defining Moment for AI in Drug Discovery

In 2023, NVIDIA invested $50 million into Recursion Pharmaceuticals, a move that solidified AI-driven biotech as a strategic frontier. This investment wasn’t just financial—it was a strategic alignment between two companies at the cutting edge of AI research.

Key aspects of this partnership:

• NVIDIA’s Supercomputing Power + Recursion’s Biological Data → The partnership aims to train AI models on one of the largest proprietary biological datasets in the world.

• Next-Gen AI Drug Discovery → NVIDIA’s GPUs are already the backbone of AI models in various fields. Now, they will power the next wave of drug discovery and material science.

• The Rise of AI-Generated Drugs → With NVIDIA’s computing resources, Recursion can accelerate the development of AI-discovered pharmaceuticals at an industrial scale.

III. The Recursion AI Engine: The Future of Pharmaceutical R&D

Recursion Pharmaceuticals (NASDAQ: RXRX) is redefining drug discovery by turning the lab into a machine-learning problem. Instead of relying on slow, manual experiments, Recursion uses AI to:

• Run millions of biological experiments per week with automated high-throughput systems.

• Analyze petabytes of chemical and biological data using deep learning models.

• Predict drug interactions, toxicity, and efficacy before they even reach human trials.

IV. Catalysts for RXRX’s Growth

1. NVIDIA’s Backing + AI Infrastructure Expansion

• Optimizing AI models for drug discovery using NVIDIA’s GPU-based cloud infrastructure.

• Scaling drug simulations exponentially, reducing the time to identify new treatments.

• Monetizing AI discoveries through licensing agreements with Big Pharma players.

2. Strategic Acquisitions and Big Pharma Partnerships

• Acquired Cyclica and Valence (2024) → Strengthened AI-based molecular drug design.

• Merged with Exscientia → Combined AI-driven drug discovery platforms.

  Collaborations with Roche and Bayer → Positioned to leverage big pharma’s commercialization infrastructure.

3. AI-Discovered Drugs in Clinical Trials

• REC-994 (Phase 2): Treating cerebral cavernous malformations.

• REC-2282 (Phase 2/3): Targeting NF2-mutated meningiomas.

• Idiopathic Pulmonary Fibrosis (IPF) pipeline: A high-value target with massive market potential.

V. Market Potential & Investment Opportunity

1. AI-Driven Pharma: A $50B+ Market Opportunity

• AI-driven drug discovery expected to grow at 40%+ CAGR over the next decade.

• The market for AI-powered drug development could exceed $50B by 2030.

• Early adopters like Recursion will have a significant first-mover advantage.

2. RXRX’s Potential Market Cap Expansion

• Current Market Cap (2025): ~$2.5 billion.

• Projected TAM by 2030: $50 billion+.

• High M&A Potential → Could be an acquisition target for Roche, Bayer, or even NVIDIA itself.

• Bull Case Valuation → If Recursion successfully commercializes multiple AI-driven drugs, its market cap could 10x to $20-30 billion in the next five years.

3. Institutional Investors Betting on RXRX

• NVIDIA ($50M investment) → AI-infrastructure leader backing RXRX’s computing power.

• Baillie Gifford (9.5%) → Deep-tech and life sciences investor.

• SoftBank Vision Fund (7.9%) → Major AI and automation fund.

• ARK Invest (6.2%) → Cathie Wood’s AI + biotech bet.

• BlackRock, Vanguard, Fidelity → Institutional backing from top asset managers.

VI. Conclusion: AI + Pharma is the Next Industrial Revolution

History shows that true revolutions happen when industries converge. Just as the 1920s combined oil, electricity, and automobiles to reshape the modern world, today’s convergence of AI, biotech, and material science will redefine medicine.

Recursion isn’t just a biotech company—it is an industrial AI lab, one that has already attracted NVIDIA, the world’s most important AI company, as an investor.

This is not about a single stock. It’s about the next trillion-dollar AI transformation.

And like every great technological revolution, the biggest returns will go to those who see the convergence before everyone else does.

Thanks for reading,

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Guillermo Valencia A

Cofounder of Macrowise

February 18th, 2025

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