Healthcare activities of Big Tech and retail players in Q1 2024

Note: Activities refer to initiatives by the above companies across industries under SPEEDA Edge’s Health & Wellness and Pharma & Life Sciences verticals

Source: Compiled by SPEEDA Edge

Key takeaways

• Overall activity witnessed a slight dip (30 activities tracked in Q1 2024 vs. 36 tracked in Q4 2023): In particular, after a notable rebound during Q4 2023, activities among retailers slowed during the quarter, accounting for only 10% of all activities tracked (down from 33% during Q4 2023).

• Alphabet continued to dominate activity: The tech giant accounted for 63% of all Big Tech activity and 57% of all healthcare activity. Over two-thirds of its activities were concentrated in primary care, with Hospital Management and Telehealth being the main focuses. After gradually making inroads during previous quarters, Alphabet, through Isomorphic Labs, picked up activity around AI Drug Discovery. In addition, the company showed interest in the Clinical Decision Support Systems, Hospital Interoperability, Digital Wellness, and Beauty Tech domains. 

• As in Q4 2023, CVS Health was the only active company among the retailers. Although at reduced levels compared with the previous quarter (10% of overall activity in Q1 2024 compared with 11% in Q4 2023), the retail giant pursued both partnerships and investments in the healthcare space. 

• Alphabet, through Google Cloud, continued to launch new GenAI solutions tailored for healthcare and life sciences. The latest offering is Vertex AI Search for Healthcare, a search tool aimed at enhancing patient outcomes, improving data interoperability, and establishing a robust data foundation. The tool offers features such as a medically tuned search, configurable APIs, the capability of answering questions, factuality, data platform integration, and deeper medical understanding offered through integration with MedLM tools. Google Cloud also introduced new features to its Healthcare Data Engine (HDE), which include 1) low-code data mapping through HDE Data Mapper for efficient transformation of data into the fast healthcare interoperability resources (FHIR) format and 2) integration with Vertex AI Search to support data analysis to help clinicians manage information and save time. The new offerings and enhancements have the potential to drive Alphabet’s healthcare activities in the future.

• Alphabet’s Google Cloud also enhanced the capabilities of MedLM, which was launched in December 2023. It introduced new features, including 1) MedLM for Chest X-ray, which classifies chest X-rays for different use cases, and 2) Condition Summary API, which provides AI-generated chronological lists and summaries of patient conditions with citations. 

• Meta focused on leveraging its VR headsets to penetrate the healthcare space. During the quarter, the company collaborated with Headspace to launch Headspace XR, an immersive mindfulness and meditation app. At the same time, after a setback following a ban on selling watches with blood oxygen sensors in the US, Apple is focusing on touting Vision Pro as a healthcare tool, igniting competition in this space.

• Investment activity slowed (four investments tracked in Q1 2024 vs. eight in Q4 2023). Alphabet was the only Big Tech player to invest in the healthcare sector, while CVS Health was the only retailer to do the same. As in the previous quarter, CVS Health was able to single-handedly match the number of investments made by Big Tech players, focusing on areas such as primary and holistic care.

• M&A activity remained muted. A year after Amazon acquired One Medical, the tech giant continues to actively integrate its operations by building on existing healthcare networks, introducing new healthcare offerings, and re-organizing business structures.

• Big Tech companies are likely to keep pushing forward with the AI drive. Alphabet, through Google Cloud, is planning to expand MedLM's capabilities to further support healthcare and life science organizations. Amazon and Microsoft are also likely to leverage their product offerings to keep up in the race. Nevertheless, growing demand for accessible and affordable healthcare would result in Big Tech and retailers plotting strategies for a bigger piece of the pie. Expanding reach in primary care would be a focus area for these players to consolidate their presence; in particular, Amazon is aspiring to build a “frictionless” future in healthcare and is focusing on expanding One Medical's partnership network across the US and integrating it with other internal business units.

Number of activities by company during Q1 2024

Acquisitions: One year on, the pause remains

Analyst Take: Both Big Tech and retail giants were betting big on primary care during 2022 and the first quarter of 2023, with several acquisitions to establish their presence in the healthcare space. Amazon’s acquisition of One Medical, CVS Health's acquisition of Oak Street Health, and Walgreens’ acquisition of Summit Health through VillageMD were notable deals. However, recent employee layoffs, restructuring of the healthcare businesses of Amazon and Walgreens, and closure of their medical offices and clinics signal that these companies are still integrating and optimizing business operations post-acquisition. This has resulted in a pause in M&A activity among these players.

Partnerships: The AI revolution continues to fuel collaborations among Big Tech

Analyst Take: Partnerships remain the most preferred channel for both Big Tech and retailers to penetrate the healthcare space. Notably, recent interest in integrating AI and GenAI tools into clinical workflows has fueled partnerships with healthcare systems and Big Tech players such as Alphabet, Amazon, and Microsoft. 

During Q4 2023, Microsoft launched new AI and GenAI features specifically targeting the healthcare sector, leading to increased partnerships with early adopters. During the last quarter, Alphabet, through Google Cloud, also launched MedLM, a family of GenAI models specifically designed for medical applications, which also gained notable traction. The trend continued this quarter, as Alphabet, through Google Cloud, launched new GenAI solutions tailored for healthcare and life sciences and enhanced its existing offerings. These developments are poised to spur further collaboration.

Big Tech

• Alphabet continued to collaborate to integrate AI into the healthcare sector. During the quarter, the company entered partnerships with PYC Therapeutics, Eli Lilly, and Novartis to advance efforts in AI Drug Discovery. The tech giant, through Google Cloud, also partnered with Community Health Systems, WellSky, and eConsult Health to leverage its GenAI tools to streamline and increase efficiencies in clinical workflows. In addition, Alphabet leveraged Google Cloud’s advanced data management capabilities to form alliances with Atropos Health, Cera, and Verato.

• Amazon broadened its scope beyond improving healthcare access to focus on AI-powered healthcare services. During Q1 2024, the tech giant, through AWS, partnered with DeepScribe and symplr to automate clinical documentation and complex workflows using AI. Amazon, through AWS, also partnered with Pinnacle Technology Partners and Owkin to harness the power of AI in Clinical Trial Technology and AI Drug Discovery, respectively. In addition, on the primary care front, Amazon collaborated with Omada Health to enhance cardiometabolic care through its new Health Condition Programs and with Eli Lilly to deliver medications for selected medical conditions through Amazon Pharmacy.

• Microsoft also continued its AI drive with a new partnership aimed at AI-enabled drug discovery. During the quarter, the tech giant, through Microsoft Research, partnered with the Global Health Drug Discovery Institute to accelerate drug discovery for global infectious diseases using GenAI and foundation models. Using AI models for molecule generation, the team was able to identify, optimize, and confirm potential treatments in record time, promising more efficient treatment solutions for infectious diseases in the future.

• Oracle focuses on further penetrating the Clinical Trial Technology space. Following successful trial launches in the Asia-Pacific, Oracle expanded its partnership with ObvioHealth, a digital clinical trial firm, to streamline data capture, integration, and analysis for worldwide clinical trials. The expansion is expected to offer a larger pool of data for sponsors, which will be complemented by competent data maintenance capabilities through Oracle’s Clinical One solution.

• Meta leveraged its VR headsets to collaborate in the Digital Wellness space. The Quest-maker partnered with meditation app provider Headspace to launch Headspace XR, an immersive mindfulness and meditation app.

Summary of Big Tech players’ partnerships in Q1 2024

Note: Collaborations of Alphabet and Amazon with other health systems to launch the Coalition for Health AI (CHAI) and Microsoft’s alliance with 16 health systems to form the Trustworthy & Responsible AI Network (TRAIN) were not taken into account

Source: Compiled by SPEEDA Edge

Note: Collaborations of Alphabet and Amazon with other health systems to launch the CHAI and Microsoft’s alliance with 16 health systems to form the TRAIN were not taken into account

Retail

• CVS Health continued to focus on primary care. The retail giant partnered with the Ohio State University Wexner Medical Center to establish an Accountable Care Organization to improve healthcare services for Medicare recipients in central Ohio. The collaboration focuses on enhanced patient care, offering coordinated care to a larger patient population, and aims to support post-hospitalization transitions, cater to high-risk beneficiaries, and strengthen overall healthcare management.

Investments: Amidst a downturn in activity, Alphabet and CVS emerge as focal points

Analyst Take: In the recent past, most Big Tech and retailer investments have been in companies focused on primary and holistic care. Overall, Alphabet and CVS Health have been the most consistent players in channeling investments to the healthcare space. In particular, CVS Health has been betting on Abridge ​​to gain traction for its AI-enabled healthcare solutions. In October 2023, the retail giant, through CVS Health Ventures, participated in Abridge’s USD 30 million Series B funding round and continued to support the startup by participating in its USD 150 million Series C funding round in February 2024.

Big Tech

• Alphabet was the only Big Tech to stack investments during the quarter. The tech giant, through Google Ventures, participated in Oula’s USD 28 million Series B funding round to support the launch of new services and expand its technology-enabled hybrid care approach to more markets. It also took part in Fabric’s USD 60 million Series A funding round to support team expansion, platform enhancement, and strategic acquisitions.

Retail

• CVS Health was again the lone retailer to pursue investments for the second consecutive quarter. Through its venture capital arm CVS Health Ventures, the company participated in Abridge‘s USD 150 million Series C funding round in February 2024. The proceeds were aimed at accelerating Abridge’s R&D efforts. In addition, CVS Health Ventures participated in Vita Health’s USD 22.5 million Series A funding round to support the latter's expansion efforts.

Appendix

Large incumbents in primary care