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.
