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Microsoft has reached a deal with pharmaceutical giant Novartis that aims to bring the power of artificial intelligence to drug discovery.

“AI is perhaps the most transformational technology of our time, and healthcare is perhaps AI’s most pressing application,” Microsoft CEO Satya Nadella said in a video announcing the partnership.

The five-year deal will establish an “AI innovation lab” at Novartis and create co-working centers at Novartis’ offices in Switzerland and Dublin, and at the Microsoft Research Lab in Cambridge, England. The idea is to arm Novartis’ employees with the AI and cloud computing firepower needed to discover next-generation medicines.

Tech rivals Google and Amazon are also vying to convince researchers and drugmakers to use their AI and cloud platforms to solve complicated scientific problems. Google’s DeepMind this year won a competition against top researchers in which it predicted how disease-fighting proteins fold. Amazon’s efforts to win over drug discovery teams have landed the company customers like AstraZeneca, Merck and Celgene.

Novartis plans to deploy Microsoft’s AI tools across the entire drug development process, including research, clinical trials, manufacturing, operations and finance. The companies are initially focusing on the following projects:

  • creating personalized therapies for macular degeneration, which causes blindness;
  • improving the manufacturing of gene and cell therapies with AI, starting with acute lymphoblastic leukemia; and
  • using neural networks to identify molecules that may be used to treat diseases.

“Developing new drugs has become as much an AI and data science problem as it is a biology and chemistry problem,” Microsoft Healthcare corporate vice president Peter Lee wrote in a blog post. “The impact in terms of lives saved worldwide would be enormous if we could make inventing new medicines faster.”

Microsoft and Novartis previously worked together on a program to assess the neurodegenerative disease multiple sclerosis using Microsoft Kinect.

While the companies did not disclose the financial details of the deal, Microsoft’s previous work with life sciences companies offers clues as to how it approaches such alliances. In collaborating with Seattle-based Adaptive Biotechnologies on an AI-powered universal blood test, Microsoft invested $45 million in exchange for a commitment by Adaptive to spend $12 million on Azure cloud services over seven years and a promise to host the platform they create on Microsoft’s cloud.

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