AI Replaces Pharma and Fintech
The idea
I believe AI makes most of what big pharma and fintech do obsolete, and the value shifts to whoever uses AI better. So this basket owns the replacements: AI-first drug discovery companies and the biology tools they run on, AI-native lenders underwriting without the old playbook, and the platform owners that sell AI into both industries. I trimmed the most heavily shorted names and shifted that weight into names with less crowded bets against them, plus a small inverse health care position for direct exposure to the incumbents struggling.
What it owns
- These companies use AI and computational methods to design drugs before synthesis, replacing traditional trial-and-error labs with faster, cheaper digital-first research. · SchrödingerIt uses physics-based and machine learning software to design molecules computationally before synthesis, replacing years of laboratory trial and error., Tempus AIIt converts clinical and genetic data into AI tools that identify disease targets and patient populations, work traditionally done inside pharmaceutical research departments., AbCellera BiologicsIt uses AI and high-throughput screening to discover antibodies faster than traditional pharmaceutical research groups can achieve., Generate:BiomedicinesIt uses generative AI to design protein drugs, as demonstrated by large pharma partnerships choosing to license its designs rather than conduct internal research., AbsciIt uses generative AI to design antibodies, testing whether machine learning can perform the core creative work of pharmaceutical drug discovery., Recursion PharmaceuticalsIt runs drug discovery as an automated AI-driven platform, producing the same kind of research output as traditional pharmaceutical laboratories but faster and cheaper., Relay TherapeuticsIt models how proteins move to discover drugs that conventional screening methods cannot find, replacing static molecular analysis with dynamic computational biology.36%
- These companies sell the computing power, cloud services, and software that both drug discovery and lending AI systems run on, so they profit regardless of which industry segment wins. · NVIDIAIt supplies the chips that power nearly every AI drug discovery and lending model, plus builds its own biology tools, so it captures value across both industries., AlphabetIt owns Isomorphic Labs, a leading AI drug discovery company, and provides the cloud and AI models that both pharma and finance customers buy., Palantir TechnologiesIt sells AI software that processes data for banks and drugmakers rebuilding their operations around artificial intelligence.23%
- These lenders use AI models to approve credit without traditional scoring systems, automating the underwriting work that incumbent finance companies do manually. · Pagaya TechnologiesIt operates an AI network that helps lenders approve borrowers using data-driven models instead of traditional underwriting criteria., Upstart HoldingsIt uses machine learning to approve loans without traditional credit scores, replacing human underwriting decisions with AI models across financial institutions.12%
- These companies sell the software, synthetic DNA, immune mapping, and simulation tools that AI drug discovery platforms depend on, earning revenue from multiple discovery pathways. · CertaraIt sells software that simulates how drugs behave in the body, allowing companies to reduce or eliminate expensive laboratory and clinical trial phases., Adaptive BiotechnologiesIt maps the immune system at scale and converts that data into information for AI-powered drug discovery and diagnostic development., Twist BioscienceIt manufactures the synthetic DNA that AI biology laboratories need to test computational designs, earning revenue from every AI drug discovery pathway.12%
- This inverse fund moves higher when large health care stocks fall, providing direct exposure to the idea that traditional pharmaceutical companies lose market position. · ProShares UltraShort Health CareIt rises when health care stocks fall, providing a direct inverse position to the belief that incumbents in the sector lose share to AI-first competitors.5%
- This take groups companies positioned to benefit as artificial intelligence reshapes pharmaceutical development and financial services. · The company uses artificial intelligence to discover and develop new drugs, bringing machine learning to a historically slow and expensive process.3%
- Cash9%