After buying Cyclica and Valence, Recursion secures $50 million USD from Nvidia for drug discovery

Computing giant Nvidia has invested $50 million USD in Recursion to fuel the development of its artificial intelligence (AI) drug-discovery technology, as part of a deal that will see the two United States (US) firms collaborate.

The investment comes shortly after Recursion acquired two emerging Canadian AI drug-discovery firms.

Recursion, a Salt Lake City, Utah-based biotech company with a Canadian presence, plans to use this funding to build its AI foundation models for biology and chemistry. The company also intends to distribute these models to other firms with Nvidia’s BioNeMo platform—a cloud service for generative AI in drug discovery Nvidia announced late last year.

As Nasdaq-listed Recursion looks to do just that, the company’s chief communications officer Ryan Kelly told BetaKit that the firm expects Canada to play a role.

The Nvidia investment comes shortly after Recursion acquired two emerging Canadian AI drug-discovery companies in Toronto’s Cyclica and Montréal-based Valence Discovery, and opened a new 28,000-square-foot Canadian headquarters in Toronto.

In May, Recursion announced agreements to buy Cyclica for $40 million and Valence for $47.5 million in stock. Both deals have since closed. According to Recursion, Cyclica and Valence have developed machine learning (ML) methods and models that complement the biotech company’s existing capabilities.

Currently, 100 of Recursion’s 580 employees are based in Canada, which houses the majority of the firm’s ML and engineering teams. Recursion’s Toronto office—its largest non-US site—plays home to the firm’s digital chemistry teams following its purchase of Cyclica. Valence, previously located at the Quebec-based AI research institute Mila, is joining forces with Recursion’s deep learning research office in Montréal, where it will become an AI and ML research centre.

“Toronto and Montréal have long been recognized as centers for cutting-edge technology, biology and chemistry,” said Kelly, who noted that Recursion’s recent acquisitions and new Canadian headquarters reflect its confidence in both the country’s talent pool and the biotech sector’s capacity to drive economic growth.

For Nvidia, which makes specialized chips designed to power AI products, the Recursion investment marks the latest in a series of bets on AI for the firm, which have helped fuel a recent surge in its stock price. As interest in AI has heated up, so has interest in Nvidia: in May, the company hit a $1-trillion market valuation, becoming the world’s first chip maker to do so.

Feature image courtesy Recursion.