Digital health interest shrinks while AI is still on the rise

While digital health funding levels in the second quarter of 2023 hit lows not seen since 2017, investors have ensured artificial intelligence remains on the rise in the healthcare space.

The global digital health market remained stagnant for several quarters before reaching its lowest level since the third quarter of 2017 at $3.4 billion, according to a July 26 report from CB Insights. In the first half of 2023, digital health reported $6.9 billion, which is half the total seen in 2022 and the lowest since 2015, according to an Aug. 22 report from the American Hospital Association.

While a majority of digital health funding in Q2 came from the U.S., it decreased by 80 percent in comparison to Q1. Meanwhile, investments in artificial intelligence applications — especially clinical support areas, diagnostic imaging and automated documentation technology — have remained on the rise.

Despite the opposite trends seen between the markets, generative AI is expected to become more prominent across digital health systems, Alex Lennox-Miller, a CB Insights analyst, said in the Aug. 22 report.

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