The news: The 43rd annual JP Morgan Healthcare Conference kicked off this week and a number of developments have already emerged from the event.

Here are two main themes that caught our attention:

1. Investors are optimistic about healthcare and pharma dealmaking. This sentiment was unanimously expressed by 17 healthcare dealmakers at the event who spoke with Reuters. A turnaround would be welcome after a slowdown last year in which no biopharma transactions over $5 billion closed for the first time in at least a decade.

Almost as if on cue, Johnson & Johnson announced it would buy neurological drugmaker Intra-Cellular Therapies for $14.6 billion. The transaction marks the pharma titan’s biggest deal in at least two years. And Eli Lilly is acquiring an experimental cancer program from startup Scorpion Therapeutics in a deal worth up to $2.5 billion, as the drugmaker broadens its oncology pipeline.

Dealmakers are optimistic an M&A rebound will happen under the incoming administration. President-elect Donald Trump’s nomination of Andrew Ferguson to lead the FTC and replace Chair Lina Khan reflects a more pro-business posture.

2. AI-focused partnerships are being powered by heavy-hitter healthcare investors.

Tech giant Nvidia—the world’s most valuable company with a current market cap of $3.2 trillion—announced three new tie-ups:

1. The chip maker will work with IQVIA to build custom genAI models based on the latter’s treasure trove of clinical research and consumer data.
2. It’s partnering with Illumina to analyze genomic data in support of drug discovery.
3. It will also work with the Mayo Clinic to accelerate the development of digital pathology models by using the health system’s library of 20 million whole-slide images.

Nvidia joins heavyweight venture capital firms spearheading activity that’s likely to capture industry attention during the conference.

• Just last week, startup Hippocratic AI bagged $141M in Series B funding from the likes of General Catalyst, Andreessen Horowitz (a16z), and Nvidia.
• In the days since, General Catalyst announced a partnership with Amazon Web Services (AWS) in which the VC firm’s portfolio companies—starting with Aidoc and Commure—will use AWS’ services to develop and launch AI tools for health systems.
• a16z, meanwhile, tied up with Eli Lilly to launch a $500 million venture fund to advance the development of new medicines and AI-driven health technologies.

The final word: More aggressive dealmaking and M&A activity in the healthcare, pharma, and digital health spaces is almost a certainty for Trump’s second term.

Much of the activity will be driven by the AI arms race taking place across these industries.

• Case in point as it pertains to digital health: Funding for AI-enabled health tech startups comprised 37% of the overall sector’s funding in 2024, per Rock Health.
• This figure far exceeds the 19% of funding AI-enabled digital health startups accounted for in 2017.

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