In late November, 's (OTC: RHHBY) subsidiary Genentech and the chipmaker Nvidia (NASDAQ: NVDA) agreed to collaborate on developing new medicines using artificial intelligence (AI) over the next few years. While the pair didn't announce the financial terms of their partnership, the move is just one of a slew of similar deals between big pharmas and businesses making AI platforms to improve the drug discovery and development process.

Now, investors are left grappling with the question of what to make of the announcement, given that few concrete details are available. Let's clear up some of the confusion by putting the new collaboration into context and discussing some of its likely goals and impacts in the near future.

In theory, AI has a lot to offer drug developers like Roche. The drug development process can take upwards of a decade, not to mention billions of dollars in research and development (R&D) expenses. Even under the best conditions, candidates for new medicines can fail to perform as anticipated when tested in clinical trials, and failures are the rule rather than the exception.

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Source Fool.com