The integration of artificial intelligence (AI) into the life sciences sector is reshaping how the industry operates and influences real estate portfolios. From advancements in drug discovery to operational optimizations, AI’s potential is enormous—but it also presents new challenges. As companies like Xaira Therapeutics and Recursion Pharmaceuticals gain substantial investments, and achievements like Google DeepMind’s AlphaFold revolutionize the field, the impact of AI on life sciences real estate is becoming increasingly clear.
Here are three key ways AI is set to transform the sector:
1. Elevated Infrastructure Demands and Costs
AI adoption necessitates enhanced electrical and technological infrastructure, particularly in data centers. High-performance computing requirements drive innovations such as:
- Advanced Hardware: Increased reliance on GPUs and liquid cooling systems.
- Data Center Expansion: Growing demand for facilities designed to support power-intensive AI applications.
The competition for data center space is heating up. As highlighted in CBRE’s North America Data Center Trends H1 2024 report, nearly 80% of 3,871.8 MW under construction in primary markets was preleased, with significant portions claimed by AI providers. However, challenges such as power shortages and delays in electrical upgrades continue to impact timelines.
To stay competitive, life sciences companies must strategically align their real estate, technology, and business operations to address these evolving needs. Decisions regarding on-premises server capacity, outsourcing, and cost management will be critical as the demand for data centers continues to rise.
2. Shifting Workforce and Space Requirements
AI is not only reshaping infrastructure but also redefining workplace dynamics:
- Headcount Changes: AI adoption creates demand for highly skilled professionals, particularly in biotechnology.
- Workplace Evolution: Enhanced collaboration spaces and quality work environments are becoming essential.
According to CBRE’s Artificial Intelligence and the Future of Workplace report, the need for innovation and collaboration will drive life sciences companies to invest in upgraded facilities and amenities. Additionally, the rise in AI-related job postings—tripling between 2020 and 2023—underscores the competitive need to attract and retain top talent.
As expectations for workplace experience evolve, organizations must rethink office design to foster creativity, connection, and innovation while meeting the demands of a tech-driven workforce.
3. Unpredictable Clinical Outcomes
While AI shows promise in accelerating drug discovery, the industry is still in the early stages of adoption:
- Clinical Progress: Since 2015, 75 AI-discovered molecules have entered clinical trials, with Phase 1 success rates of 80%-90%, well above industry averages.
- Uncertainty Ahead: Despite advancements, no AI-developed drugs have yet been approved, leaving many questions unanswered.
This uncertainty requires life sciences companies to remain flexible with their real estate portfolios, particularly for lab and office spaces. Future adaptability will be crucial as the AI landscape evolves, ensuring that companies can scale operations to meet changing demands.
Navigating the AI Era in Life Sciences Real Estate
AI’s transformative potential in life sciences is undeniable, but it also presents unique challenges and uncertainties. By proactively preparing their real estate strategies, biotech companies can remain agile, fostering innovation while adapting to new technological and workforce demands.
VidTech is at the forefront of supporting industries like life sciences with cutting-edge solutions, including tailored real estate insights and innovative property visualization tools. Explore how we can help you navigate the evolving landscape—contact VidTech today!
