FDA and other HHS agencies are rapidly adopting AI, with Google Gemini-powered Elsa 4.0 and HALO platform fully operational
Background and market growth of the U.S. Department of Health and Human Services (HHS)'s full-scale adoption of artificial intelligence (AI)
According to the 2025 fiscal year report by the Bipartisan Policy Center (BPC), the adoption of artificial intelligence (AI) by major agencies under the U.S. Department of Health and Human Services (HHS) is increasing dramatically. In 2025, the global healthcare AI market is estimated at approximately $39.34 billion, and the government is taking the lead in digital transformation. In particular, the number of AI use cases at the Centers for Disease Control and Prevention (CDC) increased by 87% year-on-year, while the Centers for Medicare & Medicaid Services (CMS) and the National Institutes of Health (NIH) recorded sharp increases of 78% and 51%, respectively. This is more than just a trend; it is in line with the Trump administration's policy of unifying national AI guidelines and is intended to strategically improve the administrative processing and review speed of the federal government.
Elsa 4.0 and the HALO platform, driving regulatory innovation at the Food and Drug Administration (FDA)
The agency that stands out the most in this digital transformation is the Food and Drug Administration (FDA), with a 148% increase in use cases. The FDA has introduced Elsa 4.0, an internally developed generative AI chatbot developed in collaboration with Deloitte, to maximize the efficiency of clinical trial protocol reviews and the summarization of vast amounts of data. In particular, Elsa 4.0 quickly transitioned from Anthropic's Claude engine to Google's Gemini, meeting the Federal Risk and Authorization Management Program (FedRAMP) High standards. Combined with the HALO (Harmonized AI & Lifecycle Operations for Data) data platform, which integrates data from more than 40 previously disparate systems, reviewers can now query and analyze data directly within Elsa without having to upload documents individually.
Digital transformation of the healthcare administrative network and an AI-first strategy
The CDC and CMS are also fully embracing AI across their systems, transforming the paradigm of healthcare administrative services. The CDC has deployed ChatCDC, a dedicated generative AI chatbot, to all employees to improve work productivity, and HHS headquarters launched OpenAI's ChatGPT Enterprise in September 2025. The CMS has declared itself an "AI-first" agency through its 2026-2031 strategic framework and has outlined a plan to maximize administrative efficiency through large-scale employee training. It is worth noting that a significant portion of the projects at these agencies are currently in the pre-deployment phase (CMS 40%, NIH 35%, CDC 29%), which means that the improvement in work productivity will accelerate further as the systems are further developed.
Impact of the Trump administration's deregulation and unified national AI policy
The rapid increase in AI adoption by federal agencies is directly linked to the Trump administration's policy of emphasizing deregulation and innovation. In particular, in January 2025, the Office of Management and Budget (OMB) was tasked with developing AI deployment guidelines for federal agencies through an executive order, and in March 2026, a unified national AI policy framework was announced to curb the fragmented regulations of individual states and provide federal standards. In addition, on June 2, 2026, the "Promoting Advanced Artificial Intelligence Innovation and Security" executive order was enacted to strengthen the cybersecurity of national systems. This strengthens security safeguards while providing high transparency and flexibility in the regulatory compliance process for AI infrastructure providers and the bio-ecosystem.
Impact on the global biotech investment market and the competition for big tech contracts
The accelerated AI adoption by the FDA, a regulatory agency, will be a key trigger for stimulating investment sentiment in the biotech market, including venture capital (VC). As drug reviewers quickly verify preclinical and Phase 1/2/3 clinical data in an AI-integrated, unified data environment, approval timelines will be shortened, and the net present value (NPV) of new drugs will increase accordingly. In addition, as regulatory submission costs and process risks decrease, it will have a positive impact on the valuation of bio companies with new drug development platforms. In the medium to long term, the competition for federal government cloud infrastructure contracts among global big tech companies such as Microsoft Corporation (MSFT), Alphabet Inc. (GOOGL), and Amazon.com, Inc. (AMZN), which are vying to monopolize healthcare data, is expected to intensify.
In 2025, the FDA's AI use cases increased by 148% in the $39.34 billion global healthcare AI market, which directly addresses the bottleneck in the new drug review process. In the short term, the combination of Elsa 4.0 and the HALO platform, equipped with advanced engines such as Google (Gemini) and OpenAI (ChatGPT), will significantly shorten the review cycle for preclinical and Phase 1/2/3 clinical data, accelerating the approval timeline for new drug candidates. In the medium to long term, the federal government's unified AI policy framework at the state level will expand the market share of private AI solution providers in the federal market and reduce regulatory risks for companies. This will further stimulate the competition for government-dedicated cloud and generative AI infrastructure contracts among Alphabet Inc. (GOOGL), Microsoft Corporation (MSFT), and Amazon.com, Inc. (AMZN). As a result, it is interpreted as a macro catalyst that will lead to an upward revision of the pipeline value and net present value (NPV) of AI-based new drug development platform companies.