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Bubble risk for AI start-ups in the healthcare sector
A regulatory leap imposing high costs, the accrual of obligations and the difficulties of moving from pilot projects to commercialisation are the determining factors
by Monica D'Ascenzo
The healthcare technology sector is at a turning point, which could mark the bursting of a financial bubble. After a two-year period between 2024 and 2025 characterised by unprecedented capital inflows and booming valuations, the market would be heading for a structural correction in 2026.
The fear of a 'bursting' of the artificial intelligence bubble applied to healthcare is not attributable to a simple negative venture capital cycle, but appears to be the mathematical outcome of three converging forces, according to analysts at Nelson Advisors: 'an abrupt regulatory jump imposing typical hardware compliance costs on software start-ups, the maturation of financial obligations taken on at the height of the euphoria phase, and an operational 'reality bath' in healthcare systems, which is rapidly closing the window on the pilot project-based business model'.