As AI proliferates, is healthcare actually leading the race for once?

It’s hard to believe, but healthcare might actually not be last on the list of sectors adopting a new type of technology. It’s an admittedly unfamiliar notion after a decade-and-a-half of Sisyphean struggles to bring in digital tools that can alter the inertia of the $4.9 trillion industry. But with artificial intelligence, the healthcare community might be making some real, tangible progress against the wide range of operational roadblocks that have kept it stuck in status. 

According to a series of new industry reports, healthcare could be getting this AI thing right the first time around, even with an ongoing scarcity of resources and a legacy of resistance against adopting new workflows.  

Clinician demand for help with overwhelming workflow burdens – paired with the fact that providers are staring down the barrel of massively disruptive and destabilizing financial and policy changes over the next several years – could be helping to foster a rush of adoption for organizations that believe AI might be their main hope in the fight for survival. 

Sprinting past the competition in artificial intelligence adoption

New data from investment firm Menlo Ventures illustrates just how whole-heartedly healthcare is embracing AI – and just how quickly they’re doing so. 

The 2025 State of AI in Healthcare report shows that healthcare entities, including providers and payers, are deploying AI at 2.2 times the rate of other economic sectors. 

Close to a quarter (22%) of healthcare entities have adopted domain-specific tools in the past few years, a seven-fold increase over 2024 and a ten-fold increase over 2023 levels. 

Provider organizations, in particular, are moving as fast as possible to bring in a huge number of new AI-enabled capabilities.  The report notes that health systems have shortened their average buying cycles from 8 months for traditional IT purchases to a mere six-and-a-half months for AI tools. Outpatient providers are even speedier, dropping from 6 months to 4.7 months to complete the decision-making process.  

The feeding frenzy has produced more industry-specific “unicorn” companies than any other economic vertical, and that’s including legal, financial services, and media. 

Ambient listening and documentation improvement tools support the surge

Many of these unicorns are focused on the nuts and bolts of healthcare operations: generating, analyzing, and processing the documentation that underpins trillions of dollars in reimbursements.  

At the moment, the vast majority of AI spend is on ambient scribes and coding/billing augmentation, representing more than $1 billion of investment combined in 2025 alone.    

Ambient technology has been particularly well-received by clinicians as a way to reduce cognitive burdens before, during, and after an appointment while generating documentation that is easier to code and faster to bill.   

A separate survey by Silicon Valley Bank (SVB) found that clinicians are now actively demanding access to these solutions in the clinic, with 80% of practicing physicians believing documentation improvement is a top AI use case in 2024. 

So it might not be any wonder that by mid-2024, more than 40% of medical groups told MGMA that they were using ambient technology to support their clinicians via real-time transcription, scribe and replay features, or clinical/SOAP note generation. 

Data from Bain & Company, produced in partnership with Klas Research, reinforces this trend. More than 60% of providers have an AI-driven documentation support tool (ambient listening or scribe solution) either in production or fully deployed. Just over 40% have additional clinical documentation improvement or payer compliance tools in the field, as well. 

With rumors of a bubble, however, should healthcare be holding its horses?

But hang on for a minute. Is this all too good to be true? Healthcare organizations that are pouring so many billions into the AI ecosystem so quickly might be contributing to the fears of financial analysts that market is inflating an AI bubble on the precipice of bursting. 

Valuations of VC-based AI companies have been trending steadily upward since 2018, with mega-rounds of fundraising comprising 38% of total investment into healthcare technology in 2025, SVB says. 

Yet a growing cavalcade of news articles are raising concerns, with market experts warning that overinvestment in the AI environment, especially at the mind-boggling scale that is occurring right now, could lead to catastrophic impacts for the economy once the bubble pops. This could spell disaster for a healthcare industry that’s already bracing for potentially unsustainable cuts to its economic engine from the One Big Beautiful Bill.  

For example, Menlo Ventures points out that the vast majority (85%) of organizations are choosing to work with venture-backed startups for their solutions – startups that are likely not yet profitable on their own – a burst bubble that suddenly results in a major dearth of available VC funds could leave organizations with a whole lot of defunct tools on their hands and nothing to be done about it.  

The uncertainty shouldn’t necessarily stop organizations from pursuing AI-powered technologies that could make a difference for their clinicians and patients. But it should raise at least a bright yellow flag that inspires close scrutiny of the financial sustainability of their prospective partners in the AI space. 

It’s encouraging and inspiring to see healthcare on the leading edge of technology adoption for once. But the growing instability of the economic climate also reinforces the absolutely essential nature of carefully planned, strategic AI investment that is guided by strong governance and thoroughly informed by champions within the workforce.  

Jennifer Bresnick is a journalist and freelance content creator with a decade of experience in the health IT industry.  Her work has focused on leveraging innovative technology tools to create value, improve health equity, and achieve the promises of the learning health system.  She can be reached at [email protected].