Artificial intelligence (AI) has attracted billions of dollars in global investment as pharmaceutical companies compete to accelerate new drug development, yet the AI drug discovery sector is still defining its viable commercial models. In China’s vibrant biotech ecosystem, two industry heavyweights with deep roots in the country are now offering different answers. Recent financial results from XtalPi Holdings and InSilico Medicine Cayman TopCo show the sector diverging into two distinct business models: one built on selling AI-powered research services, the other on using algorithms to create entirely new biotech pipelines. The difference is already visible in their financial performance, as the two companies navigate the capital markets, with XtalPi being among the first specialized tech firms to list under Hong Kong’s new Chapter 18C rules and InSilico delivering Hong Kong’s largest bio-tech listing of 2025 by funds raised. XtalPi reported revenue of CNY802.6 million in 2025, representing a 201.2% year-on-year increase, and posted its first full-year net profit of CNY134.6 million, with adjusted net profit reaching CNY258.2 million. The figure makes it the first profitable AI for Science company listed on the Hong Kong H-share market.
InSilico, by contrast, generated USD56.2 million in revenue, but reported an adjusted net loss of USD43.8 million, which the company said “was primarily attributable to the decline in revenue and partially offset by the decrease in research and development expenses”. The contrast highlights a broader debate across the global artificial intelligence drug discovery sector: whether AI should be commercialized primarily as a research platform or as the foundation for building biotech companies. XtalPi has positioned itself as a technology platform for pharmaceutical companies. Its core business combines AI-driven molecular simulation with automated laboratories and robotics systems designed to accelerate early-stage drug discovery. Rather than relying on developing drugs itself, the company primarily generates revenue from research services and experimental infrastructure provided to global pharmaceutical groups, adopting an approach that resembles an AI-enhanced contract research organization.
Analysts at JPMorgan wrote in a recent report that XtalPi’s model essentially provides the infrastructure for AI-driven drug discovery. The company’s drug discovery solutions segment generated CNY537.9 million in revenue last year, up more than fourfold year-on-year, while AI4S intelligent solutions contributed another CNY264.7 million, it said. Zhang Peiyu, Chief Scientific Officer (CSO) at XtalPi, stated that the company’s AI+robotics platform has raised the success rate of chemical synthesis experiments from 20% to 30% to around 90% and would reduce drug discovery timelines to about one or two years rather than the four years it often takes now.
InSilico Medicine has chosen a more ambitious and riskier route. The company uses its Pharma.AI platform to design drug candidates and advance them through clinical development, effectively operating as an AI-driven biotechnology company. That approach requires far larger research spending. InSilico invested about USD81.4 million in R&D in 2025, equivalent to roughly 145% of its annual revenue. The company has produced 28 pre-clinical candidate compounds since 2021, more than 10 of which have received investigational new drug approvals and entered the clinical stage. The strategy recently delivered a high-profile validation. InSilico signed a collaboration agreement with Eli Lilly and Company, granting the U.S. drugmaker exclusive global rights to develop, manufacture and commercialize potentially best-in-class novel oral therapeutics currently in pre-clinical development for certain indications, while the two sides will also collaborate on multiple R&D programs focused on targets selected by Lilly, the China Daily reports.
