UPDATE: At the 2025 HLTH conference in Las Vegas, the spotlight is on healthcare AI, with a surge of startups showcasing their innovations amid rising concerns about an impending AI bubble. Executives and investors are grappling with the reality that the AI landscape is becoming increasingly crowded and competitive.
AI technologies dominated the showroom floor, with companies like Jorie AI and Suki joining industry giants such as Samsung and Johnson & Johnson. Nearly every exhibitor touted AI features, but many attendees expressed fatigue over the repetitive messaging. “Everyone is framing themselves as the most generic, enterprise-wide agentic AI solution. It makes me want to vomit,” lamented a healthcare executive who wished to remain anonymous.
The atmosphere at HLTH is electric yet tense, reflecting a growing unease among healthcare executives about the sustainability of the AI investment boom. According to Rock Health, digital health startups attracted $6.4 billion in venture capital during the first half of 2025, with a staggering 62% of that funding directed toward AI ventures. However, the looming presence of established players like Epic, which plans to introduce its own AI solutions, casts a shadow over the future of emerging startups.
The event featured an expansive “AI Zone” and an “AI Theater,” where startups presented their pitches. Yet, the overwhelming focus on AI left some attendees yearning for substance. “I need to know what your company actually delivers, today, in the real world,” one executive stated, highlighting concerns that many startups lack practical applications for their technologies.
Despite the challenges, the conference showcased significant funding announcements. Notably, OpenEvidence secured $200 million at a $6 billion valuation, marking the largest raise disclosed at HLTH. Other promising AI startups, like Hyro, also made headlines with substantial funding rounds, underscoring the intense competition for capital in the sector.
The presence of OpenAI was particularly noteworthy this year, as the AI giant’s healthcare lead, Nate Gross, appeared alongside representatives from Microsoft, Google, and Nvidia on the main stage. Although Gross did not reveal specific plans for AI in healthcare, the mere participation of such a high-profile figure has intensified the scrutiny on smaller startups. “In my portfolio, people view OpenAI and Anthropic much more as a threat than people have ever viewed Amazon or Microsoft,” remarked Blake Wu, a partner at NEA.
The lavish setting of the Venetian Resort, where HLTH is held, added to the surreal nature of the conference. Attendees could engage in leisure activities like pickleball or pet therapy while navigating through a sea of AI presentations. Yet, the opulence belied the serious discussions about the AI-driven future of healthcare.
While some investors remain bullish on healthcare AI, concerns persist about the potential for overvaluation. Dr. Brenton Fargnoli of Lightspeed Venture Partners noted that many startups are growing faster than ever, but the looming competition from established giants raises questions about long-term viability. “Smart money is really thinking about startups that are worried about how to build responsibly,” said Milad Alucozai, cofounder of Pamir Ventures.
As the conference unfolds, the implications of these developments extend far beyond the showroom floor. The healthcare industry is at a crossroads, with the rapid expansion of AI technologies offering both unprecedented opportunities and significant risks. Attendees are left to ponder whether the current AI boom can sustain itself amidst growing competition and scrutiny.
Stay tuned for more updates on the evolving landscape of healthcare AI as HLTH 2025 continues.
