A Market Underfunded for Its Own Scale: Clinical AI, Capital Concentration, and the Longevity Economy

THE HORIZONS X Scarlett Chen

Global healthcare is a $12 trillion market carrying a 34-million worker shortage, yet healthtech captured just 5% of the $712 billion in global venture capital deployed in the first half of 2026. That gap, a trillion-dollar industry still treated as a rounding error by the venture industry, is the starting point for everything else here.

We at Verge HealthTech Fund have always talked about how healthcare should transform from “sick-care” to “health + care.” We have also observed that consumers want to take control of their own health more and more these days. The recent technology advances are fuelling innovations that are making these trends possible.

Capital Concentrates at Every Layer

Capital allocation in 2026 tells a rather uncomfortable story about where money goes.

Global venture capital (VC) funding hit $712 billion in H1 2026, poised to become the highest record year in the history of VC, but the ten largest deals alone took two third of total dollars, versus just 6% in 2022. Abundance is concentrating, not broadening. In terms of valuations, AI, space, robotics are getting huge premiums, while agtech, edtech, foodtech are suffering from valuation discounts. It’s almost as of the further you are from earth or everyday living, the more you are appreciated by investors who are thirty for novel businesses. Healthtech again, sits in this uncomfortable space of being counted as somewhat conventional businesses.

Within healthtech specifically, the two fastest-growing verticals over the past twelve months, wellness & longevity (+171% in deal value) and infrastructure operations (+83.5%), are notably the least clinical segments in the sector. Capital is still chasing the consumer-facing and operational edges of the market before it fully commits to clinical AI's core.

Wellness & Longevity: The Fastest-Growing Vertical This Year

If clinical AI is still finding its footing, wellness and longevity has already found its market.

The vertical grew venture deal value 171% over the trailing twelve months versus the prior year, the fastest of any of the healthtech segments we track, $2.0 billion across 131 deals. Crucially, neither of the category's standard-bearers sells to a hospital. Oura and Whoop, valued at $11.0 billion and $10.1 billion respectively on their most recent private rounds, have built the wearables layer of the longevity stack directly with consumers. Oura has unfortunately delayed its much-anticipated IPO targeting around $15B valuation. The Continuous Glucose Monitoring (CGM) incumbents, Abbott and Dexcom, have respectively invested in Whoop and Oura as strategic investors, as they focus on their direct-to-consumer play (Stelo and Lingo) and partnerships that can grow their businesses.

The deeper structural shift is who is paying.

The global wellness economy was $6.8 trillion in 2024, growing nearly 8% a year toward a forecast $9.8 trillion by 2029, and a meaningful share of that is now a parallel, out-of-pocket health system running alongside insurance. Function Health built a $2.5 billion valuation on a $365-a-year subscription, and is functioning 100% outside of traditional health insurance beside being FSA eligible. Eli Lilly and Novo Nordisk have both started calling their GLP-1 franchises "longevity medicines" rather than diabetes or obesity drugs, a repositioning that has coincided with US adoption rising from 3% of population in 2024 to 11% in 2026. US concierge medicine and longevity clinics together represent roughly $14 billion in 2026, scaling toward $20 billion and beyond by the mid-2030s. Even our portfolio company ViewMind, which is deeply clinical and pursuing a diagnostic claim, has achieved early commercial traction because longevity doctors love using ViewMind to track their patients’ cognition with precision.

Patients are not waiting for their health systems to build this infrastructure — 21% of consumers who turned to AI for health advice did so specifically because a provider had dismissed them. For longevity-focused capital, that is the real signal: this category is being built and paid for directly by the end consumer, well ahead of institutional healthcare's adoption curve.

From Scribing to Screening: GenAI's Clinical Pivot

The first wave of healthcare AI capital went exactly where you'd expect: administration.

Provider operations have absorbed $11.6 billion in healthcare AI capital — more than clinical trial enablement and alternative care combined — and hospital buyers still rank operational efficiency and workflow automation above clinical decision support in their own stated priorities. Ambient scribing, coding and prior-authorization drafting were the easy wins, and EHR incumbents like Epic have already folded native AI charting into their core platforms, turning what looked like a product category into a checkbox. The companies that offer a smarter chatbot wrapper will not win a long game.

The Adoption Gap Is Closing From an Unexpected Direction

On paper, physician AI adoption in China (79%) and the US (81%) looks nearly identical. The real divergence is in intensity: 75% of Chinese physicians use AI every single day, versus 35% in the US — more than double, on equivalent access, and consistent across tier-one and tier-four cities alike.

This is not an access story. It is a trust-and-habituation story, the Chinese have been on the forefront of using digital platforms like WeChat. Whatever reservation is holding back American clinicians — liability, workflow friction, institutional caution — China's physicians have largely worked through it, and daily habituation is a leading indicator for where defensible clinical workflows get built first.

The more consequential shift, for anyone building healthcare infrastructure outside the wealthiest health systems, is on the model side. The capability gap between the top US frontier model and the top Chinese open-weight model has collapsed from 17.5–31.6 points in May 2023 to just 2.7 points in March 2026 — at roughly a tenth of the token price. Open-weight models now account for roughly 60% of production AI token volume industry-wide. Anthropic’s Haiku 5.5 that just got introduced is its newest small model that is 75% cheaper to use on average, and this is Anthropic’s latest answer to free open models ahead of its $2 trillion dollar IPO. We shall see whether this is a sufficient response to how the US frontier models will stay competitive.

Given the advances in open-weight models, a health system in Southeast Asia or Sub-Saharan Africa no longer needs to rent frontier-lab compute at frontier-lab prices to deploy near-frontier diagnostic intelligence. Against a global shortfall of 34 million healthcare workers, cheap, good-enough, open-weight models closing the gap to frontier capability may just do more for global health equity over the next five years than any single clinical breakthrough.

Where This Leaves Us

A market still starved of capital relative to its size is now getting a genuine clinical catalyst, as physician trust catches up to model capability and open-weight economics de-risk the infrastructure needed to deploy it globally. But the capital that does arrive is being underwritten against a shorter list of questions than it was eighteen months ago: what proprietary data does this generate, what evidence takes years rather than months to reproduce, how deeply is it embedded in a real workflow, and what would a frontier model's next release take away from it. The longevity and healthtech platforms that can answer all four will be the ones compounding through the next cycle.

Our Collaborator

Scarlett Chen is Managing Partner at Verge HealthTech Fund, an early-stage venture capital fund supporting founders who transform global healthcare access, affordability, and outcomes. Under a geo-agnostic mandate, Verge has backed 41 healthtech companies across six continents, impacting more than 38 million lives.

Ms. Chen is a seasoned investor dedicated to driving technological innovation alongside outsized financial returns. Her extensive leadership background includes serving as Managing Director of Strategic Investments at Prudential Corporation Asia and Global Head of Financial Institutions Group at Anbang Capital. Earlier in her career, she spent over a decade in investment banking with Merrill Lynch in the US and Barclays in Hong Kong, executing more than US$30 billion in global capital markets and advisory transactions. Extending Horizons. Elevating Life.