Deep inside Alphabet, the parent company of Google, a secretive lab is working on a promise so audacious it sounds like science fiction: to “solve all diseases.” The company, Isomorphic Labs, is now preparing to start its first human clinical trials for cancer drugs designed entirely by artificial intelligence.

In a recent interview with Fortune, Colin Murdoch, President of Isomorphic Labs and Chief Business Officer of Google DeepMind, confirmed the company is on the verge of this monumental step. For anyone who has watched a loved one battle a devastating illness, the hope this offers is immense. But for a public increasingly wary of AI’s power, it raises a chilling question: can we really trust a “black box” algorithm with our lives?

Isomorphic Labs was born from DeepMind’s celebrated AlphaFold breakthrough, the AI system that stunned scientists by predicting the complex 3D shapes of proteins. To understand why this is a big deal, you need to know how drugs are traditionally made. For decades, it’s been a slow, brutal process of trial and error. Scientists spend an average of 10 to 15 years and over a billion dollars to bring a single new drug to market, with most candidates failing along the way.

Isomorphic Labs uses its AI, AlphaFold 3, to radically accelerate this. The AI can predict the complex 3D structures of proteins in the human body with stunning accuracy, allowing scientists to digitally design new drug molecules that are perfectly shaped to fight a specific disease, all before ever entering a physical lab

The company has already signed multi-billion dollar deals with pharmaceutical giants Novartis and Eli Lilly, and just raised $600 million in new funding to move its own drug candidates—starting with oncology—into human trials. The promise is a medical utopia. “This funding will further turbocharge the development of our next-generation AI drug design engine, help us advance our own programs into clinical development, and is a significant step forward towards our mission of one day solving all disease with the help of AI,” CEO Sir Demi Hassabis, who won the 2024 Nobel Laureate in Chemistry for his pioneering work on AlphaFold 2, said back in March.

But when Big Tech starts designing medicine, who owns your cure? This is where deep-seated fears about AI’s role in our lives come into focus. The biggest concern is the “black box” problem: we know the AI gives an answer, but we don’t always know how. This raises critical questions:

• Will Alphabet own the next cancer drug like it owns your search results?
• Will these AI-designed treatments be affordable, or will they be trapped behind sky-high patents accessible only to the wealthy?
• Will human trial standards keep up with the sheer speed of machine-generated breakthroughs?
• And who is liable if an AI-designed drug goes wrong? The company that owns the AI? The programmers? The AI itself?

When contacted by Gizmodo, a spokesperson for Isomorphic Labs said the company “don’t have anything more to share.”

AI could revolutionize medicine. But if left unchecked, it could also replicate the worst parts of the tech industry: opacity, monopoly, and profit over access. Isomorphic Labs is pushing humanity toward a monumental turning point. If they succeed, they could alleviate more suffering than any other invention in history.

But to do so, they first have to convince a skeptical public that the promise is worth the unprecedented risk.

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We have already seen that Datadog is scratching the surface of a massive end-market opportunity in the cloud observability market. The advent of AI is likely to help it corner a bigger portion of the addressable market on offer by opening up a cross-selling opportunity. Datadog had 30,500 customers at the end of the previous quarter, and 4,000 of them have been using one or more of its AI services.

Importantly, Datadog management says that this number doubled on a year-over-year basis in the previous quarter, and the good part is that this trend is likely to continue. After all, customers are flocking toward Datadog to improve the performance of their LLMs with its observability solutions. The company points out that “the number of companies using LLM Observability has more than doubled in the past 6 months.”

That’s the reason why Datadog is now pushing the envelope on the product development front by bringing new AI-focused solutions to customers. Its Bits AI platform helps customers investigate incidents, fix code, and review security alerts autonomously. All this should eventually allow Datadog to accelerate its growth rate in the future as the adoption of AI applications in the cloud increases.

For instance, the size of the LLM market is expected to jump by more than 6x by 2030, which should lead to an increase in the demand for Datadog’s offerings. Not surprisingly, analysts are forecasting an acceleration in Datadog’s growth going forward.

This improvement in the company’s top-line growth is expected to filter down to the bottom line as well, as shown in the chart below.

However, don’t be surprised to see Datadog’s earnings grow at a faster pace than Wall Street’s expectations as a large chunk of its existing customer base is yet to adopt its AI solutions. This huge cross-selling opportunity should enable the company to win a bigger share of existing customers’ wallets and improve its margin profile.

Datadog seems to be in a position to justify its expensive valuation by stepping on the gas. That’s why it could entice growth-oriented investors, even after the impressive gains that it has clocked in recent months.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.

This Artificial Intelligence (AI) Stock Is Surging After Joining the S&P 500. Can It Continue to Skyrocket? was originally published by The Motley Fool