If you’ve never played a make believe game with one of your in-laws, I highly recommend it.
On a Zoom call a few months ago, Ambience Healthcare did a demo for me and my father-in-law, a pediatrician. Together, he and I played parent and child at a doctor’s appointment—I pretended to be a stubborn teenager, he was the concerned dad, and an Ambience employee played the doctor. We mumbled, I whined about middle school and stomachaches, and at one point someone interrupted the visit to ask about lunch orders.
Then we all watched as Ambience’s medical transcription technology created a detailed summary of the visit. I asked my father-in-law, who is a pediatrician, what he thought of the result. His response: “Wait a minute, can I actually use this in my practice? I want to.”
Ambience, co-founded in 2020 by Mike Ng and Nikhil Buduma, is an AI-powered platform focused on improving documentation processes in medicine. And in this case, my father-in-law and I took a look at the company’s AI medical writing technology. A medical scribe has, for the uninitiated, one of the most important and least desired jobs in medicine – taking notes during patient visits in real time. In a world full of AI solutions looking for a problem, Ambience focuses on a pain point that pretty much every doctor will attest to (who likes filling out paperwork?).
Ambience’s technology has now been deployed at John Muir Health, a leading healthcare system in Northern California that covers 16 specialties. Assets can exclusively report. John Muir is large, with a network of over 1,000 physicians across two facilities. Dr. Priti Patel, chief medical information officer for John Muir Health, says her physicians are not just adopting the technology, they’re clinging to it. In metrics provided by John Muir, 85% of the system’s physicians say they would prefer to continue using an AI scribe.
“We’ve done all kinds of surveys and basically everyone is saying they don’t want this to go away,” Patel said. “I think we’re going to get to the point where this is the standard of care. There’s really no going back from that point. Imagine getting rid of the smartphone. That’s not going to happen.”
Ambience is part of a growing wave of venture-backed AI startups focused on medicine and transcription that are gaining traction. Ambience has raised $100 million so far from backers including Kleiner Perkins, Andreessen Horowitz and the OpenAI Startup Fund. Ambience’s competitors are also well-funded, notably Abridge, which was founded two years earlier and whose backers include Union Square Ventures and Bessemer Venture Partners. (Abridge also just launched at Kaiser Permanente.) Others in the space include Cathay Innovation-backed Nabla and Venrock, and First Round-backed Suki. It’s almost as if everyone in Silicon Valley has a horse in this race.
Still, I’d be lying if I said I wasn’t cautious about the technology itself – it strikes me as being great when it works really well, but when it stops working or misfires, the consequences can be disastrous. Ng says the goal of Ambience is to integrate into clinicians’ workflows without reworking existing systems, while implementing “the right safeguards and the right kind of governance.”
Ambience’s origins can be traced back to MIT, where Ng and Buduma first met. They later became friends with the early teams at Google Brain and OpenAI, where they were exposed to the rapidly evolving field of machine learning. Their early mentors included Jeff Dean of Google and Sam Altman of OpenAI.
“We had really interesting insights into a lot of early work on transformers that ultimately enable a lot of the technologies we see today,” Buduma said. “From 2017 to 2020, we saw this inflection point of experiments that worked and, just as importantly, didn’t work… We also realized that these general models are likely to get much better at general reasoning tasks like math, software development and text generation. But there’s a big gap between the best performing general models and the best performing clinical models.”
I spoke to Dr. Richard Long, a urologist at John Muir, about his experience with Ambience. He said one of the invisible benefits of the technology is that it can mitigate the risk of physician burnout—a well-documented but persistent problem.
“I got to a point where I wasn’t sure if I wanted to continue doing this,” Long said. “I love medicine, but I was trying to find ways to just spend my life in the operating room and practice medicine without having to do all the documentation… But this helps tremendously. The burnout is real, it’s personal.”
Still, it’s not unreasonable to wonder if this technology will eventually replace doctors entirely. I raised this with Dr. Tanya Threewitt, vice president of ambulatory health at John Muir, and she’s optimistic that the technology will be more of a complement than a replacement. “I don’t think it will ever replace what we know,” she said. “It’s definitely not going to replace the human touch, and I think you can’t overstate how important that is.”
Another big question is whether the market is big enough to sustain so many competing venture-funded AI products for doctors. Time will tell, but I’m not convinced it’s a winner-takes-all situation here (there are plenty of hospitals out there, after all). And that seems to be a good story, which is quite common in healthcare, which is known for its spectacular rigidity and regulation.
And Ng says he’s getting encouraging feedback from a key audience: “Being in the Bay Area, one of the added benefits we have is that every now and then an investor or friend will say, ‘Oh my God, my doctor uses Ambience.'”
See you in the morning,
Allie Garfinkle
Twitter: @agarfinks
E-mail: [email protected]
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A special digital edition of Assets
The best stories of July and August from Assetsincluding a radical restructuring at a private equity giant, a crisis at the First Family of Poultry, and more.
— KKR’s co-CEOs are committed to reaching $1 trillion in assets by 2030. To achieve this, they’re willing to take big risks and leave the old ways of doing things at the private equity firm behind. Read more.
— John Randal Tyson was supposed to run his family’s $21 billion chicken empire. His erratic behavior could change that. Read more.
— Jeff Bezos’ famous management rules are slowly falling apart at Amazon. Read more.
— A 25-year-old crypto ace went from intern to president of Jump Trading’s crypto division. Then he became a scapegoat. Read more.
— An inside look at a secretive investment firm that counts some of America’s wealthiest clients and has some of Silicon Valley’s most powerful figures as advisors. Read more.
— Can you stop taking Ozempic and still stay slim? These startups claim it’s possible – but doctors say the claim is unproven. Read more.
Nina Ajemian curated the “Offers” section of today’s newsletter.
VENTURE OFFERS
– Butlera Burlingame, California-based developer of AI and thermal technology sensors, has raised $38 million in its second round of funding. foundry led the round and was accompanied by Pacific Alliance Companies, GS Futures, DNX Venturesand other.
– Sun exchangea London, England-based developer of zero-emission transport refrigeration, has raised £17.3 million ($22.8 million) in funding. BGF led the round and was accompanied by Shell Ventures, Moving energyand existing investors Barclays And Clean Growth Fund.
– Viggle AIa Toronto, Canada-based generative AI character animation platform, has raised $19 million in Series A funding round. Andreessen-Horowitz led the round and was accompanied by Two small fish.
– pgEdgea distributed database system based in Alexandria, Virginia, has raised $10 million in funding. Rally activities led the round and was supported by existing investors Sands Capital Ventures And Grotech Ventures.
– SUKHIBAa Nairobi, Kenya-based conversational commerce and CRM platform for WhatsApp, has raised $1.55 million in a seed round. EQ2 Ventures led the round and was accompanied by Accion Venture Lab, Musha Ventures, Quona Capitalexisting investor CRE Venturesand other.
Private equity
– Mainsail Partner invested 74 million dollars in Rentvinea property management software platform based in Estero, Florida.
– Blue Wheel Mediaa portfolio company of Longshore Capital Partneracquired Day One Digitala Seattle, Washington-based e-commerce strategy agency for Amazon sellers. Financial terms were not disclosed.
FUNDS + FUNDS OF UMBRELLAS
– CenterOak Partners, a Dallas, Texas-based private equity firm has raised $1.1 billion for its third fund focused on corporate, industrial and consumer services.
– G squareda venture capital firm based in Chicago, Illinois, has raised $1.1 billion for its sixth fund focused on the technology sector.
– Magnetaran asset management firm based in Evanston, Illinois, has raised $235 million for its first fund focused on generative AI.
– red alpinea venture capital firm based in Zurich, Switzerland, has raised $200 million for its seventh fund focused on the software and science sectors.
PEOPLE
– PAI Partnera Paris-based private equity firm, commissioned Livia Carega as Managing Director. Previously, she worked at Tiger Global.
– YL Venturesa Mill Valley, California-based global cybersecurity venture capital firm, Andy Ellis as a partner.
