Amazon.com, Inc. (NASDAQ:AMZN) investment in health startup, Grail, early in the year came as a surprise given that e-commerce giant does not invest in life sciences. However, it is becoming clear why the cloud giant made the bold investment given what is at stake.
Big Data Opportunity
The market for storing human genetic data is poised to be worth $1 billion by 2018 presenting a unique opportunity that Amazon plans to take advantage of. Grail is reportedly working on a project that will use deep sequencing to detect the earliest signs of cancer in the blood. If successful, the program will require a huge amount of data processing and storage.
“We envision a global community that benefits from early-stage cancer detection where fewer individuals face the anguish of late-stage diagnosis and devastating outcomes,” said Jeff Huber, GRAIL’s Chief Executive Officer.
Grail is set to start handling huge data sets as it moves to sequence hundreds of thousands of people as part of the gene sequencing push. Amazon is the king when it comes to storage of data on the cloud something that would make it an appropriate partner for Grail’s operations.
The fact that biologists believe that the computing power needed to handle data in the healthcare sector will one day outweigh Twitter and YouTube means Amazon Web Services may have found its biggest client in the sector with the recent investment.
Grail’s Investments Factor
Grail already raised more than $900 million to fund the exceedingly expensive but highly lucrative quest, if successful. The company plans to use proceeds from the financing to continue product development and validation of its blood tests in early cancer detection.
Grail’s partnership with a diagnostics company in China could also have played a role in Amazon’s decision to invest in it. The cloud giant has already announced plans to open a new data center in Hong which would most likely be used by Grail and its Chinese partner.
Amazon stock was up by 1.24% in Wednesday’s trading session to end the day at $1,052 a share.
