It's hard to see a presentation or read a press release by a major pharmaceutical company these days without hearing about how they're planning to use artificial intelligence (AI) to supercharge their drug development efforts -- and AstraZeneca's (AZN 0.19%) materials are no different.

But will using the rapidly advancing technology drive its shares to new heights or merely enable it to keep up with its competitors? Let's probe this issue by looking at the collaboration and acquisition activity that the company is pursuing.

Dealmaking is heating up

It's no surprise that drugmakers are interested in using AI to accelerate the pace of drug development. Under normal conditions, it can take biopharmas a long time to identify promising targets for therapies and leads for molecules that can interact with those targets in a controllable and medicinal fashion in the context of the human body.

Of the very small proportion of promising candidates that are found to be suitable for testing in clinical trials, only around 21% end up being proven safe and effective enough to actually get regulatory approval.

So, any technology that can increase the success rate or reduce the total amount of time spent has the potential to drive costs down significantly. And there's a solid chance that AI platforms for drug discovery and development could be exactly what's needed. But, as we're still very much in the early days of using AI for that purpose, it makes sense for the interested parties to make a lot of different bets, which is what AstraZeneca is doing.

On Dec. 4, the company announced that it was teaming up with Absci, an AI drug discovery biotech, to develop an antibody intended for use in treating cancer. The deal is worth up to $247 million in milestone payments, and it could yield a valuable pharmaceutical asset, or perhaps several. If the collaboration is successful, it'll likely be the first of many between the two businesses.

While this marks a significant acceleration of AstraZeneca's efforts, the deal with Absci isn't the pharma's first attempt at dabbling with AI for research and development (R&D) purposes. In September, it committed to paying up to $840 million in potential milestone payments to Verge Genomics, a private biotech, as part of its bid to use AI to discover targets for treating neurodegenerative diseases.

AstraZeneca also signed an AI-centered drug discovery pact with Illumina in October of last year, and in 2021, it gained access to Nvidia's newest supercomputer in the U.K. as part of a collaboration agreement. 2021 also saw it select two candidates generated by AI for testing and development in its pipeline, though it's unclear what the status of those programs is currently.

And since before 2020, it's been working with Schrodinger, another biotech dedicated to using advanced computational technologies for drug discovery, to optimize its modeling of biologic medicines like antibodies.

Is AI enough to make AstraZeneca a buy?

It's obvious that AstraZeneca's management is making a major strategic and multi-year push to revolutionize the way it discovers leads for new medicines. It's too early to determine what the results of its efforts so far will be. The main positive signs so far are that it's engaging in collaborations with a bevy of different AI providers rather than only one and that it doesn't seem afraid to commit to shelling out hundreds of millions of dollars to its partners if things go well.

Under a best-case scenario, within a few years from now, AstraZeneca will be able to spend a lot less on R&D than the $9.8 billion it spent in 2022 while maintaining its frenetic pace of advancing pre-clinical programs into clinical trials. Worst case, its investments in collaborations won't help it do much of anything. But that seems very unlikely in the long term as AI technologies for drug discovery are only going to get more advanced from here on out.

Still, the company's jumping on the AI bandwagon is not a sufficient reason to buy this stock on its own despite being a contributing factor to the bull thesis. Remember, many of its competitors in big pharma are looking for the same kinds of collaborations so that they can potentially realize the same efficiency benefits down the line. There's currently no evidence suggesting that AstraZeneca has any edge in using AI. If 2024 sees that change, and it easily could, it'll be worth reassessing whether the stock is worth buying on the basis of its AI capabilities at that point.