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The year 2025 is witnessing a significant expansion of the Medical Info Systems industry, fueled by new federal policies and strong regulatory support. A major catalyst is Donald Trump's $500 billion Stargate AI project, aimed at accelerating AI infrastructure across sectors, including healthcare, with initial backing from SoftBank, OpenAI, Oracle and MGX. Per a Business Research Company report, the use of AI in the medical device market is expected to witness a CAGR of 29.9% during 2026-2029. This surge in digital healthcare demand presents key growth opportunities for companies like Veeva Systems VEEV, Hims & Hers Health HIMS and Butterfly Network BFLY.
Yet, this upbeat vision is being undercut by another cornerstone of Trump’s economic agenda, tariffs. The administration’s recent escalation of tariffs, ranging up to 145% on Chinese imports, 32% on Taiwanese goods and 46% on Vietnamese products, threatens to disrupt America’s “AI Ambitions.”
Industry Description
The Zacks Medical Info Systems industry comprises companies that develop and market healthcare information systems. These companies offer software and hardware solutions to healthcare providers with secure access to real-time clinical, administrative and financial data in a time-efficient manner. Focus on patient satisfaction, security of patient data and administrative cost control has increased the need for big data, cloud computing, blockchain and AI. Industry players like Omnicell and Allscripts are raking in millions from the sale of software and related hardware, professional services and IT outsourcing services, and recurring service contracts for software maintenance and transaction processing services.
3 Trends Shaping the Future of the Medical Information Industry
AI and Health: The medical sector is one of the major adopters of AI, which is currently being used to synthesize new compounds for drugs and create devices for more precise measurement and faster and more accurate diagnosis. Starting from generative AI to surgical robotics, one common application of these has been in diagnostic settings. Tools like electronic health records, electronic medical records, predictive analytics and real-time alerting have been gaining prominence. Trump 2.0’s new $500-billion Stargate project to fund infrastructure for artificial intelligence is set to boost this momentum by enhancing data management and interoperability. Going by a Pragma Market Research report, the global AI in healthcare market is expected to hit $95.65B by 2025. AI-powered tools are enhancing diagnostics, with innovations like Google’s DeepMind and AI-enabled wearables from Medtronic and Apple driving more accurate diagnostics and continuous patient monitoring.
Growing Demand for Remote Healthcare: Within the medical information systems space, remote patient monitoring segments continue to grow at a fast rate, courtesy of the rapid increase in usage of wearable devices and telehealth services. The major driver behind this growth is the increasing awareness about the usefulness of continuous patient monitoring devices. This has proved to be a game-changer in increasing the standard and efficiency of medical care. Further, health tech products are also accelerating the diagnosis process and automating hospital workflows through robotics, AI-driven chatbots and so on. Going by a Custom Market Insights report, the global smart healthcare products market was valued at $145.9 billion in 2023 and is expected to reach $485.71 billion by 2032, at a CAGR of 12.78%.
Tariff Threats on AI Ambition: The Trump administration’s sweeping tariffs, some reaching as high as 145% are overshadowing America’s AI ambitions, particularly in the healthcare sector. While the $500 billion Project Stargate is aimed at making the United States a global AI leader, rising costs on imported hardware like servers and power systems are making it more expensive to build and run the data centers needed for AI. Even though semiconductor chips are currently exempted, many other components critical to AI infrastructure are now subject to these tariffs. This has hit the medical device industry hard, where AI is being used for early disease detection, predictive care and personalized treatments. These tools rely on powerful computing and specialized equipment, which could now face delays or higher costs. Smaller hospitals and startups may struggle most, as the uncertain trade environment makes investment riskier.