Is Nvidia Undermining the Intuitive Surgical Edge in Robotic Surgery?

Is Nvidia Undermining the Intuitive Surgical Edge in Robotic Surgery?

intuitive surgical (ISRG -0.29%) He is at the fore in robot-assisted surgery. The company gained approval for the Da Vinci Surgery System in 2000. With more than two decades of research and development and real-world use under its belt, competitors are fighting an uphill battle if they want to catch up with Intuitive’s technology.

This is not nvidia (NVDA -0.36%) Offers some help. The chip designer and AI specialist revealed during the GPU Technology Conference (GTC) this week that several startups are taking advantage of its platform to accelerate the development of their robotic surgery systems. Did Nvidia just deal a serious blow to Intuitive Surgical’s ability to stay on top?

Long list of competitors

Successful technology always attracts competitors, especially when it is profitable. Intuitive Surgical has built an empire that generated $6 billion in revenue over the 12 months ending in June. They also generate operating profit margins in the high 20% to low 30% range.

Indeed, Intuitive has attracted potential peers, some of which are privately owned and some of which are now publicly traded stocks. Many of these companies are trying to accelerate their development with Nvidia’s Orin IGX – the same platform that Nvidia created to help with other robotics technologies. At GTC 2022, Nvidia CEO Jensen Huang said that more than 70 medical device companies are using Orin IGX and the suite of software built on it to accelerate the development of their smart devices.

Included in the list of companies using Orin IGX mentioned by Huang are none other than Intuitive Surgical. Among the other famous peers mentioned Siemens HealthenersAnd the Striker. Small businesses like Surgical acinosus And the Olympus as it was named. Startups Activ Surgical, Proximie and Moon Surgical have also been announced as Nvidia clients.

As the list of ambitious contenders rages on, should intuitive contributors worry?

Lots of new business to go around

Robot-assisted surgeries still make up a small portion of the total procedures performed worldwide. Even in the United States, where Intuitive has steadily increased the number of procedures that can be performed with da Vinci and his newer ionic system, it is estimated that upwards of 80% of surgeries are still performed without robots. This percentage of non-robotic surgery is much higher in most other countries.

There is still a huge amount of white space for Intuitive and the others. Medical care is highly personalized, and the types of procedures that can be improved with AI-powered robots number in the hundreds.

Nvidia is also involved in other areas where AI software can improve healthcare, such as medical imaging, scanning, testing, diagnosis, drug discovery and treatment.

But back to robot-assisted surgery. Powered by Nvidia technology, Intuitive’s leadership can be maintained as it develops new uses for its existing systems and expands its offering into new areas of healthcare. Intuitive has the advantage of having a large number of its devices already in use. It had 7,135 da Vinci systems installed as of the end of June, as well as another 204 ion systems. These systems are very expensive, so a novice competitor will not be able to easily replace the da Vinci robot. Intuitive’s $8.18 billion cash, short-term investments, and no debt also give it an added edge when it comes to financing innovation.

The days of Intuitive’s rapid growth may be over, but this is still a steadily expanding business worth continuing to invest in. At this point, Nvidia’s advances in the medical field should help Intuitive Surgical as much as it helps other startups in robotic surgery, so I don’t think intuitive investors need to worry now.

Nicholas Rossolillo And his clients have positions at Intuitive Surgical and Nvidia. Motley Fool has and recommends positions at Intuitive Surgical and Nvidia. Motley Fool has a disclosure policy.

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