The healthcare focused chatbot startup OpenEvidence has closed on $75 million in funding from the venture capital firm Sequoia Capital Operations LLC in a round that values it at more than $1 billion.

The round, which came to light today via CNBC, brings OpenEvidence’s total amount raised to more than $100 million, with earlier funding coming exclusively from the founder and angel investors.

The founder’s name is Daniel Nadler, whose previous AI startup was a financial services-focused company called Kensho Technologies Inc. He ended up selling that firm to Standard & Poor’s Financial Services LLC for $700 million in 2018.

At OpenEvidence, Nadler has created a generative AI chatbot exclusively for doctors, with the aim of helping them make better decisions regarding their patient’s care. According to Nadler, the tool is already used by about a quarter of all doctors in the U.S.

Nadler told CNBC that the OpenEvidence chatbot feels similar to ChatGPT, but the responses are very different and much more accurate, thanks to its training exclusively on peer-reviewed medical journals such as The New England Journal of Medicine. Because its training data is of a substantially higher quality than what’s found on the public internet, OpenEvidence can avoid the dangers of “hallucinations,” where AI chatbots tend to make up responses to questions they don’t know how to respond to.

According to Nadler, OpenEvidence was built from the ground up for use by doctors. “The result is a black-and-white difference in terms of accuracy,” he claimed.

What’s especially appealing about OpenEvidence is that it’s free to use, with the startup making money solely from advertising. Moreover, the company has barely spent anything on marketing the product, instead relying on doctors to spread the word for it. Nadler explained that doctors work in very close quarters to one another, especially in hospital settings, so if one starts using it, his colleagues will be quick to find out about it.

Holger Mueller of Constellation Research Inc. said OpenEvidence provides yet more evidence that AI is impacting every aspect of our lives, and could even end up saving a few lives in the future, given its rapid rate of adoption among U.S. doctors.

“The challenge is not in building the technology, but rather how doctors will integrate it into their workflows,” the analyst said. “Patients want to talk to a human doctor, not a robot, and they may not even appreciate their doctor chatting to a chatbot while they’re sitting there with them in the examination room. But then again, patients want a confident diagnosis of what’s wrong, and if OpenEvidence can do that, it might just transform our patient/doctor relationships for the better.”

Sequoia partner Pat Grady told CNBC that OpenEvidence is much like a consumer internet company in the way it has spread like wildfire among doctors. “When they have a couple of good experiences with it, it sticks,” he said. “There aren’t a lot of products in healthcare that get adopted the way that a consumer internet company might.”

In many industries, there are fears that AI-powered automation might end up causing havoc by replacing human workers, but Nadler said its adoption in healthcare will be beneficial for the whole of humanity. He pointed out that many doctors are currently overworked, with the U.S. set to have a shortage of almost 100,000 physicians by the end of the decade.

Looking forward, OpenEvidence wants to use the Sequoia funding to improve the capabilities of its chatbot. It has already forged a strategic partnership with the New England Journal of Medicine, and wants to do the same with other established medical publications.

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