Babylon Health faces legal headache over AI claims

A British technology firm hailed as the future of healthcare by former Health Secretary Matt Hancock could face legal action after its collapse in the US.

Babylon Health, which has 100,000 NHS patients, is being sold off after losing nearly all of its value since founder Dr Ali Parsa floated it for £3 billion on the New York Stock Exchange in 2021.

Last month, Jersey-registered Babylon announced that London-based AlbaCore Capital would take over its assets without shareholders’ approval and that it was also calling in administrators in the UK. 

Parsa, a former refugee, saw his net worth soar to £825 million after investors were attracted by his promise to revolutionise healthcare by using artificial intelligence (AI).

This included a controversial chatbot, which claimed to be able to diagnose illnesses, despite repeated criticism from senior health experts. Parsa also claimed that the company had designed software that ‘turns Alexa [Amazon’s virtual assistant] into a doctor’. But one unnamed investor is now understood to have assembled a UK legal team over claims surrounding Babylon’s technology.

David Watkins, an NHS consultant and arch-critic of Babylon, said: ‘The investor is considering legal action in relation to the company’s AI, and I have been asked to speak to their legal counsel.’

Last year, Babylon and the NHS agreed to terminate two long-term contracts due to ‘challenging global and macroeconomic conditions’.

The company, however, insists it will continue to run its GP@Hand app contract in Hammersmith & Fulham, which lets patients make virtual appointments. Hancock previously said he wanted GP@Hand to go nationwide.

Filings with US authorities reveal that Parsa received £5.6 million in pay and perks for 2022. In March, he claimed Babylon’s 2022 accounts showed ‘continuous improvement’ and predicted profitability by 2024 despite losses of £409 million in the three years up to and including 2022. Babylon has been repeatedly approached for comment.