When an academic medical center signs a contract with a cloud provider or AI developer today, the agreement increasingly looks less like a procurement and more like a joint venture. In a trend chronicled by Modern Healthcare reporters David Entwistle and Alpa Vyas, leading teaching hospitals are transforming vendors into strategic partners — embedding engineers in clinical units, co-funding trials and negotiating shared ownership of algorithms.

The shift is driven by the rapid rise of generative artificial intelligence, the need to modernize legacy electronic health records, and pressure to turn academic research into products that improve outcomes. “If we can design models alongside the people who will use them, adoption and safety improve,” said a chief innovation officer at a major academic medical center who requested anonymity to discuss sensitive negotiations. “We’ve moved from a world where a vendor drops off code and leaves, to one where they sit in our command center.”

Practical arrangements vary. Some systems are signing multi-year cloud and platform agreements that give vendors continuous access to deidentified clinical data in exchange for technical support and co-development rights. Others are forming separate subsidiaries or joint ventures to commercialize algorithms, with revenue- sharing clauses that funnel royalties back to the health system and its researchers. A growing number of contracts also include provisions for clinical validation studies, placing clinical and scientific milestones alongside software performance metrics.

Proponents say the model speeds innovation. By aligning incentives, hospitals can iterate tools more quickly, integrate clinician feedback and run prospective evaluations in controlled settings. “Co-development compresses the discovery cycle,” said a technology executive involved in multiple health-care partnerships. “It also distributes the cost and operational burden of moving models from lab to bedside.”

But the new arrangements prompt important ethical and regulatory questions. Patient advocates and bioethicists warn that data governance must keep pace with commercial collaborations. Who controls the datasets used to train models? How are patients informed about downstream commercial uses of their deidentified data? And when a hospital shares in revenue from an AI product, how are conflicts of interest managed in clinical decision-making?

Legal experts point to another complication: intellectual property. Historically, universities and public hospitals have sought to retain rights to discoveries born of federally funded research. Co-development deals that grant broad commercial rights to vendors risk undermining that posture, or alternatively, may require hospitals to accept smaller upfront payments in exchange for future royalties.

Regulators are paying attention. Federal privacy rules under HIPAA continue to apply to many data transfers, but novel data arrangements — including the use of synthetic datasets or external model training — sit in a gray zone that could invite scrutiny. Antitrust regulators and watchdog groups have also signaled interest in whether deep, exclusive partnerships between dominant health systems and major tech firms could entrench market power.

Leaders at academic medical centers say they are trying to balance innovation with safeguards. Contract negotiators increasingly insist on clauses that preserve publication rights, require external validation, and set firewalls between commercial teams and clinical committees. Some institutions are experimenting with data trusts and independent ethics boards to oversee collaborations.

Entwistle and Vyas conclude that the move from vendor to partner is redefining how new clinical technologies are created and deployed. If done with rigorous governance and public transparency, the approach could accelerate the translation of research into care. If not, critics warn, hospitals risk outsourcing stewardship of the very data and expertise that define academic medicine. The next phase of health-care innovation, it seems, will be negotiated as much in boardrooms as in laboratories.