Pain management startup Sword Health made an announcement on Tuesday regarding its new artificial intelligence solution named Phoenix. Through virtual physical therapy sessions, patients can now interact and seek guidance from Phoenix. Sword, established in 2015, provides digital tools to assist patients in pain management from the comfort of their homes while avoiding treatments such as opioids and surgery. Although the company has already incorporated AI into their products since their inception, CEO Virgílio Bento mentioned to CNBC that Phoenix offers users a more human-like experience. Phoenix simulates the work of a care specialist, aiming for patients to feel as if they have a physical therapist present within their homes. Patients can directly communicate with Phoenix about their feelings, and the new "specialist" responds by providing feedback and adapting the difficulty and duration of the session in real time. Sword patients utilize a tablet provided by the company to join sessions, allowing their movements to be tracked. Bento explained that Phoenix monitors their progress and afterwards, summarizes their performance data and sends it to one of Sword's human clinicians for review. While Sword's existing AI capabilities focus on movement analysis and simple feedback, Phoenix offers a more conversational approach. Additionally, Phoenix's ability to analyze patient data and generate recommendations helps the company's clinicians operate more efficiently. For the patient's next session, Phoenix proposes changes and sends a follow-up message pertaining to the completed session. However, it is crucial to note that any recommendations put forth by Phoenix must be reviewed and approved by a human clinician.

Sword's clinicians retain the authority to determine appropriate exercises, so no independent decisions are made by Phoenix. Bento emphasized in an interview, "This is health care, so you will always need that final approval. We have strong guardrails in terms of how we do things. " Patients can enroll in Sword if their employer or health plan supports it. According to the Tuesday release, Sword has already conducted over 3 million AI-powered sessions with patients. While the company primarily focused on business customers, Bento expressed a desire to make their solutions available to a wider audience. On Tuesday, Sword also disclosed raising $100 million in a secondary sale, providing liquidity to current and former employees as well as early investors. Bento stated that the company expects to achieve profitability this year, but an additional $30 million was raised in a primary sale to update its valuation. According to the release, Sword has accumulated a total of $340 million in funding and is currently valued at $3 billion, up from its valuation of $2 billion in late 2021. The funding round involved a mix of new and existing investors, some of whom have chosen to remain anonymous. Venture firms such as Khosla Ventures, Founders Fund, and General Catalyst have previously invested in Sword. Phoenix has been undergoing testing with certain patients who use Sword's "Thrive" digital physical therapy product. Bento disclosed that the company plans to gradually introduce Phoenix to more patients within Thrive and across other offerings, including its pelvic health solution called "Bloom, " over the next few months.