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The global artificial intelligence (AI) market size was valued at USD 27.23 billion in 2019 and is projected to reach USD 266.92 billion by 2027, exhibiting a CAGR of 33.2% during the forecast period.
The rising number of connected devices and growing adoption of Internet of Things (IoT) are driving the market growth. Proliferation of cloud-based applications across healthcare, retail, manufacturing, and Banking, Financial Services, & Insurance (BFSI) industries and growing sophistication of cyber-attacks are providing new opportunities for the expansion of the artificial intelligence market. For instance, the usage of machine learning (ML) in accurately detecting cancer cells is likely to boost its demand in the healthcare industry.
Artificial Intelligence to Support the Healthcare Industry during COVID-19
The healthcare industry is expected to significantly gain from AI applications during the pandemic. For instance, in the clinical health care processes, AI will help to improve accuracy and efficiency in diagnostics, treatments, and predictions. Considering the volume of data available in electronic health records (EHRs), AI can prove to be vital in predicting patient outcomes. In US, the government is utilizing the data from wearable devices to track the COVID-19 symptoms in the citizens. Similarly, in India the healthcare provider Aster DM, is connecting the hospitals and providing AI based decision support systems for the healthcare workers in telemedicine.
Additionally, AI helps in deriving and mining the virus strain and utilizing it in improving and scaling the testing equipment. This data can be very useful in drug discovery. For instance, the Tata Consultancy Services Innovation lab is utilizing AI capabilities to identify potential molecules to target against the COVID strain. Thus, during the pandemic, the AI market is likely to witness considerable growth.
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Fusion of AI and Cloud Computing to Boost Market Prospects
Companies having strong cloud-based infrastructure such as Amazon Inc., Microsoft Corporation, and IBM Corporation are leveraging their cloud capabilities to provide Cloud AI offerings. On the other hand, companies with limited financial funds and lack of technological expertise have utilized cloud computing technologies for handling AI operations. For instance, a start-up company Veritone Inc. has used the cognitive cloud computing system for building its AI operating system. The operating system offers computation of AI applications which simplifies its operational task for users. Start-ups across the globe are trying to utilize the fusion of these technologies to advance their businesses. This is likely to drive the artificial intelligence market growth.
Increasing Focus on Providing Personalized Customer Service in Real-Time to Drive the Market
In today’s competitive and dynamic business environment, customer engagement is a crucial and dominant influencing factor to achieve success. This has resulted in the adoption of artificial intelligence tools to provide more personalized services in real-time. The AI-integrated platform supports customer services by augmenting messages, sort & support inquiry, email & phone support, and assisting agents, among others. For instance, the start-up Cogito has developed a tool based on deep learning and behavioral science for real-time conversation analysis. It records and analyses the content and the tone of the customer and based on its insights it provides how the customer is feeling. The company implemented its bot in an insurance company with 200 agents. The bot supported the agents in real-time and achieved 26 percent improvement in its promotion and issue resolution procedures.
Thus, the increasing importance of customer services across industries is likely to drive this market.
Growing BFSI Industry to Expand Opportunities for the AI Market
The BFSI industry is likely to widen the implementation of AI. It is already using the technology for trading decisions, chatbots, credit scoring applications, and studying financial market impact analysis. For instance, many banks are using machine learning tools to create trading robots that can self-analyze and teach how to trade, based on historical data. Additionally, BFSI is using AI technology for providing personalized advice to its users regarding debt management, investment, refinancing, and more. Also, the technology has extremely well-proven efficacy in detecting fraudulent activities. This is likely to create extensive opportunities for the technology.
Limitations in Protecting Privacy to Restrict Artificial Intelligence Market Growth
The AI market is likely to face challenges regarding data privacy and varying algorithms. The technology uses machine learning and deep learning tools to offer related results to the users. These tools such as recommendation engines, search algorithms, and adtech neural networks exploit sensitive data of the user. Further, AI algorithms creates the new bit of information based on the historical data, without the consent of the user. Owing to this, Europe brought General Data Protection Regulation, to control the misuse of personal data generated. This is likely to hamper the demand for the technology.
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Increasing Adoption of AI Technology to Boost Services Segment
Our study takes into account the three key components of this market: hardware, AI software, and services. The services segment is expected to gain traction during the forecast period. The integration of AI with the existing systems in companies requires suitable skillset and expertise. Also, to maintain and support artificial intelligence, a profound set of proficiency is essential. The hardware segment is likely to grow with significant AI market share, owing to its increasing opportunities in the semiconductor companies.
Expanding Applications across Industries to Boost Machine Learning Growth
Key technologies that are AI enabled, covered in the scope of study. These include computer vision, machine learning, natural language processing (NLP), and others.
Machine learning technology is supporting various industries such as healthcare, education, automotive and BFSI to improve precision in analysis and other applications. Machine learning (ML) is applicable in the healthcare industry in spotting patterns and extracting data from images, ECGs, and more. Similarly, the increasing application for chat-bots and virtual assistants is likely to boost the demand for the NLP technology. Whereas, the computer vision is offering applications in beyond human capabilities such as detecting and labeling objects.
Ease of Deployment likely to Boost Cloud Adoption
Cloud and on-premises are the two deployment types taken into consideration. On-premises segment is likely to gain maximum revenue share. Whereas, the cloud deployment segment to gain traction owing to less implementation expenses. Also, the cloud offers tools and pre-trained networks, which makes building AI applications convenient. For instance, Microsoft Azure offers 30 pre-trained networks and Amazon AWS offers easy image recognition, chatbot, and translation extensions to host the application. This is likely to boost the demand for cloud deployment.
Retail Industry is Expected to Grow Significantly
Our study focuses on the following industries: healthcare, retail, IT & telecom, BFSI, automotive, advertising & media, manufacturing, and others.
The retail industry is likely to accelerate during the forecast period. 80% of executives expect their retail companies to adopt AI-powered intelligent automation, according to an IBM Institute study. The retail industry is rapidly adopting AI technologies owing to the drastic changes in customers’ shopping habits. Thus, the retail industry is likely to gain rapid growth in the forecast period.
North America Artificial Intelligence Market Size, 2019 (USD Billion)
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North America held significant share of the market in 2019, with the U.S. being a major contributor owing to rising government initiatives and investments in the market. Countries of the European Union are strategically investing in AI. For instance, the European Investment Fund allotted USD 111 million funds for the AI start-ups in 2020.
Asia Pacific is expected to witness rapid growth in the forecast period. China accounts for the dominant revenue share owing to increasing investments in the technology. To provide strong results in the field, the country launched the New Generation Artificial Intelligence Development Plan. Similarly, India is likely to gain traction owing to the government's pilot project for implementation of AI in the agriculture and healthcare industries. The rest of Asia Pacific is also expected to grow at a promising pace on account of economic development of countries such as Bangladesh, Vietnam, and Indonesia.
The market in Latin America and Middle East & Africa is likely to grow significantly during the forecast period. The Saudi Arabian government established Saudi Data and Artificial Intelligence Authority (SDAIA) to boost the market.
Strategic Acquisitions of Start-ups to Expand Globally to be Key Strategy for Players
Globally the market is witnessing the massive start-up enrolment. These key players are collaborating with the industries such as manufacturing, healthcare, retail among others to offer customized AI solutions. Whereas, the prominent players of the market are focusing on the research and development, to cater the rising needs of the industries. To expand the presence globally and to enhance its offerings, these players are acquiring key start-ups across the globe. Similarly, Apple Inc. has enhanced its AI offerings by acquiring prominent startups in the market. Additionally, it uses the expertise of these start-ups’ engineer and technicians for developing advanced technologies such as big data analytics.
January 2020 –Apple Inc. acquired Seattle-based low-power technology provider Xnor ai. The company will be using its people detection technology in its smart cameras for security applications.
May 2020 –Apple Inc. acquired machine-learning start-up Inductiv Inc. for improving its speech recognition and smart assistant Siri. The acquisition will allow Apple to identify and correct the errors in Siri data and accordingly set the tasks.
An Infographic Representation of Artificial Intelligence Market
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The artificial intelligence market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
Value (USD billion)
The artificial intelligence market is projected to reach USD 266.92 billion by 2027.
In 2019, the market value stood at USD 27.23 billion.
The market is projected to grow at a CAGR of 33.2% during the forecast period.
The machine learning segment is likely to lead the market.
Rising government initiatives is boosting the market growth.
Apple Inc., Baidu Inc., IBM Corporation, SAP SE, Microsoft Corporation, Google LLC, among others are the top players in the market.
North America region is expected to hold the highest market share.
Retail and healthcare industries are expected to adopt AI technology.
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