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The global artificial intelligence (AI) market size was valued at USD 20.67 Billion in 2018 is projected to reach USD 202.57 Billion by 2026, exhibiting a CAGR of 33.1% during the forecast period from 2019 to 2026.
Artificial intelligence is the result of a perfect blend of several technologies leading to the creation of intelligent hardware or software, capable of replicating human behaviors, namely learning and problem-solving. The version of artificial intelligence technology available at present allows machines to complete various human tasks, such as driving automobiles and reacting to their environment, providing virtual assistance, and even playing games. Forms of AI in use today include digital assistants, chatbots and machine learning, among others.
AI will facilitate more seamless integration of supply chain data, enabling anticipatory production and efficient delivery of products to customers. As per the current artificial intelligence market trend, three areas with the biggest AI potential are autonomous trucking and delivery, enhanced security, traffic control, and reduced congestion. AI is likely to trigger the shift to a consumer-oriented economy and move up the value chain into a more sophisticated and high tech-driven level for the manufacturing and commerce sectors.
Artificial intelligence market growth is driven by the increasing adoption of cloud-based applications and services, the rise in the connected device market, considerable investments in 5G technology, and an increase in demand for intelligent virtual assistants. The number of AI technology experts is limited at present.
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Critical challenges affecting the demand for the market include concerns regarding data privacy and the unreliability of AI algorithms. The key market opportunities include the potential of improving operational efficiency in the manufacturing industry and improving customer service in the retail sector. The market is likely to witness increased consumer demand resulting from the availability of higher-quality and personalized AI-enhanced products and services.
Further, increasing the implication of machine learning (M2M, M2P) applications in manufacturing industries is anticipated to drive the market in the forecast period. For instance, in 2018, IBM Corporation acquired Armanta Inc. with an aim to provide AI-based cloud computing platform to financial services firms to fulfil business demands such as CECL (Current Expected Credit Loss Model), FRTB (Fundamental Review of the Trading Book), traded credit risk, and liquidity, portfolio management and more.
"AI-based services to gain momentum during the forecast period"
The software segment accounts for a maximum revenue share of the market. In the case of AI-based services, the initial investment is comparatively low while there are high returns. By incorporating AI in cloud services and enterprise software, companies can implement/deploy cognitive technology with low initial cost and minimal risk. For instance, Netflix used AI to improve search results, thereby preventing customer frustration and saving around USD 1 billion in a year from potential revenue loss.
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"Natural language processing to account for maximum revenue share"
In natural language processing, AI techniques functions to analyze natural language in both spoken and written forms. This segment accounts for the maximum share since it serves many essential applications such as machine translation, text parsing, semantic disambiguation, speech processing, and Informational Retrieval (IR). Machine Learning has been forecasted to be the fastest-growing technology segment. It provides machines that possess the ability to learn and improve the operations between devices without the need for human intervention or developing new programming languages.
"BFSI and government end-use segment to gain traction"
Advertising & media, retail, and BFSI segment have been estimated to together account for nearly half of the market share. Advances in AI have garnered extensive interest from the private and public sectors, which is estimated to support artificial intelligence market growth in the government segment. AI adoption trend in retail has the potential to foster mass production of consumer goods and other labor-intensive activities from which human potential can be freed. Further, many industry players are focusing on developing and deploying ‘Industry 4.0’ which is augmenting the growth of AI-enabled devices in the manufacturing sector.
Globally, North America is anticipated to hold the largest market share of the artificial intelligence (AI) market during the forecast period. North America, being technologically advanced in terms of analytical tools, machine learning, and natural language processing technologies is expected to maintain its dominant position. Moreover, awareness about the advantages of artificial intelligence tools is widespread in the region. Europe is also expected to hold the second position in this market by witnessing moderate growth during the latter half of the forecast period.
North America Artificial Intelligence (AI) Market, 2018
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Asia Pacific is estimated to witness healthy growth in terms of AI implementation. The Chinese government is supporting an AI intelligence plan by merging with Baidu, Inc., to create a national deep learning laboratory comprising intelligent logistics, smart agriculture, manufacturing, military, and other end-use applications. A growing number of biopharma companies in the Asia Pacific are using AI to streamline the drug discovery process. AI algorithms can analyze large volumes of data sets from health records, clinical trials, pre-clinical studies, and genetic profiles. Trends and patterns observed within this data can help develop theories and suggestions at a much faster rate compared to the human research process while delivering quick insights. Further, developed countries such as Japan has become a very attractive country for AI investment and financing, accounting for the majority of market share in the region.
"IBM and Microsoft Corporation to maintain their strong position across different AI-related areas"
Some of the major players in the artificial intelligence market include Alphabet (Google Inc.), Apple Inc., Baidu, IBM Corporation, IPsoft, and Microsoft Corporation. These companies are investing huge sums in artificial intelligence. Companies from software and information technology services firms and AI-focused startups have been gaining interest and support from investors. Further, the majority of startup companies working in the AI market are focusing on applications for machine learning, a type of artificial intelligence tool which allows computers to function without human assistance.
At present, the global market is dominated by the top ten market players holding nearly half of the global market share. The dominance of key players is dependent on its spending on research & development of advanced AI tools, operational efficiency, technology up-gradation, and innovative strategic partnerships and acquisitions.
AI functionality based systems and tools based on different technologies have been offered by key players which eliminate the possibility of human errors from operations to a great extent. At present, the key objective of market innovators is creating expert artificial intelligence systems by using deep learning and neural networks algorithms. These are some of the crucial factors expected to affect the market positioning of players. Other prominent players operating in the global artificial intelligence are MicroStrategy, Inc., NVIDIA, Qlik Technologies Inc., and Verint Systems Inc. (Next IT Corp), among others.
Artificial Intelligence, in general, is the ability of a computer program to analyze, comprehend, operate, make decisions, and gain insights like human beings do. The process of doing manual work has reduced to a great extent, with the emergence of advanced computers. The implementation of artificial intelligence in computing systems increases the chance of reaching accuracy while offering a greater degree of precision. This eliminates the need to write new code every time even in case of a minor error. Such machines gain the capability of digital assistants and can perform tasks continuously.
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The report offers qualitative and quantitative insights on artificial intelligence solutions and services and the detailed analysis of market size & growth rate for all possible segments in the market. The AI market is studied based on segmentation in terms of the offerings, technology, end-use industry, and geographically. Based on the offering, the market is classified into hardware, software, and services. By technology, the market segments include computer vision, machine learning, natural language processing, and others. On the basis of the end-use industry, the global market segments are healthcare, retail, advertising & media, BFSI, automotive & transportation, government, manufacturing, and others. By region, This market is segmented into five major geographic regions, namely, North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. These regions are further sub-segmented into countries for market analysis and estimation.
Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape. Key insights offered in the report are the adoption trends of AI solutions by individual segments, implementation model analysis, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
· Computer Vision
· Machine Learning
· Natural Language Processing
By Industry Vertical
· IT & Telecom
· North America (U.S. and Canada)
· Europe (UK, Germany, France, Italy, Spain, Scandinavia and Rest of Europe)
· Asia Pacific (Japan, China, India, Australia, Southeast Asia and Rest of Asia Pacific)
· Middle East & Africa (South Africa, GCC and Rest of the Middle East & Africa)
· Latin America (Brazil, Mexico and Rest of Latin America)
As per our (Fortune Business Insights) study, the global artificial intelligence market is predicted to reach US$ 202.57 Bn by 2026 with a CAGR of 33.1% (2019 -2026)
Industries which rely heavily on automation and robotics mechanism, prefer to deploy artificial intelligence solutions and services in their business applications. Some of these industries are: - Transportation. In the transportation industries, key companies of AI solution providers such as Baidu Inc. already deployed AI technology in autonomous vehicles. The market of self-driven or autonomous vehicles is robustly driving with the advancement of artificial intelligence technology and machine learning capabilities. - In Healthcare industries, automated surgical robots backed by AI platforms are substantially used for treatment methodology. - Finance industries use automated software enabled with AI technology to complete the transaction securely and reliably. - Advertising and media industries use advanced chatbots enabled with AI technology to increase the customers footfall
As per our study, the adoption of AI is being driven by industries are such as automotive, healthcare, BFSI and advertising & media. In 2018, the global artificial intelligence market was valued at US$ 20.67 Bn, and it is anticipated to reach US$ 202.57 Bn by 2026 growing at a CAGR of 33.1% during the forecast period (2019 -2026)
With the increasing deployment of artificial intelligence technology in heavy manufacturing, healthcare, and retail, there are several possibilities of disruption in these industries. For instance, in the healthcare industry, with the deployment of artificial intelligence mechanisms, there would be more accurate for prediction of diseases and supplements; also it will be useful in predictive care, DNA analysis, and drug formulations.
In the artificial intelligence market, machine learning and computer vision technology are the leading segments. Demand for computer vision technology is expected to increase in the automotive industry in the near future. Due to advancements in smart camera technology and IoT, and also rising penetration of smart camera-based computer vision systems in the automotive industry.
Some of the driving factors for the artificial intelligence market are the rising implementation of AI in Autonomous (Self) driving vehicles and increasing investment for artificial intelligence technology in Industry.
In the artificial intelligence market, some of the key players are Microsoft Corporation, IBM Corporation, Amazon.com, Inc. and Alphabet Inc. These players are focusing on acquisition and collaborating with domestic players to strengthen their AI-based product portfolio.