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The global artificial intelligence (AI) market was 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.
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Artificial intelligence market growth is driven by an increasing adoption of cloud-based applications and services, and rise in the connected device market. Additionally, considerable investments in 5G technology and increase in demand for intelligent virtual assistants are playing key role in AI market development. For instance, in March 2019 Apple Inc. acquired machine learning startup Laserlike of Silicon Valley which is aimed to strengthen its artificial intelligence efforts, including the company’s virtual assistant called Siri.
Artificial intelligence is based on complex mathematical models that requires large amount of data. This requirement of data can be easily fulfilled by cloud technology in secure and reliable environment at low cost. Key players such as Microsoft Corporation, IBM Corporation, and Amazon are focusing on integrating cloud computing with artificial intelligence. Some of the AI cloud services are Amazon AWS AI, Google Cloud Machine Learning, and HPE HavenOnDemand. These cloud computing services are backed up by ‘Analytics as a Service’ (AaaS) offerings and allow users to quickly develop and run intelligent applications.
Big data has a key role in data mining, management, handling the enormous data generated and is considered among leading trends in the artificial intelligence market landscape. The robust increasing volume of structured and unstructured data is creating huge demand for big data applications. Big data, when enabled with AI, allows user to enhance and automate complex descriptive and predictive analytical tasks. Due to this, enterprises are inclining towards the adoption and implementation of big data enabled AI solutions.
"Focus on Improving Operational Efficiency and Customer Service to Augment AI Market Development"
The number of AI technology experts is limited at present. The key artificial intelligence 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 gain traction from the rising availability of high-quality and personalized AI-enhanced products and services.
Further, increasing 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.
"Development of AI-powered Industrial Robots to Drive Market"
The demand for customized robots has increased robustly over the past decade. Several key players in developed countries are currently focusing on manufacturing and supplying AI-powered industrial robots. For instance, in 2016, China supplied around 87,000 units of industrial robots worldwide. Similarly, in 2016, South Korea and Japan supplied around 41,400 and 38,600 units respectively. These industrial robots require artificial intelligence platform for their functioning. This, in turn is augmenting the artificial intelligence technology adoption.
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"Difficulty in Data Labelling and Limited Application in Complex Models to Restrict Market Growth"
Critical challenges affecting the growth of artificial intelligence market include concerns regarding data privacy and unreliability of AI algorithms. In some cases, artificial intelligence is unable to perform automated labelling for underlying data. For this service, professionals are hired to handle the labelling. Further, due to its complex model, AI implementation remains low in applications where extensive explanatory features are required. Another factor inhibiting the growth of this market is lack of AI skilled professionals.
"AI-based Services to Gain Momentum during the Forecast Period"
Based on the component, the market is classified into hardware, software, and services. Software segment accounts for the maximum 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 reducing subscription cancellations and saving around USD 1 billion in a year from potential revenue loss.
"Natural Language Processing to Account for Maximum Share"
By technology, the market segments include computer vision, machine learning, natural language processing, and others. Computer vision in AI function identifies patterns along with acquiring, analyzing and synthesizing realistic interactive interfaces and then uses ID tags to present photos of related items. In natural language processing, AI techniques function 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). Among technologies, machine learning is expected to be the fastest-growing segment. It enhances the machines ability to learn and improve without the need for human intervention or developing new programming languages.
"AI Adoption to Increase Majorly in BFSI and Government Sectors "
Global artificial intelligence market based on end-user industry includes healthcare, retail, advertising & media, BFSI, automotive & transportation, government, manufacturing, and others. Of these, advertising & media, retail, and BFSI together occupy for nearly half of the market share. Advances in AI have garnered extensive interest from the private and public sectors, which suggests 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. Several industry players are focusing on developing and deploying ‘Industry 4.0’ which is augmenting the growth of AI-enabled devices in the manufacturing sector.
The findings based on our research methodology indicate North America to hold the largest share in the global 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 shows signs of emerging as dominant geography throughout the forecast period. Moreover, awareness about the advantages of artificial intelligence tools is widespread in the region. Europe is expected to hold the second position in this market by witnessing moderate growth in long-term period.
North America Artificial Intelligence (AI) Market, 2018 (USD Billion)
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As per our market research study, Asia Pacific is expected 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 of intelligent logistics, smart agriculture, manufacturing, military, and other end use applications. A growing number of biopharma companies in 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 pattern 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 are increasingly investing in AI, thereby accounting for the majority of market share in the region.
"Apple Inc. Focusses on Strategic Acquisition of Innovative Startups to Strengthen its AI Solution Offerings"
"Key Players to Maintain their Strong Position Across Different AI-related Areas"
Key companies are investing considerable sums in artificial intelligence. 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 that allows computers to function without human assistance.
At present, the global artificial intelligence market is dominated by the top ten market players holding nearly half of the share. The dominance of key players is dependent on their spending in the research & development of advanced AI tools, operational efficiency, technology upgradation, and innovative strategic partnerships and acquisitions.
AI functionality based system 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 to create 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.
The field of artificial intelligence is shifting towards building smart ecosystem, to efficiently collaborate with humans, and educate them about new technologies and their related benefits. AI integration is likely to improve end-to-end supply chain visibility and accelerated information sharing and decision making. This can be achieved by means of cognitive technology, predictive analytics, collaboration technology, and generating automated reports.
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.
An Infographic Representation of Artificial Intelligence Market
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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, 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.
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Value (USD billion)
By Industry Vertical
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.