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Introduction:
Artificial Intelligence (AI) has transformed from a distant vision of the future to an integral part of our present reality. From self-driving cars to voice assistants, AI is revolutionizing industries across the globe. The AI industry and market have witnessed explosive growth in recent years, captivating the imagination of entrepreneurs, investors, and technologists alike. In this article, we will delve into the thriving AI landscape, exploring the industry’s remarkable growth and discussing the opportunities and challenges that lie ahead.
Artificial intelligence (AI), generally termed machine intelligence, is a branch of computer science dealing with the creation and management of technology that can learn to make decisions and conduct transactions on behalf of users. IT consultancy Gartner defines it as “applying advanced analysis and logic-based techniques, including machine learning (ML), to interpret events, support and automate decisions and to take action.”
The Rapid Rise of AI:
The AI industry has experienced an unprecedented surge in growth, fueled by advancements in machine learning, natural language processing, computer vision, and other AI technologies.
The artificial intelligence market size to grow from USD 150.2 billion in 2023 to USD 1,345.2 billion by 2030, at a Compound Annual Growth Rate (CAGR) of 36.8% during the forecast period. Artificial intelligence (AI) is revolutionizing multiple industries, positioning itself as a key driver for emerging technologies such as big data analytics, robotics, and the Internet of Things
(IoT). Furthermore, the rise of generative AI tools such as ChatGPT and AI art generators highlights its mainstream prominence. With its continued trajectory, AI is set to persist as a powerful technological innovator, propelling advancements in the foreseeable future.
For in-depth understanding on ChatGPT technology and applications please visit: ChatGPT and Beyond: The Revolutionary Impact of Generative AI
This exponential growth can be attributed to several factors.
- Increasing Data Availability: The proliferation of digital technologies has led to the generation of massive amounts of data. AI thrives on data, and with the abundance of information available, organizations are leveraging AI to extract insights, make data-driven decisions, and enhance operational efficiency.
- Technological Advancements: AI algorithms and models have become more sophisticated, enabling breakthroughs in areas such as deep learning and reinforcement learning. These advancements have expanded the range of AI applications, from autonomous vehicles and virtual assistants to personalized marketing and healthcare diagnostics.
- Cloud Computing and Big Data Infrastructure: The advent of cloud computing and the availability of scalable big data infrastructure have democratized AI, making it more accessible to businesses of all sizes. Cloud platforms provide the computational power and storage necessary to train and deploy AI models, lowering barriers to entry for companies wanting to adopt AI solutions.
The number of U.S. AI companies has doubled since 2017. According to Tracxn Technologies, which tracks startup businesses, as of the third quarter of 2022, there are 13,398 artificial intelligence startups in the United States.
Artificial Intelligence (AI) Market: Growth Drivers
* Increasing need to automate processes driving the growth of the market.
AI, particularly computer vision and machine learning, is transforming the robotics business today. Businesses are exploring completely autonomous robots that can sense, interact, and conceive the environment around them in order to stay ahead in a global market. Industries are searching for reliable and experienced technology associates as they initiate to direct this current
technological transformation. Deep learning models handle enormous amounts of data, such as photos, texts, and sounds, using artificial neural networks to provide correct results.
Artificial intelligence-driven automation has proven effective in a variety of areas, including healthcare, aviation, agricultural, energy, and material handling. AI is being largely used to diagnose equipment failures and detect product irregularities, in addition to automating operations. All these factors assure global artificial intelligence (AI) market expansion over the forecast period.
The rapid penetration of the digital technologies and internet has significantly contributed towards the growth of the global artificial intelligence market in the past few years. The heavy investments by the tech giants in the research and development are continuously fueling the technological advancements in various industries.
The burgeoning demand for the artificial technology among the various end use verticals such as automotive, healthcare, banking & finance, manufacturing, food and beverages, logistics, and retail is expected to significantly drive the growth of the global artificial intelligence market in the forthcoming years. Technological innovations have been always an important part of the majority of the industries.
The rising popularity of various life-saving medical devices and the self-driving feature in the new electric vehicles is significantly boosting the growth of the AI market across the globe. The shifting focus of the globe toward digitalization is positively impacting market growth.
In addition, AI has been extensively utilized in smart home infrastructure management for gathering data from home automation devices, predicting user behavior, providing maintenance information, and enhancing data security and privacy.
Artificial Intelligence (AI) Market : Restraints
* Dearth of AI experts in the industry may hamper the market growth.
AI is a complicated system, and firms need employees with certain skill sets to create, manage, and deploy AI systems. Workers working with AI systems, for example, should be familiar with technologies like deep learning, cognitive computing, machine learning, and image recognition. Further, integrating AI solutions with current systems is a complex endeavor that necessitates
considerable data processing to emulate human brain activity. Even slight faults can cause a system to fail or a solution to malfunction, which can have a significant impact on outcomes and intended results. Such factors can affect the market growth during the forecast period.
The lack of technical personnel with the appropriate experience and training to implement and operate AI solutions is a major obstacle to the growth of the AI market. In contrast, businesses with specialized technology companies and manufacturing units that require high efficiency are anticipated to adopt robots built into artificial intelligence (AI). This will present ample opportunities for the key players in the AI market in the next decade.
Global Artificial Intelligence (AI) Market : Opportunities
* Increasing investments by the public as well as private sectors to support AI technology is likely to offer better growth opportunities to the market.
Expanding applications and simple deployment techniques have drawn governments’ and private organizations’ attention to AI technology, resulting in increased government expenditures on AI and related technologies. Government agencies, public sector organizations, and non-governmental organizations have begun allocating funds for AI-based pilot initiatives in a
variety of areas, including traffic management, road & public safety, and government document digitalization. The US government committed more than USD 1 billion in funding for AI and quantum information science research laboratories in August 2020. Moreover, the Canadian government pledged USD 518 million in March 2021 to expand advanced technology research infrastructure, while the UK government has financed USD 27.5 million in 15 innovative AI
research initiatives in the healthcare industry.
Global Artificial Intelligence (AI) Market : Challenges
* Concerns about privacy and data security are the major challenges for the market expansion.
In the future, security risks will become even more prevalent. The financial effect of cybercrime has climbed by approximately 78 percent in the last five years, and the time it takes to handle intrusions has doubled. Several IT teams are finding it difficult to keep up with the growing amount of data from diverse sources. Security breaches and data losses have escalated as a result
of the inefficiencies of managing exabytes and petabytes of data. To provide an amazing client experience in today’s competitive industry, marketing teams demand real-time and secure data. Organizations are collecting data from a variety of sources and measuring it online. Such data, which is utilized for assistance and communication, might be of several sorts. Public data, large
data, and tiny data obtained from clients are examples of these data kinds. To preserve consumer confidence, companies must provide high-level data security as cyberattacks have substantially risen in number and sophistication. All such factors pose a major challenge to the global artificial intelligence (AI) market growth.
Segment Overview
The global AI market is segmented based on type, end-user, and geography.
– Based on components, the market is classified into hardware, software, and services.
– Based on deployment, the market is categorized into cloud and on-premise.
– Based on application, the market is categorized into virtual assistants/chatbots, forecasts & modeling, text analytics, speech analytics, computer vision, predictive maintenance, and others.
– Based on end-users, the market is categorized into BFSI, government, aerospace and defense, automotive, healthcare IT & telecom, manufacturing, education, retail & e-commerce, energy & utilities, media & entertainment, and others
– Region-wise, the market is segmented into North America, Europe, Asia-Pacific, and RoW.
Technology Insights
Based on the technology, the deep learning segment accounted largest market share in 2022. This dominance is attributable to its complex applications driven by the data such as audio, video, and text recognition. The rising technological advancements in the field of deep learning is expected to overcome the challenges associated with the high volumes of data. Furthermore, the rising adoption of the deep learning technology in the medical field is expected to further fuel the growth of the segment during the forecast period.
The huge share of the machine learning in the total investments in AI technology is fueling its adoption in various applications such as hypothesis generation, clustering, altering, tagging, clustering, filtering, visualization, and navigation promotes the development of the cognitive solutions. The rising deployment of the on-premises hardware and cloud computing platforms for handling and storing huge volumes of data has significantly contributed to the rise of the data analytics platforms. The rising investments by the top tech giants in the innovation and research are expected to fuel the growth of the AI market in the upcoming future.
End User Insights
AI Applications Across Industries:
The AI revolution is permeating almost every industry, transforming traditional business models and creating new opportunities. Let’s explore some key sectors where AI is making a significant impact:
- Healthcare: AI is revolutionizing healthcare delivery, from early disease detection and diagnosis to personalized treatment plans. AI-powered systems analyze medical images, interpret patient data, and assist in drug discovery, leading to improved patient outcomes and more efficient healthcare processes.
- Finance: AI is reshaping the financial industry by automating tasks, detecting fraud, and enabling personalized financial services. Machine learning algorithms analyze vast amounts of financial data to identify patterns, make predictions, and optimize investment strategies.
- Manufacturing: AI is driving the fourth industrial revolution, also known as Industry 4.0, by powering smart factories. AI-powered robots and automation systems enhance productivity, quality control, and predictive maintenance, enabling manufacturers to optimize production processes and reduce costs.
- Retail and E-commerce: AI is transforming the retail landscape by enabling personalized customer experiences, demand forecasting, and inventory management. Recommendation systems powered by AI algorithms analyze customer preferences and browsing behavior to offer tailored product recommendations.
The advertising & media segment has garnered largest market share in 2022. The rising adoption of AI in the marketing applications has fueled the growth of this segment. The increased investments by the various companies in the marketing and advertisement have led to the dominance of the marketing & media segment in the global AI market.
The healthcare segment is expected to overtake the advertising & media segment during the forecast period. The increased adoption of the AI in various applications such as virtual nursing assistants, robotic surgery, clinical trials, automated image diagnosis, and so on is significantly fostering the growth of this segment. Furthermore, the rising penetration of the telehealth platforms and rising adoption of the remote monitoring systems and electronic health records is expected to boost the growth of this segment during the forecast period.
Solution Insights
AI as a platform spans hardware, software, and on-demand services. All three categories have very different players, although there is some overlap between hardware and software players.
AI Hardware
According to the market research firm Tractica, the global AI-driven hardware market is in the process of growing from a mere $19.63 billion back in 2018 to an expected $234.6 billion by 2025. The AI-driven hardware market includes categories such as CPU, GPU network products and storage devices.
When it comes to AI hardware, the real players are chipmakers, because AI processing is vastly different from typical application processing using CPUs. For the most part, that involves GPU makers, but in recent years there have been startups using new chip designs specifically geared toward AI processing in the hopes of being more efficient and faster than GPUs.
The leading vendor in AI hardware is GPU maker Nvidia. It has repurposed chips normally used to accelerate video games as AI processors, working much faster than an x86 CPU. AMD was not much of a player in this field for a long time because it was struggling to survive, but it has made a remarkable comeback in recent years and is now making serious inroads in the AI and high-performance computing (HPC) market.
Intel is also finally finding its footing in the AI space. It has an inference processor, called Goya, and a processor specifically for self driving cars called Mobileye, as well as its Altera FPGA line for training processing. But it never could quite get the GPU product right until now. Its Xe architecture will be sold under the Arc brand name for consumer GPUs while the AI/HPC product will be known as Ponte Vecchio.
All of the major server vendors – the top brand names like HPE, Dell, and Lenovo as well as vendors such as Supermicro, Wiwynn, and Inspur – all have AI-oriented hardware using chips from Intel, AMD, and Nvidia.
The hardware is estimated to be the fastest-growing segment during the forecast period. The artificial intelligence hardware includes various components such as CPU, GPU, ASIC and FPGA. The huge demand for the CPUs and GPUs owing to their high computing power has resulted in the dominance of the CPU and GPU in the hardware segment. The rising adoption of the AI technology across the different end use verticals is expected to boost the demand for the artificial intelligence hardware systems in the forthcoming years.
AI Software
The software segment contributed largest share in 2022. The improvements in the data storage system, parallel processing, and improved computing power are the major drivers of the software segment in the AI market.
The higher demand for the software technologies for the deployment and designing of AI applications such as linear algebra, video analytics, hardware communication capacity, inference, and sparse matrices is fueling the growth of the segment. The rising need for the enterprises to gain meaningful data and information through visual content analysis is expected to boost the demand for the software solutions in the global artificial intelligence market.
But there are many other vendors. Gartner estimates worldwide AI software revenue was $62.5 billion in 2022, an increase of 21.3% from 2021.
AI-as-a-Service
AI is also being made available as a service, just like software, infrastructure, platform, and other on-demand services through cloud service providers. AI-as-a-service has an appeal to many midsized and smaller enterprises because it means that they don’t have to make the massive investment in AI hardware.
AI hardware is extremely powerful. It’s also extremely expensive. The only real need for horse power is in the training segment. The inference portion of AI, which is where it will mostly be used, does not require high performance computing. A company may perform algorithm training just a few times a year, but then run inferencing against those algorithms as part of business.
That means a company’s expensive AI training hardware, which can easily run into the six and seven figures, will sit idle for long periods because it’s not needed. So why buy when you can rent for the short period you need it? Using AI-as-a-Service, a company on a budget can do the expensive training portion through a cloud provider for much less than the cost of investing in the hardware.
AI-as-a-Service is provided by the top cloud hyperscalers: AWS, Microsoft, Google, and in particular IBM. IBM has lagged behind the other major cloud vendors in overall cloud market share, but it has made a significant AI effort with IBM Watson Cloud. First, it allows companies to make AI a part of their existing applications to make more accurate predictions, automate the decision making processes, and get optimized solutions.
Watson has a number of pre-built applications, such as Watson Assistant, Watson Speech to Text, and Watson Natural Language Understanding. IBM Watson Cloud also provides AI solutions for specific markets such as AI for Customer Service, AI for Financial Services, and AI for Cybersecurity.
Regional Analysis
North America led the global artificial intelligence (AI) market in 2021, accounting for about 43 percent of overall revenue. Federal authorities have established standards for the development and real-world application of AI-based systems across several industrial sectors as part of this project
The North American region is projected to hold the dominant share by 2030. North America has been at the forefront of AI research and development for decades. North America is home to a large number of technology firms, as well as a multitude of research and development institutions. The United States, Canada, and Mexico are among the major markets for AI-based services and technologies.
In addition, the expanding number of start-ups and government assistance, as well as the increasing use of machine learning to create novel therapeutic and diagnostic procedures in the medical field, are all contributing to the expansion of the regional market. Moreover, US companies are leading innovation in specific branches of artificial intelligence, including network analysis and face recognition for Facebook, and consumer analytics for Amazon.
These companies are developing commodity systems that can be harnessed by the broader business community, large and small, rather than using AI for their own purposes. In North America, AI is used most actively for customer service, research and development, manufacturing, and operations. The factors above are responsible for the growth of the regional AI market.
The market in Asia Pacific is projected to develop at the fastest CAGR. The use of AI services in major end-user sectors including healthcare, manufacturing, and automotive in nations like China, Japan, South Korea, and Australia has fueled this expansion.
Key Market Players
The emerging and leading players in the AI market include Apple Inc., Amazon Web Services Inc., Alphabet Inc., Baidu Inc., Facebook Inc. Google, Intel Corporation, IBM Corporation, Microsoft Corporation, NVIDIA Corporation, Oracle Corporation, SAP SE, Salesforce, Samsung Electronics Co.Ltd., SAS Institute Inc., Oracle, Cisco, Alibaba Cloud, Siemens, NVIDIA Corporation, and Huawei.
The top global tech giants such as Google, Microsoft, IBM, Amazon, and Apple are increasing their investments in the upgradation and development of various applications of AI. The rising efforts of the tech giants towards improving the access to the AI is expected to foster the growth of the global AI market during the forecast period.
Future Trends
The future of looks to be more, faster, and larger investments. Clearly there will be many more use cases for AI, many more applications. The hardware will get faster, leading to more powerful AI systems. And the data sets will get bigger, meaning more complex AI applications in the future.
Artificial intelligence programs are currently being put to the test against intelligence criteria that are outside of human perception, including AI applications in quantum and supercomputers. Artificial intelligence technology advances like these are likely to contribute to the artificial intelligence market’s growth in the future years.
Technology Roadmap of Artificial Intelligence till 2030
Short-term roadmap (2023-2025)
- Advancements in generative models for content creation.
- Growing Adoption of Federated Learning for Privacy-Preserving Distributed Model Training.
- Advancing transparency and interpretability through Explainable AI methods in decisionmaking.
Edge AI gains traction with decentralized Al processing and decision-making.
Mid-term roadmap (2025-2028)
- Sophisticated Generative AI models boost quality and diversity.
- Advancements in federated optimization algorithms and secure aggregation methods boost
scalability and performance of federated learning systems. - Explainable AI will enhance the interpretability and transparency of AI models.
- Edge AI will become more sophisticated, leveraging advanced hardware and algorithms.
Long-term roadmap (2028-2030)
- Al-generated content reaches human-level sophistication, redefining artificial and human
creativity. - Wide deployment of federated learning empowers secure and scalable solutions across
industries. - Explainable AI emerges as a fundamental requirement for AI systems in all industries.
- Advanced AI processing on edge devices for autonomous decision-making, real-time
intelligence, and efficient data processing in diverse environments
Challenges and Ethical Considerations:
As the AI industry continues to grow, it faces certain challenges and ethical considerations that must be addressed:
- Bias and Fairness: AI models can perpetuate biases present in training data, leading to unfair outcomes. It is crucial to ensure transparency, fairness, and accountability in AI systems, promoting unbiased decision-making and addressing societal concerns.
- Privacy and Security: The vast amounts of data used in AI applications raise concerns about privacy and security. Organizations must adopt robust data protection measures and adhere to strict ethical standards to safeguard user information.
- Workforce Displacement: The widespread adoption of AI technology has sparked concerns about job displacement. As certain tasks become automated, there is a need for reskilling and upskilling the workforce to adapt to the changing job landscape.
Conclusion
In conclusion, the AI industry and market are experiencing a period of remarkable growth and transformation. The advancements in AI technologies, coupled with the increasing availability of data and scalable infrastructure, have propelled the industry to new heights. AI is revolutionizing various sectors, including healthcare, finance, manufacturing, and retail, offering unprecedented opportunities for innovation and efficiency.
However, as the AI revolution progresses, it is essential to address challenges such as bias and fairness, privacy and security, and workforce displacement. Ethical considerations must be at the forefront of AI development, ensuring that AI systems are accountable, transparent, and unbiased.
Navigating the AI revolution requires a collaborative effort from policymakers, industry leaders, and technologists to harness the potential of AI while mitigating its risks. By fostering a responsible and inclusive approach to AI, we can harness its transformative power to create a better future.
As we venture into the booming AI industry and market, let us embrace the opportunities, tackle the challenges, and steer the AI revolution towards a future that benefits society as a whole.
Recent Developments
July 2022
SAP SE announced the acquisition of a search-driven analytics firm, Askdata. This acquisition helped German multinational companies to provide better-informed decisions by leveraging AI-driven natural language searches.
June 2022
Alphabet Inc.’s Google launched Vertex AI, a new managed AI platform in the workspace. This new platform democratizes AI by accelerating the adoption of machine learning models across businesses, allowing for the deployment of models in production, ongoing monitoring, and the use of AI to generate business impact.
February 2022
Apple announced the strategic acquisition of AI Music, which uses artificial intelligence to generate tailor-made music. This acquisition would increase Apple’s audio technology that could be used across its slate of audio offerings.
June 2022
AWS launched a machine learning (ML)-powered service, Amazon CodeWhisperer. This service helps increase developers’ productivity by offering code suggestions based on their natural remarks and earlier code.
April 2022
Salesforce launched a new service and marketing cloud innovation that uses trusted data and AI-powered conversational intelligence for customers. These technologies help service teams and marketers to create more personalized experiences for every industry, including retail, manufacturing, and healthcare.
April 2022
HP launched the new HPE Machine Learning Development System. The new system integrates machine learning software platform, computing, accelerators, and networking to develop & train more accurate AI models faster and at scale.
November 2021
IBM announced a partnership with NeuReality to develop AI inference platforms. This partnership evaluated NeuReality’s products for use in IBM’s Hybrid Cloud, including AI use cases, system flows, virtualization, networking, and security.
References and Resources also include:
https://www.eweek.com/big-data-and-analytics/ai-market/
https://finance.yahoo.com/news/artificial-intelligence-ai-market-size-135900934.html
https://www.marketsandmarkets.com/Market-Reports/artificial-intelligence-market-74851580.html
