Product Code: 72056
The expenditure on the global artificial intelligence market was estimated to be USD 50.13 billion in 2020. It is expected to reach USD 185.17 billion by 2026, registering a CAGR of 26.1% during the forecast period (2021-2026). The COVID-19 pandemic has both positively and negatively impacted the adoption of AI across industries. For instance, within a few months, governments worldwide have learned to use AI as a weapon to fight the virus by educating the public, screening patients, and tracking and tracing contacts.
According to a study released in October 2020 by RELX, an information and analytics company, COVID-19 is one of the most pressing issues facing US executives. The virus has been reshaping and disrupting industries across the country. Most of the respondents (68%) stated that they had increased their investments in AI technologies during the pandemic, with about 48% investing in new AI technologies and 46% investing in upgrades already in use AI tech. On similar lines, 63% of business leaders polled that AI technologies positively impacted the businesses' ability to sustain themselves during the pandemic.
- Further, the rising trend of multi-cloud functioning and the growing need for cloud-based intelligence services also boost the demand for the market studied. According to IBM, through 2021, approximately 98% of all organizations have adopted multi-cloud architectures. However, only 41% have a multi-cloud management strategy, and only 38% have procedures and tools to operate a multi-cloud environment. This is expected to create massive growth prospects for the global AI market.
- Additionally, bots and digital assistants, machine learning frameworks, cognitive computing APIs, and fully managed machine learning services are major opportunities for the AI market, and industries are investing in these.
- However, factors such as the costs of business consulting, research and development, and computing power are becoming a roadblock to the growth of this technology. Also, the cost to build minimally viable products is incurred before implementation. For implementation, factors such as automatic data preparation, delivering the infrastructure, processing, and making the product actionable for systems and employees form part of the total cost. The implementation cost is high and depends on the size of the industry.
Key Market Trends
Massive Growth in Data Generation due to Technological Advancements
- With solid internet penetration and new technologies, there is a massive growth in the quantity of data generated worldwide. Technologies such as the Internet of Things, Industry 4.0, and 5G are encouraging artificial intelligence.
- According to a report by Huawei, titled "GIV 2025", there may be 40 billion smart devices and 100 billion electronic connections by 2025. The annual storage of data generated from this may be up to 180 billion TB, a twenty-fold increase compared to 2020. Moreover, 86% of the global companies may adopt AI, and data utilization rates are expected to reach 80%. Such growth in the data produced is driving the market for AI.
- According to Ericsson, in the second half of 2020 and in 2021, the use of 5G modules and other-platform devices is expected for commercial vehicles, cameras, industry routers, and gaming. Such devices may support mobile broadband capabilities, but the performance is likely to evolve toward time-critical communication capabilities that are needed via software upgrades on devices and networks. The total number of IoT connections was 12.6 billion in 2020. It is expected to reach 26.9 billion in 2026.
- Furthermore, remote working conditions have been one of the major drivers that increased technology adoption in 2020. According to Ericsson, in the North American region, the monthly usage per smartphone is estimated to reach 11.1 GB by the end of 2020, registering an increase from 7.8 GB in the end of 2019. With 5G set to capture a significant number of early adopters, the company expects a rise in data usage. In South Korea, a leading 5G market, the monthly average data usage per 5G subscriber is more than 25 GB. The data traffic per smartphone is expected to reach 41 GB per month in 2026.
United States as Part of North America Expected to Account for Major Market Share
- The United States has a robust innovation ecosystem, which is fueled by strategic federal investments in advanced technology, complemented by the presence of visionary scientists and entrepreneurs coming together from the world, and renowned research institutions. All these factors have propelled the development of artificial intelligence in the North American region.
- Several government initiatives for AI in the United States are expected to impact the market positively. For instance, in February 2019, the US government launched the American Artificial Intelligence Initiative, the nation's strategy for promoting American AI leadership. The United States had planned to promote federal investment in AI R&D in collaboration with academia, industry, international partners and allies, and other non-federal entities to generate multiple technological breakthroughs in AI.
- Further, the US Congress passed the Omnibus Appropriations Bill for 2021, which provided funding for several military AI initiatives. The bill supports the artificial intelligence activities of the Department of Defense and is intended to improve the affordability and effectiveness of military operations. It includes USD 137 million for a Joint Artificial Intelligence Center, which was also given new acquisition authority in the 2021 National Defense Authorization Act.
- The market is witnessing lucrative opportunities, which can be attributed to natural language processing, which is being implemented in chatbots, and contract intelligence, where AI reads the free text in contracts and non-compliance in documents. Several market incumbents are establishing a competitive strategy by explicitly offering solutions like AI Chatbots for banking.
- For instance, in May 2020, Finn AI announced its partnership with ASI Group, an AI-powered conversational banking technology provider. The partnership is expected to enable ASI Group's bank and credit union customers in the United States and Latin America to quickly and easily add the Finn AI banking chatbot to online and mobile banking channels for automating and scaling self-service.
- The growing data security concerns globally and the rising number of data breach incidents related to the cloud have acted as significant restraints to the growth of the market studied through late 2020 and early 2021.
The artificial intelligence market comprises global players focusing on gaining a point of difference in a competitive market space. In addition, new startups, such as Anodot, AI.Reverie, and Dataiku, are gaining traction in the market. Overall, the competitive rivalry within the industry is expected to be high during the forecast period. The number of firms is increasing rapidly, and there are several innovative practices to gain an edge in the market. For instance, in March 2021, Intel collaborated with Microsoft Cloud (Azure) to work on the Data Protection in Virtual Environments (DPRIVE) program of the Defense Advanced Research Projects Agency (DARPA). The program aims to develop an accelerator for fully homomorphic encryption.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
TABLE OF CONTENTS
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
- 4.1 Market Overview
- 4.2 Industry Attractiveness - Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Buyers
- 4.2.3 Threat of New Entrants
- 4.2.4 Threat of Substitutes
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Technology Snapshot
- 4.3.1 Machine Learning
- 4.3.2 Computer Vision
- 4.3.3 Natural Language Processing (NLP)
- 4.3.4 Context-aware Computing and Other Technologies
- 4.4 Market Drivers
- 4.4.1 Increasing Demand for Predictive Analytics
- 4.4.2 Massive Growth in Data Generation due to Technological Advancements
- 4.4.3 Growth in Adoption of Cloud-based Applications and Services
- 4.4.4 Rising Demand for Enhanced Consumer Experience
- 4.5 Market Challenges
- 4.5.1 High Initial Costs and Concerns over Replacement of Human Workforce
- 4.5.2 Lack of Skilled AI Technicians
- 4.5.3 Concerns Regarding Data Privacy
- 4.6 Key Use-cases/Applications
- 4.6.1 Sales and Marketing
- 4.6.2 Logistics Management
- 4.6.3 Automated Customer Service
- 4.6.4 Automated Threat Intelligence
- 4.6.5 IT Automation and Other Applications
- 4.7 Impact of COVID-19 on the Industry
5 MARKET SEGMENTATION
- 5.1 By Component
- 5.1.1 Hardware
- 5.1.2 Software and Services
- 5.2 By End-user Industry
- 5.2.1 BFSI
- 5.2.2 Fashion and Retail
- 5.2.3 Healthcare and Lifesciences
- 5.2.4 Manufacturing
- 5.2.5 Automotive
- 5.2.6 Aerospace and Defense
- 5.2.7 Construction
- 5.2.8 Other End-user Industries (IT and Telecom, Government, Media and Entertainment)
- 5.3 By Geography
- 5.3.1 North America
- 18.104.22.168 United States
- 22.214.171.124 Canada
- 5.3.2 Europe
- 126.96.36.199 United Kingdom
- 188.8.131.52 Germany
- 184.108.40.206 France
- 220.127.116.11 Rest of Europe
- 5.3.3 Asia-Pacific
- 18.104.22.168 China
- 22.214.171.124 Japan
- 126.96.36.199 India
- 188.8.131.52 South Korea
- 184.108.40.206 Rest of Asia-Pacific
- 5.3.4 Latin America
- 5.3.5 Middle-East and Africa
6 COMPETITIVE INTELLIGENCE
- 6.1 Company Profiles
- 6.1.1 IBM Corporation
- 6.1.2 Intel Corporation
- 6.1.3 Microsoft Corporation
- 6.1.4 Google LLC
- 6.1.5 Amazon Web Services Inc.
- 6.1.6 Oracle Corporation
- 6.1.7 Salesforce.com Inc.
- 6.1.8 SAP SE
- 6.1.9 SAS Institute Inc.
- 6.1.10 Cisco Systems Inc.
- 6.1.11 Siemens SE
- 6.1.12 NVIDIA Corporation
- 6.1.13 Zebra Medical Vision Inc.
7 INVESTMENT ANALYSIS
8 FUTURE OF THE MARKET