Artificial Intelligence Global Revenue will Reach $554.3B
The global market for intelligent business technology solutions continues to evolve, as more CIOs and CTOs seek ways to automate routine tasks and associated business processes. The solutions have gained momentum in the marketplace as offerings matured and became mainstream across many industries.
Worldwide revenues for the artificial intelligence (AI) market — including software, hardware, and services — are forecast to grow 16.4 percent year-over-year in 2021 to $327.5 billion, according to the latest worldwide market study by International Data Corporation (IDC).
Artificial Intelligence Solutions Market Development
By 2024, the market is expected to break the $500 billion mark with a five-year compound annual growth rate (CAGR) of 17.5 percent and total global revenues reaching $554.3 billion.
Among the three technology categories, software represented 88 percent of the total AI market revenues in 2020. However, it is the slowest growing category with a five-year CAGR of 17.3 percent.
Within the AI software category, AI Applications took the largest share of revenue at 50 percent in 2020. In terms of growth, the AI Software Platforms market is forecast to be the strongest with a five-year CAGR of 32.7 percent.
The slowest will be AI System Infrastructure Software with a five-year CAGR of 13.7 percent while accounting for roughly 36 percent of AI software revenues. Within the AI Applications market, AI ERM is expected to grow slightly stronger than AI CRM over the next five years.
“The global pandemic has pushed AI to the top of the corporate agenda, empowering business resilience and relevance,” said Ritu Jyoti, vice president at IDC. “AI is becoming ubiquitous across all the functional areas of a business. Advancements in Machine Learning, Conversational AI, and Computer Vision AI are at the forefront of AI software innovations, architecting converged business and IT process optimizations, predictions and recommendations, and enabling transformative customer and employee experiences.”
The AI Services category grew slower than the overall AI market with 13 percent annual revenue growth in 2020. However, it is forecast to grow 17.4 percent year over year in 2021, outperforming the overall AI market by approximately 1 percent.
Its five-year CAGR is expected to be 18.4 percent with revenues reaching $37.9 billion by 2024. This technology category breaks down into two market segments: IT Services and Business Services. IT Services is the larger of the two, accounting for nearly 80 percent of all AI Services revenues.
From a growth perspective, IT Services for AI tends to grow faster than Business Services for AI except for 2024, where Business Services for AI is forecast to perform slightly higher than both IT Services for AI and the overall AI Services market.
Though the pandemic interrupted the momentum of worldwide AI services market growth, enterprise demand for AI capabilities to support business resiliency and augment human productivity sustained double-digit expansion in 2020, even as other discretionary projects experienced delays.
According to the IDC assessment, client demand for technical expertise to develop, implement, and manage AI applications drives IT services expansion, while increasing adoption of AI-enabled automation within business processes boosts spending on business services.
Overall, the competitive landscape in both IT services markets for AI is a highly fragmented one where players from across the services value chain continue to invest in technology assets, innovation resources, and expertise in applying AI to solve industry- and domain-specific problems for clients.
Artificial Intelligence Infrastructure Market Growth
The AI hardware market is the smallest category with approximately a 5 percent share of overall AI revenues in 2020. The share is forecast to increase slightly in 2021 at the expense of AI software.
The AI server market grew faster than the AI storage market in 2020, but these results are expected to reverse in 2021 when AI storage is forecast to grow 31.8 percent year-over-year compared to 26.4 percent for the AI server market.
By 2024, AI hardware is forecast to be a $30.5 billion market with AI Servers representing an 82 percent revenue share. The AI server and storage markets continue to see rapid growth, providing an increasingly specialized and innovative infrastructure foundation under the entire AI landscape.
While the number of vendor companies tracked in each market is the same, the competitive landscape of the AI server market is more fragmented than the AI storage market, where the top 3 companies accounted for 49 percent market share in 1H 2020.
Originally published at https://blog.geoactivegroup.com.