Artificial Intelligence

Global AI Industry Outlook

• The worldwide AI software market is forecasted to be $63.4 billion in 2022. The market is predicted to grow at a CAGR of about 15.2 percent between 2021 and 2024

• Machine learning, natural language processing, and analytics are the most widely adopted AI technologies

AI: Market Overview

• The demand for artificial intelligence software is increasing with improved buyer maturity and supplier innovation capabilities. Enterprises are focused on driving digital transformation initiatives with artificial intelligence and cloud services at the forefront

• The global AI software market is forecasted to grow at a CAGR of about 15.2 percent for 2021–2024. The market is forecasted to be $63.4 billion in 2022

• Currently, North America has the highest adoption of AI, also, the largest revenue share in the global market, i.e., 36 percent (approx.). The US and China are the leading countries driving innovation in artificial intelligence and higher market adoption

• Globally, enterprises are prioritizing phased deployment of artificial intelligence and other digital services, to meet IT transformation objectives

• Investments toward artificial intelligence solutions are forecasted to increase, despite inflationary pressures on global IT budgets

• Suppliers are actively engaging in providing digital training to equip skilled resources. Currently, availability of skilled artificial intelligence resources is lower compared to the growing enterprise demand for AI services

Artificial Intelligence Market Outlook 

• Development of innovative AI-based enterprise applications is driving the adoption of AI software and services. 71 percent of global AI spend is attributed to AI-based software and services

• Adoption of AI solutions by the retail and BFSI industries is high, to automate operational processes and improve front-end customer services

• Healthcare and life sciences institutions have increased the spend on artificial intelligence-driven research, drug discovery, increased patient care, and operational processes

Global AI: Industry Trends

• NLP and ML are major AI technologies, which are shaping the AI market space. Robotics, vision, and speech are also contributing significantly toward the artificial intelligence industry's growth

• Many start-up companies are entering the market, with new ideas and innovations, in the field of ML, vision, speech, and autonomous cars

Regional Market Outlook on Artificial Intelligence

North America

• The North American AI market is expected to grow at a CAGR of about 14–16 percent from 2021 to 2024

• The US AI market is highly fragmented, with a presence of a huge number of start-ups in the country, however, the market is expected to undergo consolidation in the coming years, with tech giants, such as Apple, Google, Microsoft, Intel, Amazon, IBM, etc. thrusting on inorganic expansion in the country’s AI market

• Growing trend of integration of video surveillance with AI for video analysis, coupled with rising government spending on cyber security solutions, integrated with real-time analytics and AI, is expected to boost the AI market in the US over the next five years

• North America is facing strong demand for skilled AI professionals in the banking and financial services industry, due to higher adoption of the technology

Europe

• The European AI market is expected to grow at a CAGR of about 13–15 percent from 2021 to 2024

• The Russia–Ukraine conflict has led to an increase in the cost of cloud services, due to oil/gas crisis and subsequent increase in data center operational costs

• The ML segment continues to contribute to majority of the revenue share of the European AI market, and it would continue to be a dominant market until 2022 and is expected to grow at a CAGR of approx. 40 percent

• Germany has the major revenue share of the European AI market, with a Y-o-Y increase of ~40 percent

• Robotics, manufacturing, and healthcare are the major end-user industries implementing AI

APAC

• The APAC AI market is expected to grow at a CAGR of about 15–19 percent from 2021 to 2024

• China is a world leader in artificial intelligence solutions and is competing with the United States. Adoption of the technology is high across enterprises and government units in China

• The government & defense segment contributes to the largest share of the APAC AI market

• India has developed a national strategy for artificial intelligence solutions, to increase AI market maturity and adoption in healthcare, agriculture, education, transportation, smart cities, and infrastructure industries

Global AI: Drivers and Constraints

Drivers

Re-prioritization of IT Strategies

• Globally, enterprises are investing toward digital transformation initiatives and developing strategies for adoption of artificial intelligence solutions to aid operational efficiencies and customer experience

AI Analytics Potential

• With increased buyer and market maturity, the application of artificial intelligence analytics tools for enterprises/business is significant. Data-driven AI insights, identification of trends, and automation of processes enable enterprises to have a competitive edge over others in the industry

AI-assisted Supply Chains

• In the current global scenario, where supply chains are stretched and disrupted, artificial intelligence solutions are increasingly being leveraged for effective supply-demand forecasting, and early identification of potential risks.

Constraints

Digital Skill Gap

• Technology industry leaders are increasingly investing toward introducing programs to support digital skill development across educational institutions globally. Investment toward reskilling of employees is also increasing, to bridge the digital skill gap caused by high demand for AI

Macro-economic Pressures

• The Russia–Ukraine war crisis, global inflation, and increase in cost of input resources may impact enterprise IT budgets in the short to medium term

AI: Industry Applications

• Video analytics in retail integrated with surveillance cameras provides situational awareness of business operations, delivering insights about risk, safety, and security.

• Speech recognition technologies integrated into call centers automate the identification of callers.

• Personal assistants on consumer smartphones provide guidance and services using natural language and enhanced search using individual verbal communication.

• Automated approval or credit decision. Such capabilities can deliver accurate decisions in a fraction of the time compared to manual decision making.

• In healthcare, cognitive analytics enables better treatment and analysis for patients with potential abnormalities.

• In legal research, cognitive expert systems aid in accessing millions of data sources, synthesize information and present it as a user-dashboard.

• Software tools and personal agents can understand user work patterns and thereby enhance productivity. E.g., Mailbox and Calendar sorting by user preference.

AI: Major Market Developments

Healthcare

• Patient diagnosis using their baseline health data 

• Early identification of pandemic, epidemic, and endemic diseases

• Imaging diagnostics (radiology, pathology)

• Medical insurance and claims scheduling

• Medical data-driven diagnostics and virtual drug development

• Deployment of robot doctors in patient diagnosis and treatment

Automotives

• Autonomous fleets for ride-sharing, 

• Driver assist, engine monitoring and predictive maintenance 

• Automated driver assistance systems (e.g., parking assistance, lane correction, and centering, adaptive cruise control, etc.).

• Just-in-time/on-demand parts manufacturing and maintenance

Finance

• Customized financial planning and assistance 

• Fraud detection and anti-money laundering 

• Automation of banking processes, i.e., back office, customer-facing roles, etc.

• Automated insurance underwriting

Implementation Framework for AI

• Presently, enterprises are adopting innovative approaches to their IT infrastructure for gaining maximum benefits from cognitive computing implementation.

• Enterprises are integrating their existing traditional systems/architecture into dynamic, open standard-based infrastructure with the inclusion of cloud
  (public/private/hybrid) as the fundamental component.