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The Artificial Intelligence (AI) Market size is estimated to grow at a CAGR of 22.26% between 2022 and 2027. The size of the market is forecast to increase by USD 125.3 billion. The growth of the market depends on several factors, including the prevention of fraud and Malicious attacks, chatbots in AI, and increased employee productivity. The shortage of AI experts is a major challenge in the artificial intelligence (AI) market.
This Artificial Intelligence market report extensively covers market segmentation by component (software, hardware, and services), end-user (retail, banking, manufacturing, healthcare, and others), and geography (North America, Europe, APAC, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The prevention of fraud and Malicious attacks is notably driving AI sector growth. In recent years, the cybersecurity industry has seen an increase in fraud and Malicious attacks, from stealing personal information to important organizational data. Companies want to apply artificial intelligence technologies to combat these threats more effectively. Artificial intelligence technology helps identify threats, identify patterns, and reduce response time. It also helps combat threats such as Distributed Denial of Service (DDoS) attacks.
For instance, Indian food technology company Zomato was the victim of a security breach that resulted in the loss of data of 17 million users. Organizations must protect internal and user data against these digital security threats. Cyber attacks can be predicted by monitoring cyber threats through cyber security analytics. Cyber security analytics uses big data to provide predictive analysis of how and when cyber attacks occur. Network performance can be analyzed by comparing data samples using predictive analytics algorithms.
The emergence of narrow AI is the key trend in the artificial intelligence ai market. Narrow AI, also called weak AI, is the application of artificial intelligence technologies that allow a system to imitate human intelligence for a specific purpose. An example of narrow AI is Siri. Apple designed Siri to be used on its iPhone/iPad devices for specific tasks, such as setting reminders or answering simple questions. Despite her technological advances, Siri lacks true intelligence or self-awareness.
Another example of narrow artificial intelligence is the IBM Watson supercomputer. IBM Watson applies machine learning and natural language processing to answer questions. Watson became famous after defeating a human contestant on the game show Jeopardy. Software that uses techniques such as natural language processing, machine learning, and pattern recognition to make autonomous decisions about specific problems can be considered narrow artificial intelligence.
In general, the algorithm needs to be retrained or modified to apply narrow AI to different domains. General algorithms that can be applied to many problems are still a few years away.
A shortage of AI experts is the major challenge impeding AI sector growth. Most companies lack the expertise and resources to fully utilize AI. Machine learning and deep learning applications require access to large data sets and dedicated infrastructure and processing power. Tasks require a dedicated team of AI experts. Artificial intelligence experts are hard to come by, as there is fierce competition among top tech companies to hire the best talent.
Companies must also look at the appropriate use cases for implementing AI/ML algorithms before implementing them at scale. All of this requires large investments, making AI out of reach for most businesses and difficult to exploit. The lack of experts slows down the development of strong artificial intelligence technology. So that's one of the potential challenges that can hamper the artificial intelligence ai market growth during the forecast period.
The AI sector share growth by the software segment will be significant during the forecast period. AI software enables developers to create intelligent applications, whether they want to improve existing applications using machine learning or speech recognition, or develop entirely new applications using an AI platform. These programming tools, which support users in building deep machine and programming learning skills, are often algorithms, libraries, frameworks, or software stacks. This feature of the development tools is considered an important item and the use of artificial intelligence in the software is expected to be mandatory. Adopting AI developer tools will help the software industry move closer to this standard.
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The software segment was valued at USD 19.63 billion in 2017 and continue to grow by 2023. AI software should improve the employee experience and provide employees with efficient automated solutions to manual tasks. Thanks to artificial intelligence software, companies can operate more efficiently and make better decisions. Software engineers can create solutions that help workers in many industries, including businesses, by using artificial intelligence software that empowers them to take necessary actions. Increasing reliance on AI software is likely to drive the growth of the artificial intelligence market size during the forecast period.
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North America is estimated to contribute 56% to the growth of the global artificial intelligence market share during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the AI sector during the forecast period.
The United States leads the North American region in AI investment. As the investment and business communities deepen their knowledge of AI, the investment and financing market of AI will become more rational as investment and financing frequency decreases and investment volumes increase. Especially after rounds of intra-industry competition, technology companies and applied application fields such as healthcare, education, and autonomous driving startups continue to favor leading AI institutions. Most of the companies investing heavily in AI are located outside the United States. Big tech giants like Google LLC, IBM, Microsoft, and Amazon Web Services, Inc. are headquartered in the United States. They also invest heavily in AI R&D services. These investments in AI tech will facilitate market growth in the region.
The restrictions due to the COVID-19 pandemic have had a devastating impact on the economy of the region as well as on large companies and SMEs. However, small businesses in the retail sector and e-commerce have become increasingly dependent on AI due to its significant potential, which in turn is expected to drive AI market growth in the region during the forecast period time period.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the AI sector.
Tesla - The company's AI-driven approach for vision and planning, coupled with optimized use of inference hardware, is the sole means to attain a comprehensive solution for full self-driving and beyond, which are the core offerings under its AI segment. Additionally, its automotive segment encompasses various services such as non-warranty after-sales vehicle services, used vehicle sales, retail merchandise, sales from acquired subsidiaries to external customers, and revenue generated from vehicle insurance.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The report forecasts AI market growth by revenue at global, regional & country levels and provides Artificial Intelligence market analysis of the latest trends and growth opportunities from 2017 to 2027.
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Artificial Intelligence (AI) Market Scope |
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Report Coverage |
Details |
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Page number |
179 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 22.26% |
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Market growth 2023-2027 |
USD 125.3 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
20.48 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 56% |
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Key countries |
US, China, Germany, UK, and France |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Advanced Micro Devices Inc., Alphabet Inc., Amazon Web Services Inc., Apple Inc., Argo AI LLC, Baidu Inc., China Cambrian Technology Co. Ltd., CognitiveScale, DataDirect Networks Inc., Graphcore Ltd., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., Microsoft Corp., Nuance Communications Inc., NVIDIA Corp., Oracle Corp., Qualcomm Inc., Tesla Inc., and Wipro Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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