After Pause, AI Software Market Expected to Soar
The upward advance of the global AI software market is forecast to rise between its current $16.4 billion level to as high as nearly $100 billion by 2025 as industry sectors like health care step up their rate of adoption.
While the novel coronavirus has prompted some downward revisions in the otherwise vibrant AI software market predictions, analyst Omdia issued a forecast range over the next five years from just under $60 billion to as high as about $130 billion. It’s “moderate” forecast totaling $98.8 billion represents a 22-percent downward revision from its pre-COVID forecasts of the cumulative market size through 2025.
The market tracker said its revised forecast accounts for pandemic-driven “retrenchment” in sectors like oil and gas as well as mining. Those declines flattened the AI software growth curve, with health care and the rise of remote work and education perhaps making up the difference in more optimistic scenarios.
Then there is the first-mover advantage, which Omdia said has widened the gap between aggressive and reluctant AI deployers.
“Economic effects from the COVID-19 pandemic have widened the dichotomy between early AI adopters—the ‘AI haves’—and the trailing followers—the “AI have nots’,” said Omdia senior analyst, Neil Dunay. “Industries that have pioneered AI deployments and have the largest AI investments are likely to continue to invest in what they view as proven, indispensable technology for cost cutting, revenue generation and enhancing customer experience.”
Omdia said it attempted to differentiate between AI hype and reality by identifying no less than 340 potential AI use cases across 23 industry sectors. Key applications driving the global AI software market include voice and speech recognition, video surveillance, virtual digital assistants for customer service and product marketing as well as IT monitoring and supply chain and inventory management.
Pre-pandemic, market forecasters were betting data analytics would continue as the main driver for AI, but some have concluded that deep learning-based vision and language applications will propel the AI software market over the long haul.
Dissected differently, IDC Corp. said last month the narrower AI software platform sector would slow through 2021, then accelerate “significantly” through 2024. It expects the platform segment to grow at an annual compound rate of 31.1 percent through 2024, reaching $13.4 billion in global revenues.
"Software and applications vendors are taking advantage of advanced machine learning, conversational AI, and other AI technologies to provide benefits for their customers and users as well as improve ROI and achieve cost savings,” said David Schubmehl, research director for IDC's AI software platforms practice.
The market tracker foresees “the emergence of a healthy AI software platforms market being fueled by startups and enterprise software vendors as well as a robust open source community contributing new algorithms, libraries, models and tools,” Schubmehl added.