Worldwide revenues for the artificial intelligence (AI) market, including software, hardware, and services, is estimated to grow 16.4 percent in 2021 to $327.5 billion, according to International Data Corporation (IDC).
By 2024, the AI market is expected to break the $500 billion mark with a five-year compound annual growth rate (CAGR) of 17.5 percent and total revenues reaching $554.3 billion.
Software represented 88 percent of the total AI market revenues in 2020. Within the AI software category, AI Applications took the largest share of revenue at 50 percent in 2020. AI Software Platforms market is forecast to be the strongest with a five-year CAGR of 32.7 percent.
AI System Infrastructure Software will achieve 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.
“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,” Ritu Jyoti, program vice president for AI Research at IDC, said.
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.
“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,” Jennifer Hamel, research manager, Analytics and Intelligent Automation Services, IDC, said.
Under IT Services for AI, the Top 3 companies in 1H 2020 were IBM, Accenture, and Infosys. These were the only companies to bring in more than $500 million in IT Services for AI revenues and their combined share of the market was 28 percent.
Beyond the Top 3, 13 other companies generated more than $100 million each during the same period. In the Business Services for AI market, there were only four companies – Ernst & Young, PwC, Deloitte, and Booz Allen Hamilton – that generated revenues of more than $100 million in 1H 2020.