Global Artificial Intelligence Market By Solution (Hardware, Software, and Services), By Technology (Deep Learning, Machine Learning, NLP), By End-Use, By Region, Segment Outlook and Forecast 2023-2032

Report Overview

The global Artificial Intelligence market size was valued to be worth USD 129.28 billion in 2022. From 2023 to 2032, it is estimated to reach USD 2745 billion growing at a CAGR of 36.8%.

Artificial intelligence, or AI for short, is a field of computer science. It strives to create machines capable of performing tasks, which normally only human intelligence can do. This technology has now become an invaluable resource in many different sectors. Thanks to its data-driven decision-making made based on patterns and understanding. AI has been predominantly praised due to its ability for self-learning and improvement.

The development of sophisticated algorithms has helped Artificial Intelligence Market to reach greater heights. One can observe this while analyzing large amounts of data, making predictions, and detecting patterns. Early adoption of these innovations can provide a significant competitive advantage. It can also assist to reduce doubts related to the fragility of the AI model.

For Instance, In May 2020, OpenAI unveiled GPT-3, its AI tool which is capable of producing humanlike text and programming code. Named ChatGPT, it allows the user to type natural-language prompts. ChatGPT then provides conversational responses. These responses are based on its understanding of the user’s dialogue with previous questions and answers. It draws its answers from vast amounts of internet data.

This tool has left a deep impact on the tech world. In January, Microsoft announced an investment of billions of dollars into OpenAI research. Microsoft unveiled their upgrade to search engine Bing and browser Edge. This modified version is now incorporating OpenAI’s ChatGPT technology.

Thanks to innovations like these the artificial intelligence (AI) market is on the rise. Companies across a variety of industries are investing in this cutting-edge technology. artificial intelligence applications ranging from healthcare and finance to retail and manufacturing.

One major driver of the Artificial Intelligence Market is its capacity to enhance efficiency and accuracy. This helps businesses achieve higher productivity and profitability. For instance, AI-powered chatbots can assist customer service teams in handling more requests quickly.

The Artificial Intelligence Market growth can be attributed to the vast investments and collaborations made. This leads to new technologies like autonomous vehicles, robotics, and quantum computing. Along with that favorable government initiatives are also contributing to positive market growth.

But, there are ethical concerns about AI, including privacy violations, bias, and job displacement. Therefore, responsible AI that is transparent, explainable, and accountable is increasingly emphasized.

Thus companies can access the power of machine learning, natural language processing, computer vision, and other advanced AI technologies. These capabilities offer businesses insight, automate processes and improve customer experiences. From fraud detection and predictive maintenance to personalized marketing and chatbots. This has expanded the Artificial Intelligence Market size.

Driving Factors

Next-generation computing architecture is the main driving factor

Deep learning usually requires exceptional computing power, making AI an ideal application for GPUs. Implementing neural networks on GPU-based systems enhances the training process significantly. When compared to traditional CPU architecture it saves valuable money and time in the process. This has been one of the main reasons for the Artificial Intelligence Market growth.

Nvidia was one of the first companies to utilize GPUs for AI; their latest TITAN V PC GPU is optimized for deep learning on desktop platforms. Nvidia held a 72.8% market share in discrete GPU sales in Q3, 2017.

FGPA is trending thanks to its varied benefits

The next innovation trending in the AI market comes in the form of a Field Programmable Gate Array or FPGA. These processors are customizable and programmable for specific types of workloads. A major benefit offered by FPGAs for AI applications lies in their application of deep neural networks. They can analyze large amounts of data easily.

Intel is using FPGAs for deep data problems, with their FPGAs having already proven competitive to GPUs earlier this year. Now Intel is in a fierce battle with AMD/Xilinx for more of the FPGA market share.

Open Data to be an invaluable asset to the public

In the digital era, open data has become an invaluable asset for the advancement of Artificial Intelligence (AI) technologies.  Large volumes of open data are now being made accessible to everyone.  Many government agencies, nonprofits, and for-profit businesses are actively adopting open data. This makes it one of the main driving factors of the Artificial Intelligence Market.

Governments are now providing individuals and businesses with access to open data sets. This data was previously inaccessible or unavailable. The UK Government has now made available over 8,000 unique datasets through data.gov.uk and affiliated websites like data.london.gov.uk.

It is difficult for Artificial intelligence algorithms to make accurate predictions without having access to huge amounts high-quality of data. This is why organizations around the world are investing in creating and releasing open data sets.

Goldcorp, Boehringer Ingelheim, and Dunhumby are companies that have implemented open innovation successfully. While competitive websites such as Kaggle.com and Innocentive.com will continue to gain in popularity in the years ahead.

Restraining Factors

Cybercriminals Can Exploit the AI System

Artificial Intelligence Market holds great potential to provide solutions for humanity. Despite this, from a cybersecurity standpoint, it can be both beneficial and detrimental. Crafting effective cybersecurity policies takes ample time and resources.

There is a vast amount of complex data required by artificial intelligence and machine learning systems. To tackle these issues there are multiple ways in which these systems can be leveraged.

One of the greatest risks is mishandling data, which can occur either intentionally or accidentally. Malicious actors may intentionally target AI systems to steal sensitive information for personal gain or conduct illicit activities. On the other hand, accidental leaks may take place due to human error or technical malfunction. This can result in inadvertent exposure to sensitive information.

Defensive technology is falling behind. Which could mean that attackers could potentially gain the upper hand soon enough. There is still a long way to find a solution to these problems as companies are still in the experimenting stage.

Intellectual property’s ethical implications in AI can be an obstacle

AI has now the capacity to create poetry, artwork, 3D printing, and inventions without human input. Thus questions are now being raised regarding ownership. The main problem key players face is whether traditional intellectual property (IP) protections are enough. They may or may not be suitable to safeguard an AI and its byproducts.

Only a few inventions related to software programs are patentable in some jurisdictions. Recently, the Australian High Court denied Dr. Stephen Thaler’s application for special leave. It was made to appeal the Full Federal Court’s 2022 ruling that only humans can be inventors under Australian patent law.

To regulate innovation created solely by artificial intelligence machines; proper rules related to IP must be amended. The regulatory dilemma surrounding artificial intelligence must be resolved. All countries must create legislation drafting remedies and each country’s regulatory framework. This is the only way to resolve disputes related to Intellectual Property rights associated with AI.

COVID-19 Impact Analysis

Due to the COVID-19 pandemic, AI adoption and implementation are globally on the rise. Artificial Intelligence Market dependence is rising in businesses requiring real-time responsiveness to market demands. This is necessary for major players to stay competitive and relevant. APAC region companies are observing high success with the influx of this technology. This trend can be particularly observed during the COVID-19 pandemic.

The global COVID-19 pandemic has caused devastating aftereffects. Despite this various industries have seen an uptick in the use of AI, particularly in the healthcare sector. It is being employed in the diagnosis and public health of social control, therapeutics, and vaccine development.

Governments were leveraging the power of AI through personalized services and automated processes. For Instance, Singapore’s “Ask Jamie,” is an AI-powered virtual assistant. It assists citizens and businesses navigate government services across 70 government agencies. It employs AI-powered chat and voice interactions.

Besides Healthcare, other sectors like manufacturing also embraced AI. This was done to automate tasks and reduce dependence on human labor. Data and Cloud-based solutions are now having more agility. This has been achieved as companies have upgraded from using real-time monitoring of production.

For Instance, Honeywell utilizes data and tools for faster business function and decisions, remote work opportunities, and worker safety. Siemens used AI during the pandemic to tighten its supply chains by automatically recognizing opportunities for more efficiency gains.

By Solution Type Analysis

Software solutions dominated 2022’s Artificial Intelligence Market with a share exceeding 39.3%. This growth can be attributed to various technologies and applications that use AI to increase efficiency and productivity. This segment benefits from being able to extract and present live information in real-time to assist with decision-making.

AI-enabled software applications enable businesses to automate and streamline their operations. These apps use AI for tasks like customer service, supply chain management, financial services, and forecasting.  Machine learning techniques as well as other AI technologies are employed to analyze data sets to spot patterns and trends.

Other software solutions include virtual agents, chatbots, and AI-powered cybersecurity software.  Each of these software solutions in the AI market has its own unique benefits and applications. So, businesses can choose the most appropriate option according to their industry, use case, and budget.

The Services segment will have the second fastest CAGR over the forecast period. AI services allow companies to make more profits and lower their operating costs. Artificial Intelligence, as a Service, is a way for companies to gain a competitive edge in the cloud. These services include installation, maintenance, support, and integration.

By Technology Analysis

Deep learning, the largest segment of the artificial intelligence market, had a 35.0% share of revenue in 2022.  Deep learning technology empowers machines to learn and enhance their performance. This is achieved based on experience and data.  It works well for unstructured data such as images, videos, or language.

One prominent application of the deep learning segment is autonomous vehicles. Here deep neural networks are utilized for object detection and recognition, road mapping, as well as decision-making.

For Instance, Zoox, has implemented AI technologies to enable its fully autonomous robotaxi vehicles. It learns from some of the most difficult driving scenarios enhancing their decision-making. Other self-driving car companies that utilize deep learning include Tesla-owned DeepScale and Waymo – a subsidiary of Google.

NLP is expected to grow exponentially over the forecast period. Businesses are increasingly turning towards NLP technology. They help them understand their clients, identify emerging trends, and make informed decisions.

By End-Use Analysis

Advertising and media was the largest market segment and earned a greater than 21% revenue share in 2021. The increasing popularity of artificial intelligence marketing tools is partly responsible for the high market share. For Instance, Cadbury’s January 2022 initiative allowed small businesses to use the voice and faces of celebrities to create their AD.

The healthcare segment is however expected to hold a dominant share by 2030.  In the healthcare industry, AI is used to improve patient care. It personalizes treatments and optimizes diagnoses. Robot-assisted surgery is now widely being practiced, thanks to technological advances. It helps develop new drugs. AI-powered diagnostic tools can analyze medical images faster and more accurately.

The automotive industry invests heavily in AI for self-driving cars and ADAS. These technologies have the potential to improve safety and efficiency on the roads.

Conversational AI platforms are one of the most commonly used applications in every vertical. Google LLC has launched a Rapid Response Virtual Agent to help call centers. This chatbot will help customers to resolve any problems caused by COVID-19 via voice, chat, or other social media channels.

Artificial Intelligence Key Market Segments

By Solution Type

• Hardware
• Services
• Software

By Technology

• Deep Learning
• Natural Language Processing (NLP)
• Machine Learning
• Machine Vision

By End-Use

• Manufacturing
• Healthcare
• Law
• BFSI
• Advertising & Media
• Retail
• Agriculture
• Automotive & Transportation
• Other End-Uses

Growth Opportunity

Autonomous Vehicles Driving The Future of Mobility, Thanks to AI

Artificial Intelligence industry despite being dominant in all sectors is at a prominent spot for its applications in the automotive industry. From self-driving cars for personal use to handling logistics AI is now being applied. It is used by automobile manufacturers in every stage of the production process. Industrial robots are used for putting parts together, it is also used in traffic navigation.

Companies like Tesla are already ahead of their competitors. The possibility of complete automation is to be awaited. Companies like Ford, Waymo, and Apple are bringing alternatives with more enhanced features.

For Instance, Google and Waymo collaborated to develop driverless vehicles. This model is still in a developmental stage and is predicted to deliver people from point A to B safely. It has a 360-degree perception technology which helps detect up to 300 miles away.

Deep Learning and Machine Learning to Have a Huge Impact in AI Development

Usually, machine learning and deep learning are considered to be the same. But they are two different parts of artificial intelligence. Machine learning uses structured data such as text, or images while deep learning works on unstructured data. Deep learning has had an enormous impact on recent advances. From speech recognition and vision processing to natural language processing.

While deep learning will remain popular for now, its application in future Artificial Intelligence Market breakthroughs could look different.

Machine learning has seen a rapid rise in importance across numerous industries. This leads to a heap of off-the-shelf artificial intelligence solutions. Here AutoML aims to offer an accessible and straightforward solution that doesn’t need consulting with ML experts.

For instance, AutoGluon, is an off-the-shelf solution for text, image, and tabular data. This enables developers to rapidly prototype deep learning solutions. This can also help to get predictions without needing data science experts on board.

Latest Trends

Healthcare Industry to Present Immense Opportunities

The growth of the Artificial Intelligence Market is heavily influenced by its potential in the healthcare segment. This industry is data-rich and can greatly benefit from access to large volumes of data and advances in AI techniques. This has created incredible possibilities for improving patient care. Initially, AI may not replace human brains but rather aid them by augmenting diagnoses and providing valuable insights. AI can learn and improve over time, enabling it to continuously enhance the quality of care.

For Instance, John Hopkins University developed a new system that can detect sepsis in a short time. This can decrease the chance of death and severe complications by 20%. They also used AI algorithms to detect the warning signs of delirium.

Speech-to-Text to be Trending Before and In the Foreseeable Future

Audio transcription and AI speech-to-text software have seen an immense rise in their use cases and applications. The text-to-speech was considered to be a specialized service. But now anyone with access to a smartphone and the internet can benefit from some form of speech recognition software. As enterprises and consumers alike rely on virtual assistants.  Demand for speech recognition software continues to soar.  Apple Siri, Amazon Alexa, and Google Assistant are currently used by millions of people

For Instance: Assembly AI’s Speech-to-Text API is trusted by Fortune 500s and startups. Their API is user-friendly and convenient. Audio and Video files can be transcribed with providing insights on varied topics.

Regional Analysis

North America boasted the largest artificial intelligence market share and earned a revenue share of 51.1% in 2022. This reflects their decades-long leadership in AI research and development. It has produced cutting-edge, transformative technologies that improve lives, spur innovation industries, and boost national security.

For decades, the United States has been at the forefront of AI research and development. They are making significant contributions to this field. This leadership has produced an array of cutting-edge technologies that revolutionalizes various aspects of society.

For Instance, On January 1, 2021, The National AI Initiative Act of 2020 became law. It provides a coordinated program across all Federal agencies to speed up AI research and application. This is done to gain economic prosperity and national security purposes.

Over this forecast period, the Asia Pacific market is projected to experience a robust CAGR. This is due to an impressive surge in investments made into artificial intelligence technology.

For instance, several major Asian insurers such as Prudential Singapore,  Sompo Japan, and Ping An, use machine learning technology. These systems can learn and adjust their behavior based on the information received. This enables them to automatically assess claims and manage fraud.

China, Singapore, and South Korea have invested heavily in creating AI ecosystems. Here AI-driven companies and their innovative business models can thrive and develop. In Indonesia, Malaysia, and Thailand, numerous public-private initiatives have taken shape. It facilitates experimental uses of AI that go beyond for-profit applications.

Startup culture in Asian countries is rapidly developing, particularly in China and India. This growth has fueled the development of the Artificial Intelligence Market. India’s growing economy and population offer even greater potential for AI adoption.

E-commerce sites like Tokopedia and Alibaba face rising consumer expectations. Amazon’s impressive seamlessness and responsiveness are major reasons for this. Hence these marketplaces rely heavily on AI technology to predict demand. They also now using AI to manage their smart warehouses and dispatch goods efficiently.

Key Regions and Countries

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Spain
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Rest of Asia-Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• MEA
  • GCC
  • South Africa
  • Israel
  • Rest of MEA

Market Share & Key Players Analysis

Companies that fail to capitalize on the growing demand for AI-driven solutions across industries could find themselves left behind in their pursuit of market share.

To meet this challenge, AI vendors are employing various strategies to expand their customer base. One key approach involves crafting AI solutions tailored specifically for specific industries or use cases.

Another strategy used is expanding into new markets and geographies. With AI adoption on the rise in emerging markets, vendors are increasingly targeting regions like Asia, Africa, and Latin America to access new sources of demand and establish a presence in regions expected to experience rapid growth. By entering these emerging markets, vendors gain access to lucrative new supply sources.

Top Key Players in AI Market

• Advanced Micro Devices
• AiCure
• IBM
• Oracle Corporation
• Amazon Web Services
• Cisco Systems Inc.
• Arm Limited
• Atomwise, Inc.
• Ayasdi AI LLC
• Baidu, Inc.
• Clarifai, Inc
• HyperVerge, Inc.
• Intel Corporation
• Microsoft
• Google
• Baidu, Inc.
• NVIDIA Corporation
• Other Key Players

Recent Developments

Mentioned below are some of the latest developments by major tech giants in the Artificial Intelligence Market:

• The U.S. Army is now adopting the latest tech like AI to train its workforce and create predictive AI models. It collaborated with the Institute for Defense Analysis on the Retention Prediction Model – Army (RPM-A). It generates an individual prediction vector for retention for every Active Army member.
• On Feb 23, Amazon.com Inc’s cloud unit announced a collaboration with artificial intelligence startup Hugging Face Inc. They are developing an alternative to ChatGPT similar to every top giant recently. This partnership will enable developers to optimize their models’ performance for specific use.
• On Feb’23, US-based management consulting firm Bain & Company announced an alliance with artificial intelligence (AI) firm OpenAI. Bain will use its expertise and OpenAI’s tools to help clients worldwide capitalize on AI’s potential for business growth.
• Since May’22  IBM’s research division developed a cloud-native supercomputer called Vela. It can be quickly deployed and utilized for training foundation artificial intelligence models. It is used by dozens of IBM researchers to train models with tens of billions of parameters.
• In  April 2020, Advanced Micro Devices announced a strategic alliance, with Oxide Interactive LLC in. This partnership will allow them to develop graphics technologies that can be used in the cloud gaming market.

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