The global artificial intelligence (AI) market is projected to grow at a CAGR of more than 32% during the forecast period of 2022-2028. The market growth is attributed to the increasing government initiatives coupled with the rising investment in the AI landscape. The expanding use of AI in various industry verticals has drawn government attention and hence resulted in increasing initiatives and investments.
For instance, in 2022, The National Security Commission on AI (NSCAI) announced to increase in spending on basic research and development, to make the US remain AI-ready. NSCAI announced to double federal R&D spending for AI each year until it reached US$ 32 billion in 2026. Such favorable support by the government significantly creates ample opportunities for the global artificial intelligence market growth.
Further, the cost benefits from automation, advancement in deep learning leading to diverse use cases across industries, and increasing adoption of IoT technology in everyday life which is fueling the growth of the AI market globally. AI has gained popularity across industries such as marketing, sales, manufacturing, business management, BFSI, and others. It enables the user to boost efficiency without impacting its quality resulting in lower costs, better time management, and lesser supervisory requirements.
Further, AI is now being used in complex healthcare processes such as surgeries. Robots have now been performing complex medical surgeries with the help of AI which has proved to be quite a successful endeavor as they are less likely to commit errors and can calculate the potential decision that has to be taken in relevance to a given situation quickly. Moreover, the retail sector is employing AI at a large scale to boost customer experience and understand customer preferences better, resulting in better demand forecasting and inventory optimization which has been a boon to this sector.
Highest spending on AI to be incurred by the financial sector
The financial sector is expected to be one of the prominent end users of AI. AI is utilized in the BFSI sector in various ways, such as chat box powered by language processing for better customer service and as a financial guide for managing personal finance for customers. The most significant use case of AI is in recognizing fraud detection and preventing cyber-attacks.
Consumers look for banks which can provide security of their funds, especially in online transactions. AI has the ability to single-out irregularities which would otherwise go unnoticed by humans. JP Morgan implemented these fraud-detecting algorithmic solutions to secure their customer accounts as consumer banking generates 50% of its revenues.
Many banking institutions have invested in AI for better insights and improved business decisions. For instance, in November 2021, H2O.ai, the AI cloud company, has closed US$ 100 million in Series E fund led by Australia’s largest bank, Commonwealth Bank of Australia (CBA). With the investment in and strategic partnership with H2O.ai, CBA aimed at extending its leadership in AI and ultimately boost its ability to offer digital propositions and reimagine products and services to customers.
North America dominates the AI market while the Asia Pacific is projected to grow significantly
Geographically, North America is dominating the global artificial intelligence market, primarily led by the United States which is expected to deliver over one-third of all AI spending in the forecast period. The presence of leading players such as IBM Corp., Amazon, Oracle, and others; increasing investment in the AI industry, growing adoption of AI in various verticals, and increasing government initiatives are some of the major factors driving the regional growth of the market. In February 2019, the US government launched the American AI Initiative as the nation’s strategy for promoting leadership in AI.
Moreover, the presence of a well-established IT infrastructure in the region further gives a boost to the regional growth of the market. Moreover, in the Asia Pacific, China is expected to lead the market on the back of increased AI spending with state/local government, banking, and professional services as the leading adopters. The strongest spending growth over the forecast period will be in Japan as it is at the forefront in the hardware sector and production of AI-enabled robots and manufacturing processes.
Market Structure and Competition Landscape
The market is fragmented in nature with the presence of various players operating in the market. Some of the prominent players that contribute significantly to the market include IBM Corp., Intel Corp., Google LLC, Microsoft Corp., Cisco Systems Inc., Oracle Corp., SAP SE, Meta, Salesforce Inc., Amazon.com Inc., Apple Inc., Nvidia Corp., Palantir Technologies Inc., C3.ai Inc., Micron Technology Inc., and others.
These players adopt various strategies in order to reinforce their market share and gain a competitive edge over other rivals in the market. Mergers and acquisitions, product launches, partnerships and collaborations, and geographical expansions some of the strategies adopted to strengthen their market presence.
- In August 2022, Amazon has entered into a definitive merger agreement under which Amazon will acquire iRobot. iRobot builds innovative cleaning products for the home making lives of household easier. The deal has been valued near about US$ 1.7 billion.
- In June 2022, Salesforce announced to expand its financial services offerings built specifically for banking, wealth management, and insurance institutions. Salesforce for financial services will now offer more targeted and trusted automation and AI powered by Client 360.
Key Market Segmentation
RationalStat has segmented the global artificial intelligence market on the basis of component, technology, organization type, end user, and region.
- By Component
- By Technology
- Natural Language Processing (NLP)
- Image Processing
- Machine Learning (ML)
- Speech Recognition
- Others (Robotic Process Automation, Computer Vision)
- By Organization Type
- Large Enterprise
- Public Administration
- By End User
- Automobile & Transportation
- Retail & Warehousing
- Banking, Financial Services & Insurance (BFSI)
- Media & Entertainment
- IT & Telecom
- Others (Construction, Legal, Education, Energy & Power etc.)
- By Region
- North America
- Latin America
- Rest of Latin America
- Western Europe
- Rest of western Europe
- Eastern Europe
- Rest of Eastern Europe
- Asia Pacific
- South Korea
- ASEAN (Indonesia, Vietnam, Malaysia, etc.)
- Middle East & Africa
- South Africa
- Rest of the Middle East & Africa
- North America
RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.
RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:
- Defining the problem by understanding the type of market and data required by the client.
- Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
- Formulating a hypothesis to create market numbers, forecast, influencing factors, and their relevance.
- Evaluating and analyzing the data by referring to data sources utilized and leveraged.
- Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.
- Annual reports, company filings, investor presentations, product catalogs, and company documents
- Industry and market-related documents available in the public domain
- Paid database including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, and Thomson Reuters, among others
- Whitepapers, research papers, and industry blogs.
Why Buy this Report?
The report is intended for AI solution providers, government organizations, educational organizations, regulatory agencies, and market research firms, among others. The report provides an in-depth analysis of market size, consumption patterns, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.
Frequently Asked Questions (FAQs)
The AI market is expected to grow at a CAGR of approximately 32% during the forecast period 2022-2028.
North America holds a prominent share of the global AI market.
The global market for AI was US$ 330 Billion in 2021.
The growing adoption of IoT technology and the increasing initiative are the key trends to influence the growth of the global AI market.
Major companies operating in the global AI market are IBM Corp., Intel Corp., Google LLC, Microsoft Corp., Cisco Systems Inc., Oracle Corp., SAP SE, Meta, Salesforce Inc., Amazon Inc., Apple Inc., Nvidia Corp., Palantir Technologies Inc., C3.ai Inc., Micron Technology Inc., and others.