AI markets taking off with forecast for strong revenue growth

AI markets taking off with forecast for strong revenue growth

Worldwide revenues for the artificial intelligence (AI) market, including software, hardware, and services, is estimated to grow 15.2% year over year in 2021 to USD 341.8 billion. Next year, it is expected to grow 18.8% and by 2024, it will reach USD 500 billion, according to IT consultancy International Data Corporation´s (IDC) artificial intelligence tracker.

AI Software represent 88% of the overall AI market but AI Hardware is estimated to grow the fastest in the next several years. From 2023 onwards, AI Services is forecast to become the fastest growing category.

Within the AI Software category, AI Applications represent close to 50% of revenues. In terms of growth, AI Platforms is the strongest with a five-year compound annual growth rate (CAGR) of 33.2%.

The slowest will be AI System Infrastructure Software with a five-year CAGR of 14.4% while accounting for roughly 35% of all AI Software revenues. Within the AI Applications market, AI ERM (Enterprise Risk Management) is expected to grow slightly stronger than AI CRM (Customer Relations Management) over the next five years. AI Lifecycle Software is forecast to grow the fastest among the markets within AI Platforms.

The AI Services market was estimated at USD 19.4 billion in 2020, representing the fastest growth relative to hardware and software. For 2021, it is forecast to grow at 19.3%.

Client demand for expertise in developing production-grade AI solutions and establishing the right organization, platform, governance, business process, and talent strategies to ensure sustainable AI adoption at scale drives expansion across both IT services and business services segments”, said IDC´s research manager, Jennifer Hamel.

Under IT Services for AI, the Top 3 companies in 2020 were IBM, Accenture, and Tata Consultancy Services. Each of the three companies achieved over USD 1 billion in revenues and combined for a total of 26% market share.

The Top 3 companies in Business Services for AI in 2020 were Ernst & Young, Accenture, and Deloitte, accounting for a combined share of 46%.

In AI Server market, there were a total of six companies that generated over USD 500 million each in 2020; they are (in alphabetical order) Dell, HPE, Huawei, IBM, Inspur, and Lenovo. Together, they held 62% of overall market share.

In the AI Storage market, there were also six companies that achieved over USD 100 million each in 2020; they are (in alphabetical order) Dell, HPE, Hitachi, Huawei, IBM, and NetApp. These six companies had a combined market share of 68%.

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