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5th February 2018

AI software market to reach $90bn in annual worldwide revenue by 2025

A report from technology analyst firm Tractica predicts a 28-fold increase in worldwide AI software revenue by 2025.


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Compared to just a few years ago, the artificial intelligence (AI) market is starting to solidify around real-world applications. The pace of change is now faster than ever before, as startups and technology providers rush to create platforms and targeted niche solutions.

According to a report from Tractica, the rising tide of AI adoption across multiple industries will drive major growth during the next decade. The market intelligence firm predicts that annual global AI software revenue will grow from $3.2 billion in 2016 to $89.8 billion by 2025, a 28-fold increase. This forecast is significantly higher than their previous projection for AI market revenue published in Q2 2017, due to an improved outlook for a number of specific use cases across multiple industries.

“Artificial intelligence is already key to how consumer Internet companies operate today – allowing them to roll out hyper-personalised services by following an ‘AI first’ strategy,” explains Aditya Kaul, a research director at Tractica. “The rest of the market in the enterprise and government sectors is still catching up on adopting AI and has yet to fully understand its value, including the breadth and depth of use cases, the technology choices surrounding AI, and the implementation strategies.”

However, adds Kaul, this gap will close quickly in the years ahead – the consumer sector’s share of total AI revenue will shrink from 26% in 2016 to 8% by 2025, even as its revenue in terms of absolute dollars increases more than seven-fold during the same period. Tractica’s analysis indicates that this trend will be driven by surging enterprise adoption of AI systems, which will outpace the growth of the consumer market.

In sizing and forecasting the total global AI market, Tractica has created a taxonomy of 266 real-world use cases for AI, distributed across 29 industry sectors and corresponding with six major technology categories – computer vision, deep learning, machine learning, machine reasoning, natural language processing (NLP) and strong AI – plus multiple combinations of technologies. The use cases are spread across three major meta categories: vision, language and analytics.

While analytics is a major driver, Tractica’s analysis shows that deep learning-based human perception based on vision and language will be a bigger driver for AI in the long term.



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