Artificial Intelligence (AI) Market Overview

“The Artificial Intelligence (AI) Market Predictable at $389 .56 billion in 2022, is estimated to increase at a CAGR of 20.57% from $425.56 billion in 2023 to $1999.48 billion by 2030.”

Definition of Artificial Intelligence (AI)

The ability of robots to carry out operations normally associated with human intellect, such as learning and problem-solving, is known as artificial intelligence (AI). Advanced web search engines, like Google Search, recommendation systems, voice recognition software, like Siri and Alexa, self-driving cars, like Waymo, generative or artistic tools, like ChatGPT and AI art, and winning at the highest levels of strategic games, like chess and go, are just a few examples of AI applications.

Machines equipped with artificial intelligence are able to mimic or even outperform human brain functions. And as generative AI tools like ChatGPT and Google's Bard proliferate and self-driving car technology advances, AI is quickly becoming a part of daily life and a field that businesses in every sector are investing in.

AI entered the mainstream in 2022 through the Generative Pre-Training Transformer, with ChatGPT by OpenAI being the most commonly used program. However, this only represents a small percentage of AI technology applications. The ideal quality of AI is the ability to reason and take actions that maximize the likelihood of reaching a specific objective. Machine learning (ML), a subtype of AI, allows computer programs to automatically learn from and adapt to new data without human assistance.

The use of AI in today's society is rapidly evolving and evolving.

AI is widely used in various applications, including recommendation algorithms, chatbots, weather and financial forecasting, production process optimization, tax accounting, and language processing. OpenAI's ChatGPT tool, released in late 2022, gained popularity with millions of users added monthly in 2023. Although considered a weak AI, it can respond creatively to various topics, making it a valuable tool in various fields. AI is also used in gaming, autonomous vehicles, and language processing. The tool's popularity is expected to continue growing in the coming years.

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Key Takeaways

The simulation or approximate replication of human intelligence in computers is referred to as artificial intelligence (AI). Artificial intelligence aims to improve learning, reasoning, and perception through computers.

AI is currently applied in a variety of sectors, including banking and healthcare.

Strong AI handles jobs that are more sophisticated and human-like, whereas weak AI typically focuses on simple, single tasks.

Some detractors worry that the widespread application of cutting-edge AI may have a detrimental impact on society.

Artificial Intelligence (AI) Market Segment Analysis

Global Artificial Intelligence (AI) Market, By Technology

The deep learning market sector held the greatest market share in 2022, according to technology. This dominance can be attributed to its sophisticated data-driven applications, including text, audio, and video recognition. The difficulties posed by the large amounts of data should be overcome by the deep learning technologies that are emerging. Additionally, during the forecast period, the growing use of deep learning technology in the medical industry is anticipated to further boost the segment's growth.

Machine learning significantly contributes to AI technology investments, influencing applications like hypothesis generation, clustering, and visualization. It encourages cognitive solutions. The growing use of on-premises hardware and cloud computing platforms has facilitated data analytics development. Major tech companies' innovation and research efforts are expected to drive the growth of the AI market in the near future.

Global Artificial Intelligence (AI) Market, By Solution

Due to the accessibility and scalability of artificial intelligence (AI) services, the services sector dominated the market in 2022 with a 38.45% share. Complex projects needing multidisciplinary skills in computer vision, natural language processing, and machine learning are handled using these services. To properly handle these challenging assignments, they offer a wide range of resources and talents.

Global Artificial Intelligence (AI) Market, End User Insights

Due to the growing usage of artificial intelligence (AI) solutions in the banking and finance industry, the BFSI segment, which held 15.46% of the market in 2022, is anticipated to enjoy considerable growth. These solutions are utilized for many different things, including loan applications, account queries, fraud detection, and credit score monitoring. This segment's growth is further fueled by the industry's large-scale daily data collection and the demand for frictionless service available around-the-clock, as AI-powered technologies deliver accurate customer service responses.

 

Market Dynamics

Growth Drivers

The fast growth in artificial intelligence technologies is causing a substantial shift in the financial sector. Algorithmic trading, fraud detection, and credit risk assessment are all made possible by the application of AI, which enables faster and more precise data analysis. Better investing and risk management decisions result from this. Large data sets can be processed by AI, which can also spot patterns and trends that human agents would overlook. In the banking industry, AI is generally increasing operational effectiveness, cutting costs, and improving client experience.

Restraint

The complexity of artificial intelligence models and algorithms makes it challenging to comprehend how decisions are made. This may result in "black box" results that undermine trust and accountability. This is particularly difficult in industries as important as finance and healthcare, where confidentiality must be protected at all costs. Issues with decision-making transparency may limit market expansion.

The black box effect, the paucity of AI talent in underdeveloped nations, and the all-at-once deployment of AI tools can all impede market expansion. In order to overcome the black box effect, which can produce incorrect results and hidden biases, businesses are providing ethical and explicable AI models. The deployment of AI faces considerable challenges due to a lack of safety and confidence. To solve this challenge, governments and businesses are also making investments in educational and research institutions. In the upcoming years, these elements are anticipated to boost the AI industry's global expansion.

Applications of Artificial Intelligence

The use of artificial intelligence (AI) is widespread across multiple fields and industries. It is utilized in healthcare for surgical procedures, identifying treatments, and recommending medicine dosages. AI-powered machines that play chess and drive themselves must think about the effects of their decisions because each one affects the outcome. AI is used in the financial sector to identify and alert fraud departments to suspicious banking activities, such as irregular debit card use and sizable account deposits. AI also facilitates trading by making it simpler to estimate the supply, demand, and price of securities. Overall, the breadth and depth of AI's applications ensure that it will continue to change numerous fields and businesses.

Competitive Landscape of the Artificial Intelligence (AI) Market

• Microsoft Corporation (U.S.)
• com, Inc. (U.S.)
• IBM Corporation (U.S.)
• Alphabet Inc. (Google LLC) (U.S.)
• com, inc. (U.S.)
• Baidu, Inc. (China)
• NVIDIA Corporation (U.S.)
• ai (U.S.)
• Oracle Corporation (U.S.)
• Hewlett Packard Enterprise Development LP (U.S.)

Recent Developments in Artificial Intelligence (AI) Market

September 9, 2023 Amazon to require some authors to disclose the use of AI material

After months of complaints from the Authors Guild and other groups, Amazon.com has started requiring writers who want to sell books through its e-book program to tell the company in advance that their work includes artificial intelligence material.

February 2023 - IBM Corporation acquired StepZen Inc, a GraphQL server development company. This server is inbuilt with a unique architecture which allows developers to build GraphQL APIs easily and with less code.

February 2023 - Google launched Bard, their newest AI chatbot service driven by the LaMDA (Language Model for Dialogue Applications). However, the CEO announced that the platform would only be restricted to test users before publicly available.

February 2023 - Aurora Mobile Limited is the new ecosystem partner of Ernie Bot. With this, the company will access the chatbot and apply Baidu’s intelligent dialogue technology in its marketing technology and customer engagement services. 

January 2023 - Microsoft Corporation and OpenAI extend their partnership, intending to accelerate AI developments and provide advanced solutions to their customers. The evolution of the partnership enables both companies to commercialize the resulting advanced AI technologies independently.

January 2023 - Walmart, a U.S.-headquartered retail giant, partnered with software company Salesforce to offer pickup and delivery services for retailers. This partnership will provide a personalized customer experience using AI and real-time data.

Regional Insights

Largest Market -> North America

Federal investments in technology and a global network of scientists and entrepreneurs have strengthened the US's innovation ecosystem. To increase the participation of underrepresented groups in artificial intelligence education, research, and workforce development, the US government has developed programs like the Expanding AI Innovation via Capacity Building and Part II program. The US National Science Foundation's program, which was introduced in December 2022, intends to promote the participation of organizations that support underrepresented groups in AI education, research, and workforce development. The project is anticipated to help the business and contribute to the general expansion of the AI market.

Fastest Growing Market-> Asia-Pacific

Due to rising corporate investment, the Asia Pacific region is expected to have the fastest-growing artificial intelligence market. Chinese tech behemoth Baidu Incorporation has agreed to sell a financial services company. Due to the increasing use of AI technology, the market is also rising in sectors like the automotive, healthcare, retail, and food and beverage industries. The upcoming years are anticipated to see this increase continue.

Segments Covered in the Artificial Intelligence (AI) Market Report

Artificial Intelligence (AI) Market by Offering 

• Hardware 
• Software 
• Services 

Artificial Intelligence (AI) Market by Technology 

• Machine Learning 
• Natural Language Processing 
• Context-Aware Computing 
• Computer Vision 

Artificial Intelligence (AI) Market by Deployment 

• On-premise 
• Cloud 

Artificial Intelligence (AI) Market by Organization Size 

• Large enterprises 
• Small & medium enterprises (SMEs) 

Artificial Intelligence (AI) Market by Business Function 

• Marketing and Sales 
• Security 
• Finance 
• Law 
• Human Resource 
• Other 

Artificial Intelligence (AI) Market by End-Use 

• Healthcare 
  • Robot Assisted Surgery 
  • Virtual Nursing Assistants 
  • Hospital Workflow Management 
  • Dosage Error Reduction 
  • Clinical Trial Participant Identifier 
  • Preliminary Diagnosis 
  • Automated Image Diagnosis 
• BFSI 
  • Risk Assessment 
  • Financial Analysis/Research 
  • Investment/Portfolio Management 
  • Others 
• Law 
• Retail 
• Advertising & Media 
• Automotive & Transportation 
• Agriculture 
• Manufacturing 
• Others

Frequently Asked Questions

What is the expected growth rate of the Artificial Intelligence (AI) market over the next 7 years?

“The Artificial Intelligence (AI) Market Predictable at $389 .56 billion in 2022, is estimated to increase at a CAGR of 20.57% from $425.56 billion in 2023 to $1999.48 billion by 2030.”

Who are the major players in the Artificial Intelligence (AI) market and what is their market share?

Microsoft Corporation, IBM Corporation, Amazon.com, Inc., Apple Inc., and NVIDIA Corporation are the top players in the market.

What market drivers are there for artificial intelligence?

The global artificial intelligence market is expanding considerably as a result of the increasing demand for artificial intelligence technology across numerous industry verticals, including retail, BFSI, healthcare, food and beverage, automotive, and logistics.

Which region accounted for the largest share in the market?

North America is the most prominent country in this market.