AI—Artificial Intelligence (or Augmented Intelligence)—has been a buzzword for decades. Every day we hear of things being augmented with AI: autonomous cars, for example. But is AI really growing and being implemented in practical, useful applications?

Apparently so. Worldwide revenues for the AI market, including software, hardware, and services, are expected to total $156.5 billion in 2020, an increase of 12.3% over 2019. While this year’s growth is somewhat slower than previous years due to the economic impact of COVID-19, IDC (Intl. Data Corp.) believes investment in AI will recover quickly.

A new forecast from the IDC Worldwide Semiannual Artificial Intelligence Tracker shows worldwide revenues surpassing $300 billion in 2024 with a five-year compound annual growth rate (CAGR) of 17.1%. Software is the largest AI technology group delivering roughly 80% of all AI revenue. Most of the software revenue comes from AI applications ($120.4 billion in 2020) with AI software platforms ($4.3 billion) delivering the remainder.

Customer relationship management (CRM) and ERM (enterprise risk management) are the two largest AI applications segments with 20% and 17% share of the market. Other key segments include AI for content workflow and management applications, production applications, and collaborative applications. While software will remain the largest category throughout the forecast, it will also see the slowest growth with a five-year CAGR of 16.7%.

CRM AI applications are expected to take center stage within the AI market, both in terms of its sheer size and growth opportunities. In terms of vendor share, Adobe had the top spot for AI-centric CRM applications while Microsoft was #1 in AI non-centric CRM applications. Meanwhile, in ERM AI applications, Ceridian and Intuit take the top spots in AI-centric and AI non-centric types, respectively.

Rising demand for expertise in embedding AI-enabling technologies into business analytics and intelligent automation programs has led to a highly competitive and fragmented AI services vendor landscape. Although the overall market has seen a slowdown due to the COVID-19 pandemic, investments for AI and analytics infrastructure will continue, and perhaps increase, in specific industries such as life sciences, healthcare and Media & Entertainment.

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