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Global AI Software Market to Skyrocket to $251 Billion by 2027, Forecast Reveals

TL;DR

  • The AI software market is set to experience explosive growth in the coming years, according to a recent forecast.
  • The IDC’s forecast encompasses various categories within the AI-centric software landscape.
  • AI Platforms play a pivotal role in enabling the development of artificial intelligence models and applications.

The worldwide artificial intelligence (AI) software market is set to experience explosive growth in the coming years, according to a recent forecast by the International Data Corporation (IDC). The IDC predicts that the AI software market will surge from $64 billion in 2022 to nearly $251 billion by 2027, representing a remarkable compound annual growth rate (CAGR) of 31.4%. This substantial growth underscores the increasing importance of AI in various industries and its role in shaping the future of business operations.

Diverse categories drive AI software market expansion

The IDC’s forecast encompasses various categories within the AI-centric software landscape, including Artificial Intelligence Platforms, AI Applications, AI System Infrastructure Software (AI SIS), and AI Application Development and Deployment (AI AD&D) software, excluding Generative AI platforms and applications.

Among these categories, AI Applications currently take the lead, constituting approximately one-third of the market’s overall revenue in 2023. This category encompasses a wide range of applications, including collaborative tools, content workflow and management, enterprise resource management (ERM), supply chain management, production and operations, engineering, and customer relationship management (CRM) applications. While AI Applications remain a significant revenue driver, their growth is projected to have a five-year CAGR of 21.1%, slightly trailing the overall market.

The second-largest category in terms of revenue in 2023 is Artificial Intelligence Platforms, with a robust 35.8% CAGR over the 2023-2027 forecast period. AI Platforms play a pivotal role in enabling the development of artificial intelligence models and applications, such as intelligent assistants with human-like cognitive abilities. This category is poised to become the largest revenue contributor throughout most of the forecast period.

The two smaller categories, AI System Infrastructure Software (AI SIS) and AI Application Development and Deployment (AI AD&D) software, are expected to outpace the overall market growth with five-year CAGRs of 32.6% and 38.7%, respectively. 

AI SIS benefits from its integration with existing software systems, empowering organizations to extract valuable insights from vast data sources for informed decision-making and operational optimization. On the other hand, AI AD&D encompasses analytics, business intelligence software, data management, integration, orchestration, application development, software quality, life-cycle software, and application platforms.

Growing demand for customized AI solutions

A recent IDC survey has revealed that approximately one-third of respondents anticipate that organizations will prefer to procure AI software from vendors or leverage in-house support alongside vendor-supplied AI software for specific use cases or application areas within the next 12 months. This growing preference for AI solutions underscores the evolving demand for customized approaches tailored to individual business requirements.

Raghunandhan Kuppuswamy, Research Manager at IDC, emphasized the enduring momentum behind investments in AI and automation technologies. He noted that businesses recognize the strategic necessity of adopting cutting-edge technology to ensure long-term success. Despite economic uncertainty and shifting market dynamics, organizations are confident that integrating AI into their operations is essential for future-proofing their businesses and staying competitive.

As the AI landscape continues to evolve rapidly, IDC’s Group Vice President, Ritu Jyoti, pointed out that the convergence of traditional AI with Generative AI is on the horizon. This convergence is expected to usher in innovative solutions that combine decision-making prowess with creative ingenuity. Jyoti also highlighted the importance of addressing challenges and prioritizing ethical considerations in AI adoption to maximize the long-term return on investment (ROI).

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Benson Mawira

Benson is a blockchain reporter who has delved into industry news, on-chain analysis, non-fungible tokens (NFTs), Artificial Intelligence (AI), etc.His area of expertise is the cryptocurrency markets, fundamental and technical analysis.With his insightful coverage of everything in Financial Technologies, Benson has garnered a global readership.

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