IDC: AI market revenues continue to grow but at a slower rate

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IDC has said that it expects to see worldwide revenue in the artificial intelligence (AI) market rise this year by around 12.3% compared to 2019. With the increase factored in, the analyst said that the market could see $156.5 billion in revenue this year. IDC said that the growth this year is slower due to the COVID-19 pandemic but it thinks that investment in AI will recover quickly.

According to IDC’s research, software makes up the largest AI technology group and delivers 80% of all AI revenue. Within the software segment, AI Applications bring in the lion’s share of revenue – IDC expects it to bring in $120.4 billion in 2020.

Commenting on the findings, Ritu Jyoti, program vice president, Artificial Intelligence Research at IDC, said:

“The role of AI Applications in enterprises is rapidly evolving. It is transforming how your customers buy, your suppliers deliver, and your competitors compete. AI applications continue to be at the forefront of digital transformation (DX) initiatives, driving both innovation and improvement to business operations.”

CRM AI Applications and ERM AI Applications were the two largest segments in the AI Applications market accounting for 20% and 17% of the market share respectively. IDC said Adobe held the top spot for AI-centric CRM Applications while Microsoft held first place for AI non-centric CRM applications. In the AI Application segment as a whole, Microsoft also holds the top spot under AI non-centric software.

On the AI hardware front, IDC said revenues will reach $13.4 billion in 2020, an increase of 10.3% year-over-year. As with the software category, this growth rate represents a significant drop from the previous year when it grew 33.4%. The analyst said that AI hardware should return to strong growth next year with 35.5% year-on-year growth.

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