AI Market Value

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.

Revenues over $300 billion are forecast in 2024 with a five-year 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.

CRM (Customer Relationship Management) AI Applications and ERM (Enterprise Risk Management) AI Applications are the two largest segments with 20% and 17% share of the AI Applications 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%.

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. As for the rest of the AI Applications market, IBM is in first position under AI-centric type while Microsoft occupies the top spot under AI non-centric type.

The second largest AI category is services, which IDC forecasts will reach $18.4 billion in 2020, an increase of 13% year over year.

Within the AI services market, AI IT Services accounts for nearly 80% of the category’s revenue with AI Business Services delivering the rest.

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.

The top 5 companies in terms of market share – IBM, Accenture, Deloitte, Infosys, and Cognizant – captured roughly one third of the worldwide AI services market in 2019.

IDC expects AI hardware (server and storage combined) revenues to reach $13.4 billion in 2020, representing 10.3% year-over-year growth, which is a significant drop from the prior year when it grew 33.4%.

Within the hardware market, AI Storage is forecast to grow 11.4% this year, slightly ahead of AI Server, which is expected to grow 10.1%.

However, from a size perspective, AI Server is responsible for more than 80% of total AI hardware revenues.

The overall hardware market is forecast to have a strong recovery with 35.5% year-on-year growth next year, led by AI Storage, which is expected to grow 43.1% year over year.

The top 3 companies in AI Server are Dell, Hewlett Packard Enterprise, and Inspur. They are the only 3 competitors with double-digit market share in that market space.

In the AI Storage market, Dell Technologies, NetApp, and Hewlett Packard Enterprise hold the top 3 positions.