Just how big is the AI software market?

Darren Sinden

Makers and facilitators will sell their products to end clients but also to vendors within the other two quadrants, who will use that technology and its capabilities to create their own premium applications and services

Artificial intelligence is all around us and many of us use AI-powered applications every day perhaps without even realising it. For example, if we use a voice search via our phones or smart speakers, or if we combine streaming services for the next must-see box set.

In fact, chatbots, recommendation engines and search tools are all likely to use some facets of artificial intelligence and associated disciplines such as machine learning and natural language processing.

Useful though these gadgets are they are not the breakthrough or killer applications in terms of this type of technology and thus far big tech has been unable to properly monetise the potential of AI.

IBM has tried several times to use its Watson supercomputer for financial advantage, opening it up to marketeers and then the healthcare sector but in both cases with largely indifferent results.

However, we may have seen a sea change recently as Google’s Deep Mind AI has made what are described as huge leaps in mapping protein structures, creating the 3D shapes of proteins from their amino acid structures, a task that had defied the efforts of scientists and their conventional computing methods.

The breakthrough could enable medicines to be developed and bought to market more quickly, and allow scientists greater insight into the building blocks of cells and therefore of life itself.

It’s an opportune moment then for Forrester Research to publish a report that assesses what the AI software market will be worth out to 2025.

Forrester’s report breaks down the AI market into four distinct areas of facilitator platforms, AI maker platforms, AI-infused applications and AI-centric applications and middleware.

Makers and facilitators will sell their products to end clients but also to vendors within the other two quadrants, who will use that technology and its capabilities to create their own premium applications and services, perhaps making AI applications available in the cloud, or as SaaS products.

Forrester places a conservative valuation on the size of the market out to 2025 valuing it at a figure of $37 billion, with the biggest potential in AI-infused apps of the kind that consumers are already familiar with. Such as health and activity monitors that are contained within smartwatches.

Other research houses have taken a far more aggressive stance on the size of the addressable market with Grand View Research of San Fransico positing a figure more than ten times higher than Forrester’s view.

Why such a large discrepancy? Well the answer may lie in a report published by UBS back in early September, which identified a polarised adoption of AI among businesses, UBS suggested that “The benefits from AI are likely to accrue primarily to larger firms for two reasons: firstly, larger firms are more likely to have the resources to invest in AI, and secondly, larger firms are likely to accumulate extensive datasets, hence they are more likely to experience greater productivity efficiencies”

“As these companies continue to disrupt their industry peers, value and small caps have underperformed, and unfortunately, we don’t see this world of AI disruption ending any time soon” continues the report.

That suggests that democratisation of AI will be fundamentally important to the growth of the market for it, and so ultimately the amount growth in the market will likely depend on the makers of AI Infused applications and AI-centric applications, identified by Forrester’s research, and their ability to create usable and affordable tools, that enterprises of all shapes and sizes can adopt and afford. That may be a very difficult circle to square, but it will highly lucrative one if it can be accomplished.

Read this next

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

<