Report: AI Software Sales to Experience Massive Growth with 40.6% CAGR Over the Next Five Years

[AleksandarK]

The market for artificial intelligence (AI) platforms software grew at a rapid pace in 2023 and is projected to maintain its remarkable momentum, driven by the increasing adoption of AI across many industries. A new International Data Corporation (IDC) forecast shows that worldwide revenue for AI platforms software will grow to $153.0 billion in 2028 with a compound annual growth rate (CAGR) of 40.6% over the 2023-2028 forecast period.

"The AI platforms market shows no signs of slowing down. Rapid innovations in generative AI is changing how companies think about their products, how they develop and deploy AI applications, and how they leverage technology themselves for reinventing their business models and competitive positioning," said Ritu Jyoti, group vice president and general manager of IDC's Artificial Intelligence, Automation, Data and Analytics research. "IDC expects this upward trajectory will continue to accelerate with the emergence of unified platforms for predictive and generative AI that supports interoperating APIs, ecosystem extensibility, and responsible AI adoption at scale."




AI adoption soared to new heights in 2023 with worldwide AI platform software revenue growing 44.4% year over year to $27.9 billion, according to IDC's Worldwide Artificial Intelligence Platforms Software Market Shares, 2023. Microsoft's leadership in the AI platforms software market can be attributed to its robust and comprehensive offerings, as well as its vast ecosystem of products and services. Microsoft's AI solutions are deeply integrated into its popular software and cloud services, providing a seamless experience for both businesses and developers alike. Palantir, OpenAI, Google, and Amazon Web Services rounded out the top 5 AI platform software providers in 2023.

According to IDC's Future Enterprise Resiliency and Spending Survey, Wave 4 (April 2024, N=764), half of the organizations currently deploying GenAI in production have already selected an AI Platform, while most of the organizations that have already initiated significant investments will do so in the next six months.

"AI has the potential to enhance user experience, optimize advertising, personalize content, and improve data analytics. These advancements can drive increased online activity and commerce, leading to positive economic impacts," said Raghunandan Kuppuswamy, research manager, Artificial Intelligence and Automation at IDC. "However, AI also presents significant risks. Organizations need to identify patterns and anomalies, identify potential risks, and remediate problems before they become widespread. While not all risks can be removed, risk mitigation can be accelerated using AI itself, providing better security and resilience for customers."

AI platforms facilitate the development and deployment of AI models and applications, including intelligent assistants that may mimic human cognitive abilities. The technology components of AI platforms include machine learning (ML), deep learning, generative AI (GenAI), natural language processing (NLP), text analytics, rich media analytics, tagging, searching, categorization, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation. The AI platforms market is made up of three functional markets: AI life-cycle software, AI software services, and search and knowledge discovery software.

IDC expects cloud-based deployments of AI platforms software to grow at a faster rate than on premises deployments with revenue from AI platforms in the public cloud forecast to have a five-year CAGR of 50.9%. This trend is attributed to the advanced security measures, data and regulatory compliance, and the scalability capabilities that cloud vendors offer. With the rapid advancement of technology and the growing demand for AI solutions from businesses across industries, cloud-based deployment of AI platforms software is expected to continue expanding at a rapid rate.

The IDC report, Worldwide Artificial Intelligence Platforms Software Forecast, 2024-2028: AI Integration Accelerates, Fueling Technological Breakthroughs and Business Transformations (Doc #US52386424), presents a view of worldwide artificial intelligence (AI) platforms software revenue for the historical year 2023 and the five forecast years 2024-2028.

View at TechPowerUp Main Site

 

[Onasi]

See, AI is incredibly cool this way - you can add a feature or two using it to your software, no matter how useless said feature is in practice (or even if it’s actually “AI” driven), say to your shareholders that you are totally on the AI train and let your marketing spin the rest. Like this, I am sure that the growth can pretty much be exponential. I wouldn’t be surprised if every single somewhat used piece of software will have integrated AI features by the end of next year.

 

[Chaitanya]

See, AI is incredibly cool this way - you can add a feature or two using it to your software, no matter how useless said feature is in practice (or even if it’s actually “AI” driven), say to your shareholders that you are totally on the AI train and let your marketing spin the rest. Like this, I am sure that the growth can pretty much be exponential. I wouldn’t be surprised if every single somewhat used piece of software will have integrated AI features by the end of next year.

Even those shareholders and investors are getting impatient given lack of returns on investments after all this time.

Edit: Here is news of Apple "intelligence" being delayed(just like M$ co-"pilot").

Bloomberg: Apple Intelligence is running late, won't arrive with new iPhones

The long-awaited AI features will arrive a month later with a software update. Apple Intelligence's arrival might be delayed, reports Bloomberg News....

www.gsmarena.com

 

[Bwaze]

Even those shareholders and investors are getting impatient given lack of returns on investments after all this time.

That's the take we will see on tech sites like this only when the AI spending suddenly totally collapses, to the surprise of many readers who will only see praises and projected charts of stellar growth.

 

[JWNoctis]

Considering how the state-of-the-art of consumer-grade agentic AI just, say, 7 years ago was by then still the Creatures series of digital pets, the current development is quite out of the left field.

That's the take we will see on tech sites like this only when the AI spending suddenly totally collapses, to the surprise of many readers who will only see praises and projected charts of stellar growth.

That might actually be a better outcome than some actual AI, the kind of stuff not in consumers' hands and not in common knowledge, playing the leadership of some major nation state like a piano for its own purposes, for good or ill.

The uses are clear and present for all the lives it is ruining and all the problems it is causing and exacerbating, but the way the market is going about it is still...maniacal.

 

[Quicks]

AI, is so overhyped. People investing stupid amounts of money and electricity in hopes and dreams.

 

[ZoneDymo]

AI, is so overhyped. People investing stupid amounts of money and electricity in hopes and dreams.

I think even that is giving them too much credit, I'm pretty sure very few people know at all what "AI" is or does or could do...it's just nft's all over again

 

[Icon Charlie]

Calling total BS on this. God I just hate Market Speak. As stated before I have made investments. Currently gone conservative but commodies are not that bad if you know what you are doing. IMHO AI is nothing but a self filling prophecy by tech giants to keep their market share upwards.

Investors Are Suddenly Getting Very Concerned That AI Isn't Making Any Serious Money

An increasing number of Silicon Valley investors and Wall Street analysts are starting to ring the alarm bells over the billions of dollars being invested in AI, an overconfidence that could result in a massive bubble. As the Washington Post reports, investment bankers are singing a dramatically...

finance.yahoo.com

 

[JWNoctis]

Calling total BS on this. God I just hate Market Speak. As stated before I have made investments. Currently gone conservative but commodies are not that bad if you know what you are doing. IMHO AI is nothing but a self filling prophecy by tech giants to keep their market share upwards.

Investors Are Suddenly Getting Very Concerned That AI Isn't Making Any Serious Money

An increasing number of Silicon Valley investors and Wall Street analysts are starting to ring the alarm bells over the billions of dollars being invested in AI, an overconfidence that could result in a massive bubble. As the Washington Post reports, investment bankers are singing a dramatically...

finance.yahoo.com

It would be ironic if the boom-bust cycle of the market and an AI ice age would be the thing that ended up saving humanity from doom-by-ASI. wouldn't it?

There's probably zero margin between commercially-useful-AI-that-displace-significant-portion-of-human-labour and self-improving-AI-that-do-better-without-humanity-in-the-way. Lesser AI is already causing enough problems as they are.

AI, is so overhyped. People investing stupid amounts of money and electricity in hopes and dreams.

I think even that is giving them too much credit, I'm pretty sure very few people know at all what "AI" is or does or could do...it's just nft's all over again

Interestingly, you can ask a SOTA LLM you can run on a well-appointed home PC (NOT the lobotomised ChatGPT and the likes) to, quote unquote, give you hopes and dreams. It would happily do that, and do that quite cannily well. Basic human condition is deceptively simple, and surprisingly tractable.

It's easy to miss what's actually going on amid all the noise and, yes, hype.