Corporate funding splurged on AI technology is expected to grow to $120bn by 2025 in the US, a yearly increase of 26 percent over the next four financial years, according to IDC.
The two largest industries ramping up investments in machine learning are retail and banking, according to the market research firm. Together they are predicted to make up 28 percent, nearly $20bn, of investments by 2025. The fastest rate of spending increase, however, will come from media and financial trading businesses. AI investments for these markets are projected to grow 30 percent year over year. Automated claims processing and IT optimization will be growth areas, increasing 30 and 29.7 percent respectively every year until 2025.
“The greatest potential benefit for the use of AI remains its use in developing new business, and building new business models,” Mike Glennon, senior research manager with IDC’s Customer Insights & Analysis team said.
“However, existing businesses are hesitant to embrace this potential, leaving the greatest opportunities to new market entrants that have no fear of change and can adapt easily to new ways of conducting business. The future for business is AI and those companies that can seize this opportunity could easily become the new giants.”
There are different levels of risk for different types of industries when adopting AI. In retail, for example, IDC reckons most funding will go towards “augmented customer service agents” and “expert shopping advisors and product recommendations”, which will account for nearly 40 percent of AI spending in retail and more than 20 percent of the total funding in 2025. A separate report from Gartner said companies were set to spend $7bn on AI chatbots.
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Before the latest AI boom, retailers were already using software to automate customer service and advertise products online. Switching over to a newer form of technology that’s more efficient and effective isn’t as risky compared to industries that never had those capabilities in place before.
Banking is similar in that respect. Online services like fraud analysis or threat intelligence are some of the areas that are expected to become increasingly powered by AI, and these capabilities were already previously handled by software.
The roll-out of AI in industries thus is increasing, though the tech is still considered high risk in healthcare and transportation. ®