The artificial intelligence (AI) platform software market is expected to grow rapidly in 2023 and maintain its significant momentum due to the growing adoption of AI across many industries. According to a new forecast from International Data Corporation (IDC), worldwide AI platform software revenue is expected to grow at a compound annual growth rate (CAGR) of 40.6% over the forecast period 2023-2028, reaching $153 billion in 2028.
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According to a new forecast from IDC, worldwide revenue from AI platform software is expected to reach $153 billion in 2028, growing at a compound annual growth rate (CAGR) of 40.6% over the forecast period 2023-2028.
“The AI platform market shows no signs of slowing down. Rapid innovation in generative AI is changing how companies think about products, how they develop and deploy AI applications, and how they leverage the technology to reinvent their business models and competitive positioning,” said Ritu Jyoti, group vice president and general manager, artificial intelligence, automation, data and analytics research at IDC. “IDC expects this upward trend to continue to accelerate with the emergence of interoperable APIs, ecosystem scalability, and integrated predictive and generative AI platforms that support responsible AI adoption at scale.”
According to IDC's “Worldwide Artificial Intelligence Platform Software Market Shares, 2023,” AI adoption will reach new heights in 2023, with worldwide AI platform software revenue reaching $27.9 billion, up 44.4% year-over-year. Microsoft's leadership in the AI platform software market is due to the company's robust and comprehensive offering and vast ecosystem of products and services. Microsoft's AI solutions are deeply integrated into the company's popular software and cloud services, providing a seamless experience for both enterprises and developers. Palantir, OpenAI, Google, and Amazon Web Services rounded out the top five 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, and most of those that have already begun to invest heavily plan to do so within the next six months.
“AI can lead to better user experiences, advertising optimization, content personalization, and improved data analytics. These advancements can lead to increased online activity and commerce, which can have a positive impact on the economy,” said Raghunandan Kuppuswamy, research manager, artificial intelligence and automation, IDC. “However, AI also poses significant risks. Organizations need to identify patterns and anomalies, spot potential risks, and remediate issues before they spread. While it cannot eliminate all risks, AI itself can be used to accelerate risk mitigation and provide customers with greater security and resiliency.”
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The AI platform will facilitate the development and deployment of AI models and applications, including intelligent assistants that mimic human cognitive capabilities. The technology components of the AI platform include: Machine Learning (ML), Deep Learning, Generative AI (GenAI), Natural Language Processing (NLP), text analytics, rich media analytics, tagging, search, classification, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation. The AI platforms market consists of three functional markets: AI lifecycle software, AI software services, and search and knowledge discovery software.
IDC predicts that adoption of cloud-based AI platform software will grow at a faster pace than on-premise deployments, with revenue from public cloud AI platforms growing at a five-year CAGR of 50.9%. This trend is attributed to the advanced security measures, data and regulatory compliance, and scalability capabilities offered by cloud vendors. Rapid advancements in technology and growing demand for AI solutions from enterprises across industries are driving adoption of cloud-based AI platforms. AI Platform Software is expected to continue to expand rapidly in the future.
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