AI to be worth $1.2 trillion this year, says Gartner.
intelligence (AI) is projected to total $1.2 trillion in 2018, according to
The market is expected to grow 70% from last year, and to
continue to grow to reach $3.9 trillion in 2022.
Gartner said that AI presented three different sources of business
value including an indirect costs due to use of AI in Customer Experience
deployments, increased sales of existing products or services or opening up new
opportunities, and cost reduction in production and delivery.
"AI promises to be the most disruptive class of technologies
during the next 10 years due to advances in computational power, volume,
velocity and variety of data, as well as advances in deep neural networks
(DNNs)," said John-David Lovelock, research vice president at Gartner.
"One of the biggest aggregate sources for AI-enhanced
products and services acquired by enterprises between 2017 and 2022 will be
niche solutions that address one need very well. Business executives will drive
investment in these products, sourced from thousands of narrowly focused,
specialist suppliers with specific AI-enhanced applications."
AI business value growth shows the typical S-shaped curve
pattern associated with an emerging technology. In 2018, the growth rate is
estimated to be 70%, but it will slow down through 2022 to 17%. After 2020, the
curve will flatten, resulting in low growth through the next few years.
"In the early years of AI, customer experience (CX) is the
primary source of derived business value, as organizations see value in using
AI techniques to improve every customer interaction, with the goal of
increasing customer growth and retention. CX is followed closely by cost
reduction, as organizations look for ways to use AI to increase process
efficiency to improve decision making and automate more tasks," said Lovelock.
"However, in 2021, new revenue will become the dominant
source, as companies uncover business value in using AI to increase sales of
existing products and services, as well as to discover opportunities for new
products and services. Thus, in the long run, the business value of AI will be
about new revenue possibilities."
Breaking out the global business value derived by AI type,
decision support/augmentation (such as DNNs) will represent 36% of the global
AI-derived business value in 2018. By 2022, decision support/augmentation will
have surpassed all other types of AI initiatives to account for 44% of global
AI-derived business value.
"DNNs allow organisations to perform data mining and pattern
recognition across huge datasets not otherwise readily quantified or
classified, creating tools that classify complex inputs that then feed
traditional programming systems. This enables algorithms for decision support/augmentation
to work directly with information that formerly required a human classifier,"
said Lovelock. "Such capabilities have a huge impact on the ability of
organizations to automate decision and interaction processes. This new level of
automation reduces costs and risks, and enables, for example, increased revenue
through better micro-targeting, segmentation, marketing and selling."
Virtual agents allow corporate organizations to reduce labour
costs as they take over simple requests and tasks from a call centre, help desk
and other service human agents, while handing over the more complex questions
to their human counterparts. They can also provide uplift to revenue, as in the
case of robo-advisors in financial services or upselling in call centres. As
virtual employee assistants, virtual agents can help with calendaring,
scheduling and other administrative tasks, freeing up employees' time for
higher value-add work and/or reducing the need for human assistants. Agents
account for 46% of the global AI-derived business value in 2018 and 26% by
2022, as other AI types mature and contribute to business value.
Decision automation systems use AI to automate tasks or
optimize business processes. They are particularly helpful in tasks such as
translating voice to text and vice versa, processing handwritten forms or
images, and classifying other rich data content not readily accessible to
conventional systems. As unstructured data and ambiguity are the staple of the
corporate world, decision automation - as it matures - will bring tremendous
business value to organizations. For now, decision automation accounts for just
2% of the global AI-derived business value in 2018, but it will grow to 16% by
Smart products account for 18% of global AI-derived business
value in 2018, but will shrink to 14% by 2022 as other DNN-based system types
mature and overtake smart products in their contribution to business value.
Smart products have AI embedded in them, usually in the form of cloud systems
that can integrate data about the user's preferences from multiple systems and
interactions. They learn about their users and their preferences to
hyperpersonalize the experience and drive engagement.
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