Idc Forecasts Revenue For Artificial Intelligence Software Will Reach $307 Billion Worldwide In 2027

By Author: Arina Smith
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AI Software Market Forecast and Trends
The International Data Corporation (IDC) forecasts significant growth in the worldwide artificial intelligence (AI) software market, projecting an increase from $64 billion in 2022 to nearly $251 billion in 2027, representing a compound annual growth rate (CAGR) of 31.4% [1]. This growth encompasses various AI software categories, including Artificial Intelligence Platforms, AI Applications, AI System Infrastructure Software (SIS), and AI Application Development and Deployment (AD&D) software. Notably, Generative AI platforms and applications are excluded from this projection but are expected to generate $55.7 billion in revenues by 2027.

AI Software Categories and Revenue Distribution
AI Applications (AI-centric Software): Currently the largest category, accounting for approximately one-third of the market's overall revenue in 2023. It covers collaborative, content workflow, enterprise resource management (ERM), supply chain management, production and operations, engineering, and customer relationship management (CRM) applications. Despite being the largest, it is ...
... expected to have a five-year CAGR of 21.1%, trailing the overall market growth [2].

Artificial Intelligence Platforms: The second-largest category in terms of 2023 revenue. It is anticipated to be the largest revenue category for most of the forecast period with a 35.8% CAGR. These platforms facilitate the development of AI models and applications, such as intelligent assistants [6].

AI Systems Infrastructure Software (AI SIS): One of the smallest categories, but expected to grow faster than the overall market with a five-year CAGR of 32.6%. This category benefits from integration with existing software systems, allowing organizations to derive valuable insights from vast amounts of data to make informed decisions and optimize operations [4].

AI Application Development and Deployment (AI AD&D) Software: Another small category projected to grow faster than the overall market with a five-year CAGR of 38.7%. It includes analytics, business intelligence software, data management, integration, orchestration, application development, software quality, life-cycle software, and application platforms [4].

Industry Trends and Outlook
Purchase Preferences: According to a recent IDC survey, about a third of respondents believe that organizations will prefer to buy AI software from a vendor or use in-house support alongside vendor-supplied AI software for specific use cases or application areas. This highlights a growing demand for AI solutions and the need for customized approaches based on individual business requirements [3].

Rapid Evolution: The AI landscape is evolving rapidly, with the convergence of traditional AI and Generative AI leading to cutting-edge solutions that combine decision efficacy with creative ingenuity. As businesses continue to invest in AI, they are advised to address challenges and prioritize ethical considerations to maximize long-term return on investment [6].

Ethical Considerations: IDC emphasizes the importance of addressing ethical considerations as AI technology advances. Businesses are encouraged to prioritize ethical practices to maximize the long-term return on investment [6].

In conclusion, the AI software market is poised for substantial growth, driven by increasing investments in AI and automation technologies. The evolving landscape and the emergence of new AI categories underscore the need for businesses to adapt, prioritize ethical considerations, and customize AI solutions based on individual requirements to stay competitive in the market.