Worldwide spending on cognitive and AI systems has been forecast to reach $57.6 billion in 2021, according to the Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide from International Data Corporation (IDC). With many industries aggressively investing in cognitive and AI solutions, spending is expected to achieve a CAGR of 50.1% over the 2016-2021 forecast period. Worldwide spending on cognitive and AI systems were estimated to total $12.0 billion in 2017, an increase of 59.1% over 2016, IDC reported last September.
Artificial Intelligence: The Next Digital Frontier by MGI reveals that digital native companies made some of the most significant and earliest investments in AI, providing test cases for potential ROI in AI.
“Amazon has achieved impressive results from its $775 million acquisition of Kiva, a robotics company that automates picking and packing. “Click to ship” cycle time, which ranged from 60 to 75 minutes with humans, fell to 15 minutes with Kiva, while inventory capacity increased by 50%. Operating costs fell an estimated 20%, giving a return of close to 40% on the original investment.” – Artificial Intelligence: The Next Digital Frontier
At the end of 2017, IDC forecasted that retail and banking sectors will spend the most on AI systems. And for good reason: AI adoption and use survey by MGI found that out of 12 major industries, AI adopters with proactive strategies report current profit margins that are three to 15 percentage points higher than the industry average in most sectors, but they also expect this advantage to grow in the future, when they could expect their AI investment to mature and start paying substantial dividends. And industries with the highest margin delta are the financial services industry, retail, education, and healthcare.
“The retail and banking industries are forecast to spend the most on cognitive and AI systems in 2017 with investments of $1.74 billion and $1.72 billion, respectively. The discrete manufacturing, healthcare, and process manufacturing industries are also forecast to spend more than $1 billion each this year. These five industries will continue to be the industries with the largest spending amounts throughout the five-year forecast and, by 2021, their combined investments will represent nearly 55% of all worldwide spending.
In addition to spending the most on cognitive and AI systems, retail will also deliver the fastest spending growth with a 2016-2021 CAGR of 58.8%. Six other industries will see CAGRs greater than 50% over the forecast period.” – IDC, September 2017
According to MEDICI’s State of FinTech 2018 Report, key areas of AI/ML adoption impact in the financial services industry include:
Virtual assistants and chatbots