AI platforms software market poised for strong growth

The market for artificial intelligence (AI) platforms software experienced rapid growth in 2023 and is expected to maintain its remarkable momentum, driven by the increasing adoption of AI across numerous industries, according to market intelligence firm IDC.

IDC’s latest forecast projects that worldwide revenue for AI platforms software will reach $153.0 billion by 2028, with a compound annual growth rate (CAGR) of 40.6 per cent over the 2023-2028 forecast period.

“The AI platforms market shows no signs of slowing down. Rapid innovations in generative AI are changing how companies think about their products, how they develop and deploy AI applications, and how they leverage technology for reinventing their business models and competitive positioning,” said Ritu Jyoti, group vice president and general manager of IDC’s Artificial Intelligence, Automation, Data and Analytics research.

“IDC expects this upward trajectory will continue to accelerate with the emergence of unified platforms for predictive and generative AI that support interoperating APIs, ecosystem extensibility, and responsible AI adoption at scale,” Jyoti added.

Moreover, AI adoption soared to new heights in 2023, with worldwide AI platform software revenue growing 44.4 per cent year-over-year to $27.9 billion, according to IDC’s ‘Worldwide Artificial Intelligence Platforms Software Market Shares, 2023’ report.

Microsoft led the AI platforms software market due to its robust and comprehensive offerings and its vast ecosystem of products and services.

Microsoft’s AI solutions are deeply integrated into its popular software and cloud services, providing a seamless experience for businesses and developers alike.

Palantir, OpenAI, Google, and Amazon Web Services rounded out the top five AI platform software providers in 2023.

Furthermore, according to IDC, half of the organisations currently deploying generative AI in production have already selected an AI platform, while most organisations that have initiated significant investments plan to do so in the next six months.

“AI has the potential to enhance user experience, optimise advertising, personalise content, and improve data analytics. These advancements can drive increased online activity and commerce, leading to positive economic impacts,” said Raghunandan Kuppuswamy, research manager, Artificial Intelligence and Automation at IDC.

“However, AI also presents significant risks. Organisations need to identify patterns and anomalies, recognise potential risks, and remediate problems before they become widespread,” Kuppuswamy.

The research manager also stated that “while not all risks can be removed, risk mitigation can be accelerated using AI itself, providing better security and resilience for customers”.

The company also stated that AI platforms facilitate the development and deployment of AI models and applications, including intelligent assistants that may mimic human cognitive abilities.

The technology components of AI platforms include machine learning (ML), deep learning, generative AI (GenAI), natural language processing (NLP), text analytics, rich media analytics, tagging, searching, categorisation, clustering, hypothesis generation, question answering, visualisation, filtering, alerting, and navigation.

The AI platforms market comprises three functional markets. These include AI life-cycle software, AI software services, and search and knowledge discovery software.

IDC expects cloud-based deployments of AI platforms software to grow at a faster rate than on-premises deployments, with revenue from AI platforms in the public cloud forecast to have a five-year CAGR of 50.9 per cent.

“This trend is attributed to the advanced security measures, data and regulatory compliance, and the scalability capabilities that cloud vendors offer,” the company said in a report.

“With the rapid advancement of technology and the growing demand for AI solutions from businesses across industries, cloud-based deployment of AI platforms software is expected to continue expanding at a rapid rate,” IDC concluded.