Investment in Artificial Intelligence (AI) by retail companies is seen surging to $3.4 billion by yearend, according to International Data Corporation (IDC), a research firm, indicating that retailers would be the main driver for AI worldwide in 2018 ahead of banks, the top spenders in the last five years.
IDC said the sheer market size of AI software and systems, which is expected to reach US$35,870 million by 2025, opens opportunities that are causing retailers to pay serious attention to it.
“They are applying AI in new ways across the entire product and service cycle, from assembly to postsale customer service interactions.”
An estimated $19.1 billion dollar (15.5 billion euro) will be spent on cognitive and AI systems in 2018, more than 50 percent (54.2 percent to be exact) compared to last year, the research firm says.
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It says that 40 percent of every digital transformation initiative will use AI in 2019 and that number will grow to 75 percent in 2021.
With industries investing aggressively in projects that utilize cognitive/AI software capabilities, the IDC Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide forecasts cognitive and AI spending growing to $52.2 billion in 2021 and achieve a compound annual growth rate (CAGR) of 46.2 percent over the 2016-2021 forecast period.
Remarkably, the retail sector will surpass the banking industry and spend the most on AI, the simulation of human intelligence processes by machines, in 2018. IDC forecasts a $3.4 billion (2.76 billion euro) expense for retailers, more than banks, the top spenders in the past few years, which will spend 3.3 billion dollars (2.68 billion euro).
The report also states that discrete manufacturing will be the third largest industry for AI spending with $2.0 billion going toward a range of use cases including automated preventative maintenance and quality management investigation and recommendation systems. The fourth largest industry, healthcare providers, will allocate most of its $1.7 billion investment to diagnosis and treatment systems.
“Interest and awareness of AI are at a fever pitch. Every industry and every organization should be evaluating AI to see how it will affect their business processes and goto-market efficiencies,” said David Schubmehl, research director, cognitive/artificial intelligence systems at IDC.
According to Marianne Daquila, research manager, customer insights & analysis at IDC business transformation is occurring across all industries as successful companies embrace the array and potential impact of these solutions.
“Automated customer service agents, increased public safety, preventative maintenance, reduction of fraud, and improved healthcare diagnosis are just the tip of the iceberg driving spend today. “With double-digit year-overyear spending growth forecast, IDC expects to see an increase in general use cases, as well as a refinement of industry-specific use cases,” Daquila noted.
The report states that the strongest spending growth over the fiveyear forecast will be in Japan with 73.5 percent CAGR and Asia/Pacific (excluding Japan and China) with 72.9 percent CAGR. China will also experience strong spending growth throughout the forecast with 68.2 percent CAGR.
The United States will deliver more than three-quarters of all spending on cognitive/AI systems in 2018, led by the retail and banking industries followed by Western Europe expected to be the second largest region, championed by retail, discrete manufacturing and banking, the report states.
Today’s artificial intelligence, however, enables faster and more profound progress in nearly every field of human endeavour and it is essential to enabling the digital transformation that is at the heart of global economic development for companies such as active stocks in the markets including ShiftPixy Inc., Accenture plc., Nvidia Corporation, International Business Machines Corporation, Amazon Inc.