Market Forecast

Omdia’s market forecast is focused on identifying the software, hardware, and services revenue opportunity for AI. Using a bottom-up, use case-based model that classifies and estimates the revenue potential for each use case, rolled up by industry, technology, and world region, Omdia estimates overall AI market revenue from 2017 to 2025, and calculates the compound annual growth rate (CAGR) for the 8-year period.

The revenue for each use case described in this report represents software revenue, which is accounted for as direct or indirect revenue. Direct revenue represents the income derived from the sales of an AI-led solution, where AI is the key value being sold and marketed.

For example, emotion analysis, legal contract analysis, or cybersecurity threat estimation are services where AI is being sold as the key value proposition. Indirect revenue is counted in cases where AI is not necessarily the key value proposition, but AI is a layer or plugin that enhances an existing application or service. In other words, for indirect revenue, the use cases are AI-enabled rather than AI-led. For example, Google search, Amazon product recommendations, and Facebook news feeds are existing services where AI does not define the end product, but is a way of enhancing it.

The forecasts throughout this report are snapshots from Omdia’s 3Q 2018 edition of the Artificial Intelligence Market Forecasts report.

Omdia forecasts that the revenue generated from the direct and indirect application of AI software will grow from $5.4 billion in 2017 to $105.8 billion by 2025. This represents a significant growth curve for the forecast period with a CAGR of 45%.