McKinsey estimates that artificial intelligence (AI) has the potential to create up to $5.8 trillion in value annually across nine business functions in 19 industries – about 40% of the overall $15.4 trillion annual impact that could potentially be enabled by all analytical techniques.
Within the finance function, one application that is accelerating adoption of AI is robotics process automation (RPA).
With so much opportunity, it is less difficult to fathom by businesses are doubling down on AI spending.
For its part, IDC is forecasting that global spending on AI systems will maintain its strong growth trajectory as businesses continue to invest in projects that utilize the capabilities of AI software and platforms.
In the Worldwide Artificial Intelligence Systems Spending Guide IDC forecasts AI spending to grow from $37.5 billion in 2019, and balloon to $97.7 billion by 2023, with CAGR of 28.4% over the 2018-2023 forecast period.
"The AI market continues to grow at a steady rate in 2019 and we expect this momentum to carry forward," said David Schubmehl, research director, Cognitive/Artificial Intelligence Systems at IDC.
He says the use of AI and machine learning (ML) is occurring in a wide range of solutions and applications from ERP and manufacturing software to content management, collaboration, and user productivity.
IDC expects AI will be the disrupting influence changing entire industries over the next decade.
With spending of north of $5 billion in 2019, the retail and banking lead all other industries in AI spending.
Nearly half of the retail spending will go toward automated customer service agents and expert shopping advisors & product recommendation systems.
The banking industry will focus its investments on automated threat intelligence and prevention systems and fraud analysis and investigation.
Other industries that will make significant investments in AI systems throughout the forecast include discrete manufacturing, process manufacturing, healthcare, and professional services.
The fastest spending growth will come from the media industry and federal/central governments with five-year CAGRs of 33.7% and 33.6% respectively.
Marianne D'Aquila, research manager, IDC Customer Insights & Analysis, commented that AI has moved well beyond prototyping and into the phase of execution and implementation.
"Strategic decision makers across all industries are now grappling with the question of how to effectively proceed with their AI journey. Some have been more successful than others, as evidenced by banking, retail, manufacturing, healthcare, and professional services firms making up more than half of the AI spend. Despite the learning curve, IDC sees higher than average five-year annual compounded growth in government, media, telecommunications, and personal and consumer services," she elaborated.
The three largest AI use cases – automated customer service agents, automated threat intelligence and prevention systems, and sales process recommendation and automation – will deliver 25% of all spending in 2019.
The next six use cases will provide an additional 35% of overall spending this year. The use cases that will see the fastest spending growth over the 2018-2023 forecast period are automated human resources (43.3% CAGR) and pharmaceutical research and development (36.7% CAGR). However, eight other use cases will have spending growth with five-year CAGRs greater than 30%.
On a geographic basis, the United States will deliver more than 50% of all AI spending throughout the forecast, led by the retail and banking industries. Western Europe will be the second largest geographic region, led by banking and discrete manufacturing.
China will be the third largest region – behind the US and Europe – for AI spending with retail, state/local government, and professional services vying for the top position. The strongest spending growth over the five-year forecast will be in Japan (45.3% CAGR) and China (44.9% CAGR).
