IDC Reports Rapid Growth in AI Platforms Software Market with $153B Forecast by 2028

NEEDHAM, Mass., July 29, 2024 — The market for artificial intelligence (AI) platforms software grew at a rapid pace in 2023 and is projected to maintain its remarkable momentum, driven by the increasing adoption of AI across many industries. A new International Data Corporation (IDC) forecast shows that worldwide revenue for AI platforms software will grow to $153.0 billion in 2028 with a compound annual growth rate (CAGR) of 40.6% over the 2023-2028 forecast period.

“The AI platforms market shows no signs of slowing down. Rapid innovations in generative AI is changing how companies think about their products, how they develop and deploy AI applications, and how they leverage technology themselves 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 supports interoperating APIs, ecosystem extensibility, and responsible AI adoption at scale.”

AI adoption soared to new heights in 2023 with worldwide AI platform software revenue growing 44.4% year over year to $27.9 billion, according to IDC’s Worldwide Artificial Intelligence Platforms Software Market Shares, 2023. Microsoft’s leadership in the AI platforms software market can be attributed to its robust and comprehensive offerings, as well as 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 both businesses and developers alike. Palantir, OpenAI, Google, and Amazon Web Services rounded out the top 5 AI platform software providers in 2023.

According to IDC’s Future Enterprise Resiliency and Spending Survey, Wave 4 (April 2024, N=764), half of the organizations currently deploying GenAI in production have already selected an AI Platform, while most of the organizations that have already initiated significant investments will do so in the next six months.

“AI has the potential to enhance user experience, optimize advertising, personalize 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. Organizations need to identify patterns and anomalies, identify potential risks, and remediate problems before they become widespread. While not all risks can be removed, risk mitigation can be accelerated using AI itself, providing better security and resilience for customers.”

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, categorization, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation. The AI platforms market is made up of three functional markets: 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%. This trend is attributed to the advanced security measures, data and regulatory compliance, and the scalability capabilities that cloud vendors offer. 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.

The IDC report, Worldwide Artificial Intelligence Platforms Software Forecast, 2024–2028: AI Integration Accelerates, Fueling Technological Breakthroughs and Business Transformations (Doc #US52386424), presents a view of worldwide artificial intelligence (AI) platforms software revenue for the historical year 2023 and the five forecast years 2024–2028.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company.

Source: IDC