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In 2022, AI Market Value Will Reach US$120 Billion

Source images: GRID.id
Artificial Intelligence (AI) technology has actually been used for decades. However, this technology has gained popularity among the general public in recent years. The existence of Generative AI such as MidJourney or ChatGPT is one of the reasons behind the popularity of AI among the general public. As AI's popularity grows, it's no wonder that the market value of AI in 2022 will also increase.

According to the Precedence Research report, at the global level, the AI ​​industry is valued at US$119.78 billion in 2022. This figure is expected to reach US$1,591 billion in 2030. In the period from 2022 to 2030, the annual growth rate (CAGR) of the AI ​​industry is expected to reach 38 .1%.

AI Adoption Rates in Different Regions

North America is the region with the largest contribution to the total AI market in 2022. There are several reasons behind this. First, in the North American region, consumer demand for software and hardware products that use AI is indeed quite high. 

Apart from that, North America is also the home of many giant technology companies, such as Amazon, Apple, Facebook, Google, and IBM. These technology companies certainly have an important role in developing the AI ​​industry in North America.

Another reason why the AI ​​industry in North America is growing fast is because of the support from the government. In 2019, the President of the United States, Donald Trump introduced an initiative aimed at making the United States a leader in the field of AI. 

The main aim of the program is to boost the adoption rate of AI by providing guidelines on the concrete use of AI in various industrial sectors.

While North America is the region with the most value for the AI ​​industry, Asia Pacific is the region with the highest growth rate over the period 2022 to 2030. 

This growth will be driven by a growing number of companies and organizations investing in increasing AI adoption. As a result, consumer demand for AI technology has also increased.

Another reason the AI ​​industry in Asia Pacific can grow rapidly is because AI is increasingly being used in various industries. Several industries that use AI include automotive, health, and food and beverages.

In its report, Precedence Research also divides the AI ​​industry based on the solutions offered. With this, the AI ​​industry is divided into three categories: software, hardware, and services. Of the three categories, the software segment makes the largest contribution to the total AI industry in 2022. 

There are three things that drive the growth of the software segment, namely increased capabilities in data storage systems, parallel processing, and increased computing power.

Going forward, the software segment is expected to continue to grow. One of the main drivers of this growth is the increasing demand from companies to obtain relevant information and data. 

Meanwhile, in the 2022-2030 period, hardware is expected to be the segment in the AI ​​industry that has the highest growth. Hardware for the AI ​​industry includes CPUs, GPUs, Application-Specific Integrated Circuits (ASIC), and Field-Programmable Gate Arrays (FPGAs).

AI Is Being Used More and More, What's the Reason?

In recent years, the global AI industry has been able to grow thanks to several factors. One of them, the rapid rate of adoption of the internet and digital technology. Not only that, giant technology companies also have a role in driving the growth of the AI ​​industry.

This is because the decision of technology companies to invest in research and research related to AI has led to various new innovations in various industries. Not limited to the development of new technologies, technology companies such as Amazon, Apple, Google, IBM, and Microsoft also continue to make it easier for people to access AI technology.

Along with the increasingly sophisticated AI technology, more and more industries are using AI. Several industries that are expected to drive the growth of the AI ​​industry in the next few years include automotive, health, banking and finance, manufacturing, food and beverage, and logistics. The popularity of AI-based medical devices and self-driving features in electric cars is another thing that keeps the AI ​​market growing.

The rate of adoption of AI technology in the fields of Banking, Financial Services and Insurance (BFSI) also shows an upward trend. Because, AI solutions can be used for various things, from analyzing data, detecting fraud, database systems, to ensuring the security of bank systems.

Of course, the development of the AI ​​industry cannot be separated from the role of the government. In the future, the government is expected to make regulations that will have a positive impact on the AI ​​industry. 

For example, in 2020, the Indian government decided to increase the amount they spend on Digital India, to US$477 million. The Digital India program itself is aimed at developing the AI, Internet of Things (IoT), big data, cybersecurity, machine learning and robotics industries.

The AI ​​industry can also thrive as consumer-facing companies are starting to integrate AI into their business processes. The goal is to make the company's operations more efficient. The increasing rate of AI adoption has made more and more parties interested in exploring the AI ​​business by offering solutions and products that have specific functions.

Source of data: Precedence Research.