Retail will overtake banking in 2018 to become the industry leader in cognitive and artificial intelligence spending.
This is according to research firm IDC's Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide.
The report says retail firms will invest $3.4 billion this year on a range of AI use cases, including automated customer service agents, expert shopping advisors and product recommendations, and merchandising for omnichannel operations.
The worldwide spending on cognitive and AI systems will reach $19.1 billion in 2018, an increase of 54.2% over the amount spent in 2017, says IDC.
The report found cognitive and AI spending will grow to $52.2 billion in 2021 and achieve a compound annual growth rate of 46.2% over the 2016-2021 forecast period.
Much of the $3.3 billion spent by the banking industry will go toward automated threat intelligence and prevention systems, fraud analysis and investigation as well as program advisors and recommendation systems, it says.
Discrete manufacturing will be the third largest industry for AI spending with $2 billion going toward a range of use cases including automated preventative maintenance and quality management investigation and recommendation systems, notes the report.
The fourth-largest industry - healthcare providers - will allocate most of its $1.7 billion investment to diagnosis and treatment systems, says IDC.
Gartner predicts businesses will dedicate $2.9 trillion to AI by 2021, while substantial investments in the technology will recover 6.2 billion hours of worker productivity.
The cognitive and AI-use cases that will see the largest spending totals in 2018 are - automated customer service agents ($2.4 billion) with significant investments from the retail and telecommunications industries, says IDC. Automated threat intelligence and prevention systems will see $1.5 billion investment from the banking, utilities, and telecommunications industries, it notes. Sales process recommendation and automation ($1.45 billion) spending will be led by the retail and media industries, adds IDC.
"Enterprise digital transformation strategies are increasing including multiple cognitive/artificial intelligence use cases," says Marianne Daquila, research manager, customer insights and 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-over-year spending growth forecast, IDC expects to see an increase in general use cases, as well as a refinement of industry-specific use cases."
On a geographic basis, the US will deliver more than three quarters of all spending on cognitive/AI systems in 2018, led by the retail and banking industries, says IDC.
Western Europe will be the second-largest region in 2018, led by retail, discrete manufacturing and banking, it says. The strongest spending growth over the five-year forecast will be in Japan (73.5% CAGR) and Asia/Pacific (excluding Japan and China) (72.9% CAGR), it notes.
Syspro report says although there is a low current usage of these cutting-edge technologies in SA, there is massive intended usage.
All the forecasts for AI market size, revenues and spending on hardware, software and services predict very healthy growth over the next few years, says eMarketer. Although businesses of many sizes are interested in the technology, the bulk of investment continues to come from the largest tech enterprises, it adds. Over time however, a wider array of global companies are expected to invest, it says.
While machine learning is a priority for many enterprises today, looking at customer-facing business processes is where artificial intelligence in business will be focused in the future, says Aragon Research.
Business leaders responsible for planning have to be clear on the potential transformative power of even the newest AI technology, as it could mean a powerful competitive advantage or misstep in strategy, it adds.
Daniel Hong, vice president, research director for Forrester, says AI is in the toddler phase when it comes to maturity level. But it's growing fast as more ontologies are built, vector space models improve, and companies operationalise AI by using a broader workforce to conduct the tagging of customer interactions - called blended AI, he adds.
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