By 2025, India's AI market is expected to grow at a five-year CAGR of 20.2% and total revenues reaching an impressive $7.8 billion.
By 2025, India’s artificial intelligence (AI) market is expected to grow at a five-year compound annual growth rate (CAGR) of 20.2% and total revenues reaching an impressive $7.8 billion, according to a new report by International Data Corp. (IDC). According to the report, which provides a comprehensive coverage of the state of AI adoption in India—from hardware, software, and services markets—businesses will accelerate the adoption of both AI-centric and AI non-centric applications for the next five years.
Among the three categories, AI software segment will dominate the market and would grow from $2.8 billion in 2020 at a CAGR of 18.1% by the end of 2025. Organizations are leveraging multiple AI applications such as CRM, ERM and others to manage operations, scale supply chains in response to real-time or predicted demands and many more to provide benefits for their customers, improve ROI and achieve cost savings.
“Indian organizations plan to invest in AI to address current business scenarios across functions, such as customer service, human resources (HR), IT automation, security, recommendations, and many more. Increasing business resilience and enhancing customer retention are among the top business objectives for using AI by Indian enterprises,” says Rishu Sharma, Associate Research Director, Cloud and AI, IDC India.
The report also demonstrates the state of organizations’ AI initiatives and answers key questions around deployment models for AI/ML solutions. AI-powered solutions process multiple data types to provide relevant recommendations to decision-makers. The India AI market report provides a glimpse of different data types that are being processed by the organizations for their AI/ML solutions.
About 51% of organizations are processing transactional and social media data through AI/ML solutions.
“With data being one of the most crucial components in an AI/ML project, businesses use variety of databases to handle large data volumes for making real time business decisions. Organizations must focus on getting high-quality training data for AI/ML models, as this would define the success of their AI initiatives,” says Swapnil Shende, Senior Market Analyst, AI.
Some of the key highlights of the report:
• AI applications forms the largest share of revenue for the AI software category, at more than 52% in 2020.
• Indian organizations cited cloud as the preferred deployment location for their AI/ML solutions.
• The major reasons for AI projects to fail includes disruptive results to current business processes and lack of follow-ups from business units.