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By 2025 the market is expected to grow at a five-year compound annual growth rate (CAGR) of 20.2 per cent and total revenues reaching an impressive US$7.8 billion in India, highlights IDC report on the state of artificial intelligence (AI) adoption in India – covering hardware, software, and services markets. According to the businesses in India will accelerate the adoption of both AI-centric and AI non-centric applications for the next five years.
Amongst the three categories, AI software segment will dominate the market and would grow from US$2.8 billion in 2020 at a CAGR of 18.1 per cent by the end of 2025. Organisations 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 per cent of organisations 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. Organisations 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 are:
- AI applications forms the largest share of revenue for the AI software category, at more than 52 per cent 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.
