Keeping up with all the news about new and improved chatbots is becoming close to impossible, and AI is still not there to summarize it all for us. Recent developments include Amazon bringing out in quick succession the Echo Look and the Echo Show, aiming to improve further its commanding 70% market share (for more on this, see below). Google showed off its AI prowess and raised the stakes by allowing up to six different voices to control Google Home and Microsoft teamed up with Harman Kardon to produce a voice-activated speaker featuring Cortana. But the rush to the new voice frontier is not limited to the battle for the smart home and established enterprises are on the voice wagon in full force. At a recent fintech conference, Bank of America executives talked about Erica, an AI assistant it will introduce later this year, allowing consumers using bank's mobile app to chat via voice or text message.
Compared to a few years ago, the artificial intelligence (AI) market is starting to solidify around real-world applications with the pace of change being faster than it ever has been before, as startups and technology providers rush to create platforms and targeted niche solutions for solving specific enterprise problems. According to a new report from Tractica, the rising tide of AI adoption across multiple industries will drive significant growth during the next decade, and the market intelligence firm forecasts that annual worldwide AI software revenue will increase from $3.2 billion in 2016 in 2016 to $89.8 billion by 2025. This forecast is a significant upgrade of Tractica's previous projection for AI market revenue, which was published in 2Q17, due to an improved outlook for a number of specific use cases across multiple industries. "Artificial intelligence is already key to how consumer internet companies operate today, allowing them to roll out hyper-personalized services by following an'AI first' strategy," says research director Aditya Kaul. "The rest of the market in the enterprise and government sectors is still catching up on adopting AI and has yet to fully understand its value, including the breadth and depth of use cases, the technology choices surrounding AI, and the implementation strategies."
The active investments of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) in the artificial intelligence market, the growth rate of which over the next decade will be four times higher than that of the digital advertising market, increase the long-term investment attractiveness of the company. To begin, let's take a look at the current growth forecasts for the global Artificial Intelligence (AI) market in the coming decade. For a better clarity, I've slightly modified these data and projected the trend until the year 2030. Here is what I've got: over the next 15 years, this market will be growing at the CAGR of 40%, and in the next 10 years, it will be increasing by an average of 50% each year: Tractica forecast (a market intelligence firm that focuses on human interaction with technology) is a bit more modest, but it still suggests that the annual worldwide AI revenue will grow from $643.7 million in 2016 to $36.8 billion by 2025, demonstrating a CAGR of 49.88%: So, the growth in the next decade at an average annual rate of 50% - is really a lot? It depends on what to compare with, but given that I'm performing this analysis through the prism of perspectives for Alphabet, it probably makes sense to compare AI with digital advertising market, which is accountable for 87% of Google's revenue.
Google said it is rolling out its visual assistant, which brings ups information as well as ways to interact with apps with a Google Assistant voice request in a full-screen experience, to Android phones this summer. When an Android user makes a query through Google Assistant, Google will provide a more interactive visual experience on the phone. That includes ways to interact with smart home products, like thermostats, or interacting directly with apps like the Starbucks app. Google's visual assistant is coming to iOS devices this year. You can make a voice query such as "what is the temperature right now," and a display shows up with a way to change the temperature.