Originally published on Technavio:Enterprise AI Market Analysis North America, Europe, APAC, Middle East and Africa, South America - US, Canada, China, Germany, UK - Size and Forecast 2024-2028
Methodology
Enterprise Artificial Intelligence (AI) Market Forecast 2024-2028
The Enterprise Artificial Intelligence (AI) Market size is projected to increase by USD 48,960 million, at a CAGR of 46.52% between 2023 and 2028. The growth rate of the market depends on several factors, including the increasing interest in chatbot AI, the rising demand for automation among enterprises, and the focus on intelligent business models. 

Market Overview:
Market Growth Analysis Driver
Rising demand for automation among enterprises is the key factor driving market growth. Businesses are increasingly recognizing the transformative potential of artificial intelligence in automating routine tasks, streamlining processes, and augmenting overall operational efficiency. In addition, as enterprises seek to optimize their workflows and reduce manual interventions, AI technologies play a pivotal role. Automation not only accelerates processes but also minimizes errors, leading to improved productivity and cost-effectiveness. 

Moreover, the versatility of AI solutions in addressing varied business needs further propels the growth of the global enterprise artificial intelligence (AI) market. The ongoing digital transformation journey of enterprises, where automation is a key enabler, further underscores the significance of AI technologies in shaping the future landscape of business operations. The demand for automation is expected to increase, which will drive market growth during the forecast period.

Market Growth and Trends:
Increasing focus on AI-ready solutions is the primary trend shaping market growth. Several businesses across the globe are using AI-ready solutions to incorporate AI into business strategies. Enterprises can plug AI-ready tools into any element of their business workflow that involves data. Leveraging tools, such as sentiment analysis, classification, and prediction algorithms, allows several businesses to derive useful insights from large amounts of data.

Additionally, aligned with market trends and analysis, SMEs can use third-party AI-ready tools with easy-to-use interfaces and efficient machine-learning functionality to manage their data workflow. Workflow automation coupled with business intelligence through AI tools will save businesses time and money while enabling them to stay competitive in the data-driven economy. This, in turn, will drive market growth during the forecast period.

Market Restrain:
The complexity of understanding data is a challenge that affects market growth. The current AI technologies, which include IBM Watson, find it difficult to process information as humans do. This is because most of the information is processed as data and not as a language. Contextual issues arise because AI processes the information as spatial text. Natural language needs to be processed in the right context. Context can only be developed when the language is understood and not only by reading words. The final issue is that of understandability.

Also, AI technologies need to process the data and reach the right understanding to make decisions. Without any understanding capability, AI technology will not be able to resolve complex issues. Furthermore, AI strategies do not understand the needs of data. This is a major challenge for enterprise AI as several AI tools need to analyze huge volumes of information that are processed continuously. Issues related to language, context, and reasoning need to be overcome by enterprise AI. This, in turn, will impede the growth of the market during the forecast period.

Market Segmentation By Deployment:
The market share growth by the on-premises segment will be significant during the forecast period. In the on-premises deployment model, AI infrastructure is installed within the customer's premises. One of the major drivers for the growth of the segment is the increasing need for security. Buyers want to have complete control over hardware and software. Thus, they prefer on-premises AI infrastructure over cloud-based AI infrastructure. Many major clients across the world require AI infrastructure to be installed on-premises. This increases the security level of the data that is being processed. Several firms are adopting on-premises AI. 

Enterprise AI Market Size

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The on-premises segment showed a gradual increase in the market share of USD 900 million in 2018. Firms that increase their initial investments in AI enterprise infrastructure will most likely invest in storage devices that can support large amounts of information. Several firms are expected to invest large amounts in hardware and software required for enterprise AI. However, the major drawback of on-premises AI infrastructure is the upfront capital expenditure required for installation. This discourages customers from adopting on-premises AI infrastructure. This is expected to have a negative impact on the growth of the on-premises segment of the global market during the forecast period.

Market Segmentation By End-user:
AI in advertising, entertainment, and media is gaining momentum, driven by its potential in anomaly detection, personalized content creation, and marketing applications. Enterprises in this sector utilize AI solutions to cut production costs and enhance operational efficiency. The media and entertainment industry, spanning TV, print, films, advertising, animation, gaming, and music, is undergoing rapid digital transformation. AI finds extensive applications in filmmaking, aiding in script generation and promotional efforts, while emotion AI enhances gaming experiences. These use cases demonstrate AI's pivotal role in reshaping traditional business functions in the advertising, media, and entertainment domains. Numerous enterprises across the sector will focus on incorporating AI, thereby driving the growth of the advertising, media, and entertainment segment of the market during the forecast period.

Regional Overview:
Enterprise AI Market Share by Geography

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North America is estimated to contribute 37% to the growth of the global market during the forecast period. 
Technavio's analysts have provided extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. North America dominates the global market, driven by widespread AI adoption by companies like IBM, Intel, and Microsoft. Collaborative efforts in AI system development are notable, with the BFSI sector, including Wells Fargo and Bank of America, integrating AI for operational enhancement. The US government emphasizes AI's positive impact on education, healthcare, policing, and transportation. IBM's acquisition of Sentaca in 2022 and the region's booming e-commerce market further propelled market growth, enabling personalized campaigns and revenue growth for businesses during the forecast period. 

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The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their.

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