New Delhi: The Artificial Intelligence (AI) market in India is expected to grow at a five-year compound annual growth rate (CAGR) of 20.2% with total revenues reaching $7.8 billion by 2025. The businesses in India will accelerate the adoption of both AI-centric and AI non-centric applications for the next five years, according to IDC’s new report.
The IDC report provides comprehensive coverage of the state of artificial intelligence (AI) adoption in India – covering hardware, software, and services markets.
Amongst the three categories, the 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.
The report finds that organisations in India are leveraging multiple AI applications such as CRM, ERM, and others. They use these applications to manage operations, scale supply chains in response to real-time or predicted demands, and others to provide customer benefits, improve ROI and achieve cost savings.
“Indian organisations 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,” said Rishu Sharma, Associate Research Director, Cloud and AI, IDC India.
“Increasing business resilience and enhancing customer retention are among the top business objectives for using AI by Indian enterprises,” added Sharma, on the AI market in India.
The report also demonstrates the state of organisations’ 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.
IDC’s India AI market report provides a glimpse of different data types that are being processed by the organisations for their AI/ML solutions. About 51% 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,” said Swapnil Shende, Senior Market Analyst, AI.
Organisations must focus on getting high-quality training data for AI/ML models, as this would define the success of their AI initiatives,” added Shende.
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% in 2020.
- Indian organisations 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.