Bain says AI market will grow to nearly $1 trillion by 2027
According to Bain & Co., the global market for AI-related products is growing explosively and is expected to reach $990 billion (approximately Rs 82,75,424 crore) by 2027 as the rapid adoption of the technology disrupts both businesses and economies.
The market, including services and hardware related to artificial intelligence (AI), will grow by 40 to 55 percent annually from $185 billion (approximately Rs. 15,46,356 crore) last year, the consulting firm said in its fifth annual Global Technology Report released on Wednesday. That will lead to revenues of $780 billion (approximately Rs. 65,19,774 crore) to $990 billion (approximately Rs. 82,75,424 crore), Bain said.
Growth will be fueled by larger AI systems and larger data centers to train and run them, driven by companies and governments using the technology to increase efficiency. Demand is rising so fast that it will strain supply chains for components, including chips needed to run the services, Bain said. Combined with geopolitical tensions, rising sales could lead to shortages of semiconductors, personal computers and smartphones, Bain warned.
Demand for upstream chip components such as integrated circuit design and related IP could rise by 30 percent or more by 2026, putting pressure on manufacturers, Bain said. The cost of larger data centers could rise from $1 billion (about Rs. 8,358 crore) to $4 billion (about Rs. 33,436 crore) now to between $10 billion (about Rs. 83,590 crore) and $25 billion (about Rs. 2,08,977 crore) in five years as their capacity is expanded from 50-200 megawatts to more than a gigawatt at present, it said.
“These changes are expected to have significant impacts on the ecosystems that support data centers, including infrastructure engineering, energy production and cooling,” the consultancy said in a statement.
Companies are moving beyond the experimentation phase and beginning to scale generative AI across their operations, Bain said. Small language models, similar to the large language models that led to the creation of OpenAI’s ChatGPT chatbot but lightweight and efficient, could become the preferred choice for companies and countries amid concerns about cost and data privacy.
Governments including Canada, France, India, Japan and the United Arab Emirates are spending billions of dollars to subsidize sovereign AI, investing in domestic computing infrastructure and AI models created and trained on native data within their borders. But building successful sovereign AI ecosystems will be time-consuming and expensive, says Anne Hoecker, head of Bain’s Global Technology practice.
© 2024 Bloomberg LP
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