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Blog Posts — September 13, 2018

Global AI Revenue Seen Growing Twentyfold by 2025

Global revenue from the sale of artificial intelligence (AI) software may grow to $106 billion by 2025, from $5.4 billion in 2017, according to a new reportfrom Tractica, a research firm focusing on human interaction with technology.

Growth will be driven by video surveillance, management of network and information technology operations, and virtual digital assistants in the customer service and marketing areas, Tractica estimated in the report.

The AI industry is on the verge of explosive growth as more businesses outside of consumer Internet companies move to adopt the technology. At the other end, startups and technology providers are working hard to create platforms and solutions for specific enterprise problems, the firm wrote.   

“The AI market is starting to solidify around real-world applications with the pace of change being faster than it has ever been before,” the report said, arguing that while data analytics has been a major driver for AI, technologies that seek to replicate human perception based on vision and language will be a stronger source of growth in the long run.

Gaining exposure to the AI economy 

To generate accurate exposure to AI’s business impact, STOXX this year launched two AI indices with distinct methodologies: one follows a thematic approach based on revenue exposure, and the other uses a progressive concept tracking AI innovators selected by AI technology. 

The first one, the STOXX® Global Artificial Intelligence Index, is based on FactSet’s Revere industry hierarchy. Companies with the highest revenue exposure to pre-defined sectors are selected for the index. 

The second option is the STOXX® AI Global Artificial Intelligence Index, the first AI index to select its constituents by means of AI technology. The index uses an algorithm designed by STOXX partner Yewno and detects which awarded patents worldwide relate to AI. This is the metric used to identify the leaders whose AI-related intellectual property (IP) is proportionally the most relevant for their overall business as well as for the global AI landscape. 

In the past year, the STOXX Global Artificial Intelligence Index has gained 22% while the STOXX AI Global Artificial Intelligence Index has risen 17%.That has topped the 10% advance for the benchmark STOXX® Global 1800 Index.  

STOXX’s Thematic Indices family has recently grown to cover other emerging technologies. This includes the iSTOXX® Yewno Developed Markets Blockchain Index and the iSTOXX® Developed Markets B.R.AI.N. Index. The latter tracks companies that generate most of their revenue from biotechnology, robotics, AI and nanotechnology.

While computer scientists, academics and technology leaders debate on the trajectory that AI will follow in coming years, the STOXX indices aim to capture the business opportunity for companies pioneering the way in AI adoption. Accenture, the US consultancy firm, estimated in 2016 that AI will be responsible for doubling the pace of growth in 12 developed countries between then and 2035.3

Featured Indices

1Tractica, ‘Artificial Intelligence Market Forecasts,’ Q32018.  
2Total returns in dollars after taxes, Sep. 11, 2017–Sep. 11, 2018.
3Accenture, ‘Why artificial intelligence is the future of growth,’ Sep. 28, 2016.