China may well become the largest digital economy and overtake the United States this year
Worldwide spending on cognitive and AI is expected to rise from $12bn in 2017 to $57.6bn in 2021.
Outside technology, AI growth is more contained but good progress has been made in nearly every sector
Artificial Intelligence (AI) is nothing new – it was born 70 years ago. However, it is only recently that the most significant breakthroughs have been recorded, with the advent of cloud computing, big data, high-powered computing, machine learning and deep learning.
Little by little, machines are learning from humans and we are reaching a point where they are capable of thinking faster than us (Google), recognizing our friends and family (Facebook), taking orders (Apple’s Siri), anticipating our needs (Amazon) and driving our cars (Tesla), among other things. And the more information we provide via the data generated by devices, the more algorithms can learn and the stronger AI contributions will be next time.
The development of deep-learning algorithms implies that the countries with the most successful coders, best data analysts and largest populations will take the lead. With 1.4bn citizens generating masses of data daily, China may well become the largest digital economy and overtake the United States this year, a recent Statista study says. The country has already passed the US in the ranking of new patent applications and licensing, according to the Wuzhen Institute. To attempt to keep up, French president Emmanuel Macron announced on 29 March a €1.5bn plan over the next five years to boost data sharing and AI development in Europe.
The market is growing fast and IDC estimates that worldwide spending on cognitive and AI will rise from $12bn in 2017 to $57.6bn in 2021, or a compound annual growth rate of 50.1% over the period (see chart). Given a key success factor is the amount of data that firms have access to and their ability to analyse it, the digital giants dominate the market, naturally. According to McKinsey, they invested $20-30bn in AI in 2016, of which 90% on Research and Development (R&D) and deployment, while start-ups spent $6-9bn.
AI is so disruptive that it has raised concerns that machines could replace low-skilled workers. There is also growing discontent about data usage and the lack of transparency and privacy.
In other sectors, AI growth is more restrained but good progress has been made in nearly every domain. Healthcare, energy, agriculture, finance, media & advertising, retail and transport are all developing AI solutions that will optimise decision-making, lower costs and solve complex issues. For instance, robo-advisors and digital payment systems are deployed in financial services while farmers can achieve more sustainable yields and reduce water consumption through better data analysis.