 "Market for AI to touch $1 trillion by 2027, will grow by 40-55% YoY: Bain & Co")
The global market for AI-related products is on track to experience explosive growth, potentially reaching up to $990 billion by 2027, according to a recent report by Bain & Co. As AI technology continues to integrate into various sectors, its rapid adoption is set to transform businesses and economies on an unprecedented scale.
In Bain & Co’s latest Global Technology Report, the consulting firm predicts that the AI market, which includes both services and hardware, will grow by 40 per cent to 55 per cent annually. This surge will propel the market from $185 billion in 2022 to somewhere between $780 billion and $990 billion by 2027.
The driving force behind this expansion is the increasing development of advanced AI systems and the construction of massive data centres needed to support these technologies.
However, this rapid growth comes with its own set of challenges. Bain warns that the soaring demand for AI could strain global supply chains, particularly for essential components like semiconductors.
As companies and governments race to adopt AI, the pressure on supply chains might lead to shortages in key technologies, including chips, personal computers, and smartphones. The report also highlights that geopolitical tensions could further complicate these supply issues.
The demand for chip components, particularly for integrated circuits and related intellectual property, is expected to spike by over 30 per cent by 2026. This increase will likely put significant pressure on manufacturers.
Impact Shorts
More ShortsMoreover, the average cost of building large-scale data centres, currently ranging from $1 billion to $4 billion, is predicted to skyrocket to between $10 billion and $25 billion as these centres expand their capacity to accommodate the growing demands of AI.
These developments will have far-reaching implications for the infrastructure that supports data centres, including areas like power production, cooling systems, and engineering. As companies move beyond mere experimentation and begin integrating AI into their operations on a large scale, there’s a growing interest in more efficient, smaller AI models.
These models, which offer cost and privacy benefits, are becoming increasingly appealing to both businesses and governments.
Around the world, governments in countries like Canada, France, India, Japan, and the United Arab Emirates are pouring billions into AI. They’re focusing on building domestic AI capabilities, investing in infrastructure, and developing AI models that are trained on local data.
However, Bain’s Anne Hoecker notes that establishing these sovereign AI ecosystems will be a lengthy and expensive process.
As AI technology continues to evolve, it’s clear that both companies and governments are gearing up for what could be a major shift in how we approach everything from business operations to technological innovation. The race to harness AI’s full potential is just beginning, and the stakes have never been higher.
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