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Research: AI bubble burst will ensure growth in key sectors

July 10, 2018

Rethink Research say that the AI bubble is due to burst after several years of sustained hype have generated unrealistic expectations that cannot be met and excessive investments that cannot possibly be paid back. This is the key message in the latest report out this week on AI (Artificial Intelligence) technologies from Riot Research, part of Rethink Technology Research.

The report finds the AI market will only reach $39 billion globally by the end of 2023, considerably less than most previous forecasts. The shortfall is explained by the fact that in some sectors, AI will flop dismally over the forecast period, while thriving in others.

A massive cull of VC backed start-ups in the AI marketplace is expected during 2019 and 2020, but for most this is a good thing. In the aftermath, there will be a clear pattern of AI survivors in key vertical (and horizontal) sectors. This is a predictable repeat of earlier infamous bubble burstings, such as the dotcom collapse of 2001 which lost investors billions of dollars, but from whose ashes great tech giants such as Google and Amazon emerged.

The report from Riot Research, the forecasting arm of Riot, identifies key industrial sectors in AI which will make an impact and it forecasts sector by sector growth to 2023. The report dissects the technology, the markets and the major players with indications of which will succeed.

Vertical sectors where AI will do well over the next five years are cybersecurity, automotive, healthcare manufacturing and finance and insurance – with the verticals market reaching $24.8 billion by 2023. Two major horizontals – machine vision and natural language processing – will reach $14.1 billion and $15 billion respectively, totaling $29 billion between them. But about half of the horizontal AI market overlaps with the vertical market because both machine vision and natural language for example are part of the overall AI being delivered.

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