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AI Market Forecast: Top Trends That Will Affect AI in 2024

The future of artificial intelligence is looking brighter than ever.

Last year saw generative AI capture the public’s attention with the wide release of ChatGPT, and experts predict significant growth for the generative AI market over the coming years. According to research firm 451 Research, the market’s revenue is expected to grow at a compound annual growth rate (CAGR) of 57.9 percent to reach a valuation of US$36.36 billion by 2028.

In the Future of Jobs Report 2023, roles in AI and machine learning were named as some of the fastest-growing. This rapid growth and increasing demand for AI skills illustrates that AI is poised to play an increasingly important role in shaping the future of many industries.

Increased integration of GenAI

Looking ahead, the potential of AI to drive innovation and efficiency in many industries is only set to grow. More and more businesses are adopting AI, as it promises significant cost savings. According to the Bank of America Global Research in November 2023, AI will have a “mild-to-strong” positive financial impact on 75 percent of companies surveyed in the next five years.

In terms of project management, some of the ways in which AI is assisting include analyzing large data sets, offering more accurate predictions, automating services and tasks and providing sophisticated virtual customer support.

As businesses continue to adopt AI-powered solutions and technologies, analysts are expecting to see even greater advances in areas like healthcare and climate modeling.

The intersection of AI in healthcare is driving significant growth in this industry, with the market expected to reach around US$188 billion by 2030, according to Statista. As AI becomes more prevalent in healthcare, it is enabling breakthroughs in fields like neuroscience, genomics and biotech. Quantum computing, in particular, is playing a key role in these advances, as it allows for faster and more accurate analysis of large data sets, enabling researchers to map genes and brains and discover new drugs more efficiently.

In addition to its impact on healthcare, quantum computing is also being used to tackle complex problems in climate modeling, enabling scientists to better understand and predict the effects of climate change.

Expansion of edge computing

As AI technologies become more prevalent and advanced, the importance of edge computing is set to grow in 2024, according to the 2024 TMT Predictions presented by Deloitte Insights. The shift toward edge computing could also lead to a focus on the semiconductor and hardware industries, beyond only GPU makers.

“As organizations deploy newly developed AI applications, they will see in many cases the need for inference to happen at or closer to the edge, avoiding network latency,” pgEdge co-founder and CEO Phillip Merrick told Solutions Review.

Edge computing, which involves the processing and analyzing of data closer to where it is generated, will play a crucial role in enabling faster decision-making and improved AI performance. The Consumer Electronics Show, which will be held in Las Vegas from January 9 to 12, is expected to showcase a range of AI-powered products.

As the need for more sophisticated AI capabilities grows, so does the importance of a robust and secure supply chain for the semiconductors and chips that power these technologies.

The chip shortage has been a significant challenge for the tech industry in recent years. “Every year, the demand for semiconductors and chips increases, meanwhile, countries are just waking up to the importance of growing manufacturing and safeguarding supply chains,” said Naseem Husain, senior vice president and strategist for Horizons ETFs, to INN.

The ongoing trade tensions between the US and China are expected to have a continued impact in 2024, as is the upcoming Taiwan election on January 13. Taiwan is a key player in the global semiconductor industry, supplying chips to many of the world’s leading tech companies, including NVIDIA (NASDAQ:NVDA). NVIDIA is the clear leader in the chip market, with a strong presence in AI and other emerging technologies, and the company has also developed edge computing solutions based on its GPU technology.

However, the other "Magnificent Seven" tech giants currently dominating the stock market are also investing in chip making, creating specialized chips for their cloud-based products. While these companies may not pose an immediate threat to NVIDIA’s dominance in the GPU market, they could potentially become more competitive in the future.

At the same time, established semiconductor companies such as AMD (NASDAQ:AMD), Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) are also making strides in the AI and edge computing spaces. Their products, which include GPUs and edge devices that are applicable across a range of industries and use cases, could eventually challenge NVIDIA’s market dominance. And, according to the iShares 2024 Thematic Outlook, there may still be attractive opportunities for investors to find undervalued stocks in the smaller and mid-cap space.

Finally, the emergence of neuromorphic chips, which are designed to mimic the functioning of the human brain, could also create new opportunities and challenges for semiconductor companies in the future. In October, IBM (NYSE:IBM) unveiled a prototype of its neuromorphic chip, NorthPole, a project that developers say “delivers massive improvements in energy, space and time efficiencies.”

Overvalued market?

While AI has been touted as a game-changer in many industries, some analysts believe that the hype surrounding AI may have reached its peak, and the growth of the industry may face challenges in the future. A recent poll by 451 Research revealed that public concerns regarding the impact of AI on the job market and society increased between Q4 2022 and Q2 2023, and CCS Insight predicts that AI may face a “cold shower” in 2024 as the industry grapples with the realities of bringing AI to market responsibly and sustainably.

Josh Koenig, CSO at Pantheon, told Solutions Review, “(I) predict we’ll see some high-profile failures that puncture the narrative, and a lot of companies will cut or scale back investments as real-world applications are harder to find than initially thought. Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and OpenAI will keep trucking, as will the open-source alternatives, but it’ll be a while before we hit the ‘Slope of Enlightenment.’”

While the largest tech companies can afford to weather these challenges, smaller startups may struggle to stay afloat.

Investor takeaway

The future of AI looks promising with significant growth expected in the generative AI market and increasing demand for AI skills. The adoption of AI by enterprises is set to increase, leading to more advances in areas like healthcare and climate modeling.

“In an emerging industry, competition is a critical part of the story,” Husain said. “In 2023, we saw many new entrants arrive into the AI arena – many of which are the product of established technology companies. While it’s a race to see who can develop the best AI technology, it will also be a matter of which product has the greatest consumer potential. I would look to see not just who is fielding the most impressive technology but who is offering a vision for how their AI models can transform the lives of individuals, for the better.”

While there may be some concerns surrounding AI, the opportunities it represents can’t be denied. As AI evolves and improves, its impact could lay the foundation for even more exciting innovations.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: ARway.ai, Adisyn and Nextech3D.ai are clients of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


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