Artificial intelligence will be worth $4 billion to business in four years

The majority of growth will come in the next two years

The business value of artificial intelligence worldwide will rise 70 per cent this year to $1.2 trillion, and end 2022 at $3.9 trillion, says Gartner.

The research firm splits the sources of ‘business value' into customer experience (the positive and negative effects on indirect cost; an important precondition for AI adoption), new revenue and cost reduction.

AI will follow a typical value growth curve, starting strong with 70 per cent YoY growth in 2018, before flattening in 2020 to 39 per cent ($2.6 billion) and slowing significantly towards the end of the forecast period (17 per cent in 2022).

Advances in areas like computational power, data volume and deep neural networks (DNNs) will drive AI over the coming years, said research VP John-David Lovelock. He added, "One of the biggest aggregate sources for AI-enhanced products and services acquired by enterprises between 2017 and 2022 will be niche solutions that address one need very well. Business executives will drive investment in these products, sourced from thousands of narrowly focused, specialist suppliers with specific AI-enhanced applications."

In the early years, AI will focus on customer experience as the primary source of business value, used to improve all customer interactions with the goal of increasing both growth and retention. Lovelock said:

"CX is followed closely by cost reduction… However, in 2021, new revenue will become the dominant source, as companies uncover business value in using AI to increase sales of existing products and services, as well as to discover opportunities for new products and services. Thus, in the long run, the business value of AI will be about new revenue possibilities."

What will the market look like in 2022?

Decision support and augmentation (such as DNNs) will represent 36 per cent of global AI-derived business value this year, but will grow to 44 per cent by 2022 - overtaking all other types of AI initiative.

"Such capabilities have a huge impact on the ability of organisations to automate decision and interaction processes," said Lovelock. "This new level of automation reduces costs and risks, and enables, for example, increased revenue through better microtargeting, segmentation, marketing and selling."

While virtual agents - which can take over simple tasks from humans, such as operating service desks and call centres - are currently a much higher proportion of business value than decision support (46 per cent this year), the maturation of other AI types will shrink that contribution to 26 per cent in four years' time.

Decision automation is the use of AI to automate tasks or optimise business processes: translating voice to text, processing handwritten forms and otherwise helping to organise unstructured data. This is a staple of the corporate world, and Gartner has predicted an increase in AI business value from two per cent to 16 per cent by 2022.

Finally, there will be little change in the proportion of value derived from so-called smart products. Today these products, which have AI embedded in them, represent 18 per cent of value, and will fall to 14 per cent in 2022.