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Market Sensitivity Analysis

We acknowledge that market projections for novel, transformative technologies are subject to a considerable degree of uncertainty. Likewise, among existing researcher forecasts, there exists a wide range of estimates for the impact that AI technologies will generate in the next decade. For example, AI has the potential to considerably change the way industries operate at-scale and could generate an additional $15.7 Trillion for the global economy 1. Another industry report projects anywhere from $80 to $205 Trillion in productivity gains in 2030 2. Whereas, the collection of the six market sizing reports used in our modelling converges at a median market size of $1.8 Trillion for the year 2030 3. It is clear that the impact of AI will be huge, but with this much variability in estimates, "how big?" is not obvious from today's vantage point.

Considering the above, we have undertaken steps to pressure test the modelling herein. For the most sensitive variables in each market sizing approach, we have evaluated the impact of incremental increases or decreases.

Market-Sensitivity-Analysis

By examining alternative assumptions about the future, we can uncover scenarios where our market size estimates would differ from the base case. The above sensitivity analysis highlights that Method One involves the greatest margin of error. This variability comes from the range of different potentials for the 2030 AI market size, which we have seen range from as low as $1 Trillion to as high as $14 Trillion. Below are three additional interpretations of our sensitivity analysis, exploring deviations that could impact each modelling approach.

  • In our view, the median 2030 forecasts of the global AI market from global market research firms potentially underestimates the potential of AI by a significant degree. If AI technologies were to produce industry-revolutionising changes five times larger than the base case inputs ($9 Tr), our Method One forecast for the AIAT market would reach $1 Trillion by 2030.

  • It's possible that industry adoption and deployment of AI technologies has a slower roll-out than we expected. Our modelling predicts a similar rate of adoption to that of smartphones—the latest platform shift from transformative technology—given the recent and rapid adoption of Generative AI models. If the percentage of global AI technology adoption was only half as much (32%), instead we might expect the Method Two AIAT market size to arrive at a more conservative, yet still sizable $103 billion by 2030.

  • Companies everywhere are signalling rising IT budgets due to investments in AI, it is possible that the proportion of IT budgets allocated to AI-related expenditures exceeds our base case estimates. Additionally, AI regulations are a major driver of the AIAT market and will have a substantial influence on the market floor. While we have estimated GRC budgets of a similar proportion to the Banking, Financial Services, and Insurance (BFSI) sector, it is possible this is an overestimation. In 2030, if annual AI-related expenditure as a percentage of IT budgets slightly increased above our estimates to 41%, but average GRC budgets were only half of our original expectations (3.5% of revenue), the Method Three AIAT market size would result in a $176 billion forecast.

Footnotes​

  1. PwC. "Sizing the Prize: What's the Real Value of AI for Your Business and How Can You Capitalise?" 2017. Accessed April 4, 2024. https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html ↩

  2. ARK Invest. Big Ideas 2023. January 31, 2023. Accessed April 1, 2024. https://global-uploads.webflow.com/620eae7f59bd2807fc4150b0/63eaa036707137302b27c383_ARK%20Invest_013123_Presentation_Big%20Ideas%202023_Final.pdf ↩

  3. Median of: Precedence Research. "Artificial Intelligence Market." Accessed March 4, 2024. https://www.precedenceresearch.com/artificial-intelligence-market; Grand View Research. "Artificial Intelligence (AI) Market." Accessed March 4, 2024. https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market; Fortune Business Insights. "Artificial Intelligence (AI) Market." Accessed March 4, 2024. https://www.fortunebusinessinsights.com/industry-reports/artificial-intelligence-market-100114; IDC Media Center. "Worldwide Spending on AI-Centric Systems Forecast to Reach $154 Billion in 2023, According to IDC." IDC. March 7, 2023. Accessed March 4, 2024. https://www.idc.com/getdoc.jsp?containerId=prUS50454123; Nextmsc. "Artificial Intelligence Market." Accessed March 4, 2024. https://www.nextmsc.com/report/artificial-intelligence-market; MarketsandMarkets. "Artificial Intelligence Market Worth $407.0 Billion by 2027 - Growing at a CAGR of 36.2%." GlobeNewswire. May 17, 2023. Accessed March 4, 2024. https://www.globenewswire.com/en/news-release/2023/05/17/2671170/0/en/Artificial-Intelligence-Market-Worth-407-0-Billion-By-2027-Growing-At-A-CAGR-Of-36-2-Report-By-MarketsandMarkets.html ↩