AI DISRUPTION
By Enterprise Type Insights
• Large Enterprises:
o In 2024, large enterprises captured a significant AI market share.
o IBM reports 42% of large enterprises have implemented AI.
o 59% of IT professionals in these firms confirm active AI deployment.
• Small and Medium-Sized Enterprises (SMEs):
o SMEs are projected to register the highest CAGR.
o SAP suggests SMEs may see a 6–10% revenue increase through AI integration.
o AI enhances innovation in areas like financial management, sales, HR, and product
development.
By Function Insights
• Dominant Function: Service Operation
o In 2024, service operations led the market.
o A BMC survey reveals 69% of firms use AI in IT Service Management and Operations
(ServiceOps).
o Objective: improving problem-solving speed and operational efficiency.
• High-Growth Functions:
o Risk, supply chain, and marketing/sales are adopting AI rapidly.
o These functions leverage AI to enhance customer experience and efficiency.
By Technology Insights
• Leading Technology: Machine Learning
o Machine learning dominated the market in 2024.
o Forecasted CAGR is highest among AI technologies.
o Fortune Business Insights estimates the global ML market will hit USD 50 billion by 2025.
• Natural Language Processing (NLP):
o Strong growth expected due to use in IVRs, chatbots, virtual assistants, etc.
o NLP aids real-time translation, data collection, and enhances productivity.
By Industry Insights
• Leading Industry: IT & Telecom
o Held the highest market share in 2024.
o Growth driven by cloud migration and big data analytics.
• Fastest-Growing Industry: Healthcare
o AI is transforming patient care and admin efficiency.
o IBM study: 64% of patients accept AI-based support.
o Nature Medicine study: AI helps detect incorrect medication usage, potentially affecting
70% of insulin users.
Regional Outlook
• North America:
o 2024 Market Size: USD 76.89 Billion.
o Dominated due to hyper scalers like IBM, Microsoft.
o In 2023, 25% of U.S. startup investments went to AI.
o 542 U.S. AI companies raised >USD 1.5M each.
o U.S. Generative AI market reached USD 22.5B in 2024.
• Asia Pacific:
o Estimated to have the highest CAGR.
o India’s 2024 AI Index: 2.47 (vs. 2.45 in 2022).
o AI may add USD 500B to India’s GDP by 2025.
o Market size in India expected to reach USD 17B by 2027.
• Europe:
o AI adoption fueled by public/industrial data.
o U.K. ranked 4th globally in private AI investment in 2023.
o London leads AI development and talent pool.
• Middle East & Africa:
o Annual growth rate projected between 20% and 34%.
o UAE shows fastest AI market growth.
• South America:
o Moderate growth expected.
o Brazil leading in digital business AI integration.
Competitive Landscape
• Key Players:
o Microsoft Corporation, [Link] Inc., IBM, Alphabet Inc., NVIDIA, Oracle, Huawei,
[Link], Baidu.
• Strategies:
o Mergers, acquisitions, and partnerships for advanced capabilities.
o Focus on generative AI product upgrades.
Number of days taken to reach 1bn users.
Link- Artificial Intelligence [AI] Market Size, Growth & Trends by 2032
Sectoral Transformation of Artificial Intelligence (AI)
Artificial Intelligence (AI) has emerged as a transformative force across multiple sectors, significantly
reshaping how industries operate and deliver value. Over the last two decades, AI has contributed to
advancements in healthcare, education, manufacturing, logistics, finance, and more, enhancing
efficiency, accuracy, and innovation (Gwagwa et al., 2020; Patil et al., 2023).
Creative Destruction and Sectoral Disruption
AI is a classic example of Schumpeterian “creative destruction,” where innovations render existing
technologies and business models obsolete. From Uber disrupting traditional taxis to AI algorithms
replacing manual trading or legal analysis, AI is displacing jobs in some areas while creating new
opportunities in others (Laverty & Littel, 2020). These transitions mirror historical shifts like the move
from horse-drawn carriages to automobiles.
Empirical Impact Across Industries
• Manufacturing & Engineering: GE's AI tools reduce machine failure by 10–15% and maintenance
costs by up to 30%. Siemens reports a 30% decrease in production errors and a 20% rise in
productivity.
• Retail & E-commerce: Amazon's AI recommendation engines boost revenue by 20%, while
Walmart achieves a 10–15% reduction in inventory costs using AI-based supply chain
optimization.
• Finance: Goldman Sachs leverages AI to enhance trading speed by 10% and fraud detection
accuracy. JP Morgan has cut legal document review times by 80%.
• Healthcare: IBM Watson improves diagnosis accuracy by 20%. DeepMind’s system hits 94%
accuracy in eye disease diagnosis. AI enables predictive diagnostics and accelerates drug
development.
• Logistics: DHL and UPS use AI for route and logistics optimization, reducing operational and fuel
costs by up to 20%.
• Energy: Shell and ExxonMobil apply AI for energy forecasting and drilling, achieving energy
savings and operational efficiency gains.
Market Size and Investments
The global AI market, valued at $95.6 billion in 2021, is forecasted to reach $1.85 trillion by 2030
(Valavanidis, 2023). Major tech companies such as Apple, Google, Microsoft, and Amazon are
aggressively investing in AI, with Apple acquiring 29 AI startups since 2010.
Applications and Classification
AI technologies span across machine learning, computer vision, natural language processing, robotics,
and more. Its applications extend to sectors including:
• Healthcare: AI supports diagnostics, virtual care, cost efficiency, and remote health monitoring.
• Education: Personalized learning platforms use AI to adapt to student needs, enhancing learning
outcomes.
• E-commerce: AI improves customer experience through tailored recommendations and real-
time insights.
• Industry 4.0: Integration with cyber-physical systems enables predictive maintenance,
automation, and real-time decision-making in manufacturing (Javaid et al., 2021).
Challenges to Adoption
Despite significant potential, AI adoption remains limited beyond pilot projects in many industries.
Challenges include secure data handling, integration with legacy systems, cost, and workforce reskilling
(Williamson & Vijayakumar, 2021).
Link - Creative destruction and artificial intelligence: The transformation of industries during the sixth
wave - ScienceDirect
