Forecasts a 15-fold revenue increase for the AI industry, with revenues expected to rise from $18 billion in 2022 to $420 billion in 2027
UBS predicts that the artificial intelligence (AI) industry will grow into a $225 billion market by 2027. This represents a significant jump from the projected $2.2 billion market size in 2022, indicating a near 152% compound annual growth rate.
UBS also forecasts a 15-fold revenue increase for the AI industry, with revenues expected to rise from $18 billion in 2022 to $420 billion in 2027. This revised forecast represents a 40% upside revision from UBS's earlier projections and reflects stronger-than-expected demand for AI software.
The increased demand for AI software is expected to fuel a 138% compound annual growth rate for the application sector. UBS believes that the recent rollouts of numerous AI applications, such as copilots and features like Turbo and vision from OpenAI, have marked a significant milestone for the industry.
In addition to the growth in AI software, UBS identifies AI infrastructure spending as a contributing factor to the industry's momentum. The note mentions that spending on AI infrastructure is expected to grow from $25.8 billion in 2022 to $195 billion in 2027.
UBS highlights that hardware chips and graphics processing units (GPUs) used for training and running AI algorithms will be among the biggest beneficiaries of increased spending. This is forecasted to create a tenfold boost for semiconductor and platform firms, resulting in industry revenues surging from $15.8 billion to $165 billion.
Overall, UBS views AI as the "tech theme of the decade" and expects it to be one of the fastest-growing and largest segments within the global tech industry.
Information based on content from Yahoo Finance article.