AI Software Market Sizing: Understand Forrester’s Four Segments To Invest Wisely

Forrester forecasts that the size of the AI software market will be $36 billion by 2025. That’s smaller than many investors and other analysts have projected. However, we believe our projection is more realistic because most business applications are adding AI functions without monetizing them and because the custom-built AI applications that businesses create don’t generate market revenues. Investors, vendors, and buyers who wish to understand and/or invest in the AI software market must understand Forrester’s four segments: AI maker platforms, AI facilitator platforms, AI-centric applications, and AI-infused applications.

Key takeaways:

• Forrester has defined four AI software segments: 1) AI maker platforms for general-purpose AI algorithms and data sets; 2) AI facilitator platforms for specific AI functions like computer vision; 3) AI-centric applications and middleware tools built around AI for specialized tasks like medical diagnosis; and 4) AI-infused applications and middleware tools that differentiate through advanced use of AI in an existing app or tool category.
• AI is fast becoming as fundamental to software as software has become to business. As a result, AI software will partly be a new category of the overall software market but also will be embedded into existing software products. This absorption process will temper the overall size of AI software to $36 billion by 2025.

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