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Forrester is downsizing its estimates for the future growth potential of Artificial Intelligence software. Previous estimates were targeting the AI market to reach into the $150 to $200 billion range by 2025. But, after reevaluation, Forrester says now that it will be closer to $37 billion, significantly less.
It’s not that AI is losing its luster. Rather, Forrester thinks that rather than implement AI by buying AI-specific tools and software, businesses will expect AI features to become standard features in existing categories of features. AI will become a feature under the hood that people will expect to just be there, and vendors will need to build into their products in order to remain competitive. That means that charging a premium for AI will become difficult because it will become a feature available from many vendors.
Andrew Bartels, VP and principal analyst at Forrester, said that “while we’re seeing high demand for AI technology, platforms, and applications, AI’s ubiquity will ultimately make the technology commonplace in software development. We believe investors are defining the AI market too hyperbolically. They are mistakenly including categories that are loosely influenced by or distantly adjacent to AI software. As business leaders rely more and more on AI as a tenet of their digital transformation strategy, they will likely expect their vendors to add AI functionality at no additional cost to them.”