Being one of the most progressive technologies, artificial intelligence has seen rapid growth in recent years in various fields including the automotive industry. The market value of artificial intelligence is valued at $3.5 billion presently and is expected to reach the valuation of $26.4 billion by 2023. In the next 5-7 years, AI is expected to replace the human workforce by 50 percent which will eliminate almost 2 million jobs. One in five workers is expected to use AI technology by 2022. The automotive AI market is driven by the increased use of artificial intelligence in the automotive industry.
Artificial intelligence is a highly progressive technology which has found varied applications in computer science. AI involves copying of human intelligence by machines and displaying similar characteristics including learning, understanding, reasoning, problem-solving and many others. Although there is a wide range of underlying challenges in the development of this technology, the automobile industry has the greatest potential to drive the growth of AI market in the future. Next generation software technologies are expected to be highly dependent on artificial intelligence. Leading companies such as Google, IBM and Microsoft are implementing AI actively in their products and services.
Artificial Intelligence in the Automotive Industry
The automotive industry is one of the biggest industries making use of artificial intelligence in augmenting and mimicking human actions. The automotive industry is further applying AI with the innovations including adaptive cruise control, driver assistance systems, and the requirement for convenience features. Blind spot technology is one other feature further attracting the use of artificial intelligence in the automotive market. The demand for convenience features and autonomous vehicles is rapidly increasing which in turn has resulted in the growth of artificial intelligence in the automotive area. The rise in cybercrime, however, might hinder the AI automotive market growth.
The various other factors in the growth of automotive AI market include the emergence of cloud-hosted intelligence, the demand for driver assist features and internet of things.
Artificial Intelligence Market Size
The global artificial intelligence market size is estimated to expand at a CAGR of nearly 40 percent. The largest adopters of AI in the global market are in North America. North America is having the highest revenue share of 40 percent in the global market followed by Europe. In the next 5-7 years, the Asia Pacific region is also expected to emerge as a lucrative market. Innovative products and services offered in the automotive industry are the main reasons for the emergence of AI-based technology. Due to the high level of process automation and increased use of cloud-based services, the AI market has seen growth in countries such as the U.S., China, India, and Germany.
The AI market is expected to grow at a high rate in North America by 2022. With a large number of start-ups in the country, the market in countries like the U.S. is highly fragmented and further the market is expected to undergo consolidation in the next few years.
Automotive Artificial Intelligence Market
The market is divided into segments based on technology, component, application, and region. It is segmented into semi-autonomous and autonomous based on its application. It is also segmented on the basis of technology into machine learning, computer vision, and natural language processing. The convenience features and demand for enhanced user experience are the key reasons for the rising trend of AI in the automotive industry. Also, the rising demand for security services and privacy concerns of people further result in more autonomous AI based vehicles.
The major drivers for the AI market in the automotive industry are the increased popularity of autonomous vehicles with features like automatic parking, autopilot, self-driving etc. This reduces human efforts and results in a more convenient experience. The failure is also minimum as the technologies in these vehicles are generally powered by top companies including Nvidia, Intel, and Tesla. One of the most advanced systems available in the market is offered by Tesla in which features available include auto changing the lane, keeping the vehicle within a lane, self-parking etc. Human intervention is also brought down significantly with the introduction of these autonomous vehicles. Also, for transportation services fewer human resources are required, which have further resulted in driving the growth of AI in the automotive industry.
Apart from having various driving forces, the market also faces some constraints in its growth. But some privacy concerns including no safety of personal data and cyber attacks are some of the threats faced by manufacturers. Also, driver distraction is another constraint in its market growth.