Global AI Market Projected to Reach $6 Trillion Annually by 2031
Bain & Company's 7th Global Technology Report forecasts the global AI market could generate up to $6 trillion in annual revenue by 2031, driven largely by innovation beyond employee productivity. The report highlights that while existing applications like consumer and enterprise AI may contribute between $1.2 trillion and $1.8 trillion, new categories such as autonomous systems, physical AI, model providers replacing search engines, and undiscovered markets will account for the remaining $4.2 trillion. The surge in demand for AI compute has revitalized hardware sectors like semiconductors, with these stocks growing at a 24% annual rate from 2020 to 2026 compared to just 6% for software companies. High-bandwidth memory (HBM), advanced packaging, and custom silicon are among the fastest-growing segments. However, supply chain risks including geopolitical tensions and natural disasters are prompting firms to diversify suppliers. David Crawford of Bain emphasizes that AI infrastructure requires a new wave of innovation akin to what mobile or cloud computing unlocked in previous decades.
Topics: Artificial Intelligence Cybersecurity Hardware Investment Semiconductors