Global AI Market Could Surpass $350 Bn by 2027 — IT Industry Body Report

Indian IT trade body Nasscom’s latest report "AI Powered Tech Services: A Roadmap for Future Ready Firms," reveals that the global AI market is expected to reach US$ 320-380 billion by 2027, with generative AI comprising approximately 33% of the market.

The current market, valued at approximately US$ 100 billion, is projected to reach US$300-320 billion by 2027, with $83 billion invested in AI in 2023. The report was created in collaboration with Boston Consulting Group.

Key Highlights of the Report

Exemplary firms in the tech sector have extended their services beyond traditional IT offerings, developing innovative AI-based solutions and platforms. Notably, 30% of these players have expanded into offering generative AI advisory and custom model finetuning services, contributing to market penetration and revenue diversification.

Successful companies have achieved a substantial 20%+ AI and 5%+ generative AI-linked client portfolio, with up to 10 productionized generative AI use cases, surpassing the industry average of 4-5. These use cases span customer experience, marketing content generation, generative AI-enabled Software Development Life Cycle (SDLC), claims management, and fraud detection.

Factors contributing to the success of these firms:

Firstly, they recognize the critical role of human capital in the AI journey, investing significantly in upskilling and reskilling their workforce, with some allocating US$1 billion over the next three years for this purpose.

Secondly, they establish AI Centers of Excellence (CoE) with dedicated leaders to drive AI business, ensuring a holistic approach to building and prioritizing use cases.

Furthermore, successful firms have adopted a unified generative AI platform with ready integrations, allowing them to rapidly deploy Proof of Concepts (PoCs) based on client needs. Paid soft launches are employed as a common Go-to-Market (GTM) strategy, providing early results to clients and fostering co-creation processes. Strategic alliances with both tech giants and niche startups also play a crucial role in expanding capabilities.

Overview of AI talent and market

The market overview indicates a growing demand for AI talent in India, with a 15% growth rate. India boasts three times more AI-skilled talent than other countries, experiencing a 14 times higher growth in AI-skilled individuals over the last seven years.

Imperatives for AI acceleration

The report highlights three key imperatives for tech services players to accelerate their AI journey.

Firstly, a well-defined GTM strategy tailored to client needs is essential.

Secondly, a focus on upskilling in both technical and business acumen is crucial, extending beyond delivery teams to sales, pre-sales, and internal functions.

Lastly, a fundamental rethink of the operational model is imperative, aligning with the dynamic changes in the tech landscape.

Methodology

The focus of the report is on technology service providers, particularly in India, as they navigate the challenges and opportunities presented by AI and generative AI. The study employs a six-dimensional framework to evaluate the AI maturity landscape, covering aspects such as AI for clients, vision, governance, operational models, people, technology, and data.