Saturday, May 18, 2024

One-Third of Technology Providers Investing $1M or More on AI Within Two Years

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

STAMFORD, Conn. — A recent report shows that one-third of technology organizations are planning to invest $1 million or more on artificial intelligence (AI) technologies over the next two years.

The report by Gartner, “Emerging Technologies: AI Technology Spending in 2021 — Survey Trends,” also shows the vast majority of survey respondents (87%) who view AI as a major investment area believe industry-wide funding for AI will increase at a “moderate to fast pace” through 2022, according to the firm last month.

“Rapidly evolving, diverse AI technologies will impact every industry,” said Errol Rasit, managing VP, Gartner. “Technology organizations are increasing investments in AI, as they recognize its potential to not only assess critical data and improve business efficiency, but also to create new products and services, expand their customer base, and generate new revenue. 

“These are serious investments that will help to dispel AI hype.”

AI investment focus

The report shows that AI technologies have the second-highest mean funding allocation among other “emerging technologies,” such as cloud and the Internet of Things (IoT).

Technology organizations planning to invest in AI expect to spend the most on four areas on average: computer vision, $679,000; AI-generated composite applications, $624,000; AI-augmented software development, $584,000; and AI data and analytics, $565,000.

“Very few respondents reported funding amounts of less than $250,000 for AI technologies, indicating that AI development is cost-intensive compared to other technology innovations,” Rasit said. 

“This is not an easy segment to enter, due to the complexity of building and training AI models.”

See more: Artificial Intelligence Market

“Immaturity” of AI a barrier to development and adoption

The findings in “AI Technology Spending” highlight the “relative immaturity of AI technologies compared to the other innovation areas,” Gartner said.

For instance, 41% of respondents said AI is still “in development or the early adoption stages,” while about half reported “significant target customer adoption” of their AI-enabled products and services.

The responses suggest there’s “a wave of potential adoption,” as new or augmented AI products and services are available, according to Gartner.

Companies investing in AI said the top reason for failure when integrating an emerging tech is technology immaturity. 

Product leaders said the main hindrances to their progress in AI implementations are product complexity and a lack of skills.

“These survey responses reflect the difficult cycle of developing AI technology, given its complexity as well as industry-wide challenges in hiring AI talent due to the finite number of skilled individuals,” Rasit said.

See more: Artificial Intelligence: Current and Future Trends

Report methodology

The survey for the report “Emerging Technologies: AI Technology Spending in 2021 — Survey Trends” was conducted online from April through June 2021.

Gartner surveyed 268 respondents from China, Hong Kong, Israel, Japan, Singapore, the U.K. and the U.S. 

Respondents were involved in their organizations’ portfolio decisions for emerging technology and worked at an organization in the high-tech industry with fiscal year 2020 revenue of $10 million or more.

See more: Top Performing Artificial Intelligence Companies

Subscribe to Data Insider

Learn the latest news and best practices about data science, big data analytics, artificial intelligence, data security, and more.

Similar articles

Get the Free Newsletter!

Subscribe to Data Insider for top news, trends & analysis

Latest Articles