The US$500 Billion AI Race: Who’s Winning (and Who’s About to Vanish)

Artificial intelligence (AI) is proving to be as transformative as the advent of internet. The power in the hands of companies and individuals to create new is at an all-time high. I have always believed that enabled by technology individuals will become a self-sustained entity may be space faring one. That could take a few centuries and might look like a science fiction. However, AI is an important building block in unleashing the superpowers of human beings and it is showing signs of wider adoption now. Let us see how the AI market looks like:

 AI Market Segmentation & Size 📊

The total market size of AI was USD 233.5 billion in 2024, which is expected to grow at 29.2% in 2025 to USD 294.2 billion and further to 3.68 trillion with an impressive 10 years CAGR of 36.8% (Source: Fortune Business Insights, Verified Market Research, Market Research Future, GlobeNewswire). Let us see how different components, technologies, adoption at end-user industries and offtake in various industries will look like over the years  

By Component: 

Software, Services, Hardware

• Software dominated with ~50.8% share (~USD 117.6 billion in 2024), growing at ~38.1% CAGR through mid‑2020s. (Source: Verified Market Research)
• Services (consulting, integration, maintenance) are the second-largest component and projected to register the highest CAGR in coming years. (Source: Grand View Research)
• Hardware (GPUs, ASICs, memory) is fueled by intense demand for AI accelerators; NVIDIA captured ~70–80% of shipments with $44 billion Q1 FY 2026 revenue (69% YoY). (Source: Mordor Intelligence)

By Technology: 

Machine Learning, Deep Learning, NLP, Computer Vision, Robotics, Expert Systems

According to MRFR and MRFRF projections:

• Machine Learning: ~$82.8 B in 2024; ~33% CAGR. (Source: Verified Market Research)
• Deep Learning: the second-largest in 2024; rapid growth following ML. (Source: Verified Market Research)
• NLP: ~$25 B in 2024 → ~$450 B by 2035 (~21–22% CAGR). (Source: Verified Market Research)
• Computer Vision: ~$20 B in 2024→ ~$350 B by 2035. (Source: Market Research Future)
• Robotics: from ~$15 B in 2024 to ~$300 B by 2035. (Source: Market Research Future)
• Expert Systems: ~$6.3 B in 2024→ ~$100 B by 2035.

By End‑User Industry

• Automotive & Transportation: $63.4 B (27.4% share in 2024); highest projected growth (~41.5% CAGR). (Source: Verified Market Research)
• Healthcare: ~$26.7 B in 2024; projected to reach $613.8 B by 2034 (~36.8% CAGR). (Source: GlobeNewswire)
• E‑commerce: ~$7.25 B → ~$64 B by 2034 (~24.3% CAGR). (Source: GlobeNewswire)
• Transportation (broad): ~$4.5 B → ~$34.8 B by 2034. (Source: GlobeNewswire)
• Agriculture: $2.08 B → $16.9 B by 2034 (~23.3% CAGR). (Source: GlobeNewswire)
• Robotics sector overall: ~$74 B (recent). (Source: GlobeNewswire)

By Geography

• Global AI market: USD 233.5 B in 2024 → USD 294.2 B in 2025 → USD 1.77 T by 2032 (~29.2% CAGR). (Source: Fortune Business Insights)
• North America led (~36.8% share in 2024). (Source: Verified Market Research)
• Asia-Pacific, notably India: projected to triple to $17 B by 2027. (Source: Times of India)

Market Segment Leaders & SWOT

Hardware – AI Accelerators (GPUs, ASICs)

Leader: NVIDIA

• Strengths: ~70–80% market share; cutting-edge GPU tech (H100, H200) foundational for deep learning (). Massive financials: $4 T market cap, $44.1 B Q1 FY 26 revenue (+69% YoY). (Source: Times of India)
• Weaknesses: supply‑chain bottlenecks; competition from AMD’s MI325X, Intel, Graphcore, etc.. (Source: Market Intelligence)

Others:

• AMD: competing with MI325X chip; raised AI-processor revenue guidance to $3.5 B.
• Intel, Graphcore: niche, but raising billions. (Source: Market Intelligence)

AI Platform Software

Leaders: Microsoft Azure AI, Amazon Web Services, Google Cloud, Oracle, Anthropic, OpenAI, Cohere.

• Microsoft & Amazon: Platform revenues ~$65.3 B in 2025; ~10.8% CAGR to 2030. (Source: Market Intelligence)
• OpenAI, Anthropic, Cohere: lead LLM APIs. Anthropic scaled from $1B to $3B annualized revenue by end‑2025. (Source: Market Intelligence)

Strengths: Integrated toolchains, ecosystem lock–in, hyperscaler scale.

Weaknesses: regulatory complexity (EU AI Act), supply limits, IP/licensing issues ().

Software Applications: NLP, CV, Robotics

NLP & Generative AI:

• OpenAI (ChatGPT), Google Gemini, Anthropic Claude.
• Strengths: Leading LLM performance, developer traction, ad & enterprise potential (ChatGPT ad model threatens Google).
• Weaknesses: monetization challenges, safety/regulation risks, search‑ad displacement. (Source: Market Intelligence)

Computer Vision / Robotics:

• SenseTime, 4Paradigm, Baichuan, Deepseek (China).
• Strengths: Strong CV models, advanced autonomy; Deepseek offers efficient hardware-light LLM.
• Weaknesses: High cost, complexity, early-stage maturity. 

Services & Consulting

Leaders: Accenture, Deloitte, PwC, Capgemini.

• Strengths: Deep domain expertise, hyperscaler partnerships, turnkey governance solutions.
• Weaknesses: High competition; slow enterprise adoption could slow services growth.

Industry-Specific Use Cases

• Healthcare: AWS, Google DeepMind, IBM Watson, Microsoft Hanover.
• Financial Services (BFSI): AI compliance, fraud detection – leading share; BFSI adoption strong.
• Retail & E‑commerce: IBM, AWS solutions; e‑commerce AI (~$7.25 B → $64 B).
• Automotive: Tesla, Waymo, GM Cruise; market accelerating.

Outlook & Strategic Insights

AI continues its rapid expansion across segments:

• Hardware currently led by NVIDIA, but challengers like AMD and Intel are gaining traction.
• Platform-level rivalry between hyperscalers + emergent LLM API providers.
• Evolving regulations (EU AI Act, US safety orders) and supply constraints 
• The slowest link is enterprise/mid‑market adoption, though digital transformation budgets are expanding.

This report has been created with the help of ChatGPT. Also, the views expressed are of the author's and not of the employer.