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Consumer apps are the largest market segment for AI

Even as research and investment into artificial intelligence (AI) have gone through some 60 years of booms and busts, consumers’ fascination with the technology persists.

However, it’s with the recent rise of digitization, Big Data, improved algorithms, and processing speed that consumer applications of AI have begun to emerge into the mainstream. From movie recommendations to search engine queries, AI and, more specifically, deep learning are powering a range of applications that have recalibrated consumer expectations for the digital lifestyle.

According to a new report from Tractica (, consumer AI now accounts for the largest portion of AI software, hardware, and services revenue, reaching $1.9 billion in 2016 and rising to $2.7 billion by the end of 2017, which is greater than any other industry segment. Although the entire market, including consumer AI, remains in its infancy, the research group forecasts strong growth ahead, with the market for consumer AI hardware, software, and services increasing to $42.1 billion by 2025.

“The consumer AI market is being led by the internet giants of our time, and consumer AI use cases are among the most advanced proof points for commercially available AI to date,” says principal analyst Jessica Groopman. “Companies like Google, Amazon, Facebook, Baidu, Apple, and others are pioneering the use of AI in consumer interactions, both to mimic and to empower human capabilities.”

Groopman adds, however, that the growth of this market is not limited to internet companies. As brands and suppliers across consumer-facing industries incorporate AI into their products and processes, consumer AI will replace the current standards for consumer interactions.

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