Artificial Intelligence or AI is a field of Data Science that trains computers to learn from experience, adjust to inputs, and perform tasks of certain cognitive levels. Over the last few years, AI has emerged as a significant data science function and, by utilizing advanced algorithms and computing power, AI is transforming the functional, operational, and strategic landscape of various business domains.AI algorithms are designed to make decisions, often using real-time data. Using sensors, digital data, and even remote inputs, AI algorithms combine information from a variety of different sources, analyze the data instantly, and act on the insights derived from the data.Most AI technologies – from advanced recommendation engines to self-driving cars – rely on diverse deep learning models. By utilizing these complex models, AI professionals are able to train computers to accomplish specific tasks by recognizing patterns in the data.
Analytics India Magazine (AIM), in association with Jigsaw Academy, has developed this study on the Artificial Intelligence market to understand the developments of the AI market in India, covering the market in terms of Industry and Company Type. Moreover, the study delves into the market size of the different categories of AI and Analytics startups / boutique firms.
As a part of the broad Data Science domain, the Artificial Intelligence technology function has so far been classified as an emerging technology segment. Moreover, the AI market in India has, till now, been dominated by the MNC Technology and the GIC or Captive firms. Domestic firms, Indian startups, and even International Technology startups across various sectors have, so far, not made a significant investment, in terms of operations and scale, in the Indian AI market. Additionally, IT services and Boutique AI & Analytics firms had not, till a couple of years ago, developed full-fledged AI offerings in India for their clients.
The AI market has, however, started to transform. As revealed in the Computer Vision Market study and the AI and Analytics start-up investment study, the Data Science space in India, specifically the AI function, is evolving into an innovative enterprise segment. MNC Technology, Domestic, Advanced Engineering, Healthcare, and Semi-conductor firms, to name a few,are now developing advanced Artificial Intelligence capabilities in India and providing top-notch AI services to firms across various industries and geographies.
AIMResearch has developed this study to research the development and scope of the AI market in India.
The AI market has been analyzed on the basis of various segments, including the sector the enterprises fall under and the type of companies.
AIMResearch has gone a step further to determine the market size of the Boutique AI and Analytics firms providing specialized AI services. These include the following types of firms:
End-to-end Analytics Products & Services
Artificial Intelligence / Computer Vision
IoT / Logistics
Natural Language Processing
Robotics
As covered in the AIMResearch Emerging Technologies report, the AI function in India has felt the effects of the recessionary environment, which has been caused by the unfortunate Covid pandemic. While the effects of the downturn have resulted in some contraction in the overall addressable AI market and in AI jobs, the India AI market is still extremely resilient – the contraction in AI salaries and advertised open jobs are all expected to recover over the next quarter or so and register marginal year-on-year growth in 2020-2021 over the corresponding 2019-2020 figures.
Scope and Methodology of Report
The scope of the report covers the total addressable market in India within the Artificial Intelligence domain. The companies and enterprises considered cover the firms that have operations based in India, regardless of the geography and/or the clients the firms are servicing.
The firms include Indian corporations (domestic conglomerates and domestic IT firms), MNC firms (including Technology and Engineering firms), Hi-tech Electronic / Chip & Semiconductor firms, Communications & Media enterprises, Banking & Financial (Public Sector, Private Sector, and Captives) firms, Energy, Industrial, Mobile Payments (Fintech), eCommerce, and Healthcare firms.
The market size has been categorized by Company Type and Industries or Sectors. The research also studies the salaries of AI personnel and the salaries advertised for AI open jobs.
The reference period of the data in the report is July – August 2020. The source of the data in this report includes all secondary sources in the public domain and some primary sources as well through discussions with hiring managers and domain leaders.
Market value figures are represented in USD while salary figures are represented in INR across the research report.
Key Highlights
The Indian Artificial Intelligence market is valued at $6.4 Bn as of July – August 2020. As mentioned, this covers the revenues from all AI operations originating from India regardless of stakeholder or client type, type of firm providing AI services, and geography of client.
The AI market share and size in relation to the Types of Companies is the highest across the broad MNC IT / Technology / Electronic category, which includes High-end Software and Hardware technology, IT Services, Semi-conductor, and Electronics firms. The combined market share is 36.2%
The market size by Industries or Sectors is the highest across the IT Services sector, followed by the Technology sector (including Software and Hardware firms), with a market share of 41.1% and 23.3% respectively.
Apart from the IT and Technology sectors, the BFSI sector has a market share of AI services at 9.6%.
There are close to 91000 Artificial Intelligence personnel working across enterprises in India, with a median salary of INR 14.7 Lakhs.
The highest median salaries are drawn by AI professionals in Mumbai, at INR 16.7 Lakhs.
Close to 16500 open positions related to AI are currently available to be filled in India, as of July 2020. Bengaluru, just as it does for other Data Science and IT services roles, tops the location for the highest proportion of open jobs.
The Artificial Intelligence market size in India covers the companies providing Artificial Intelligence services from the India geography, regardless of the geographical market and type of industry the services are provided to. The Indian Artificial Intelligence market has been valued at $6.4 Bn.
MNC IT | Technology | Semi-conductor | Electronics
In terms of Company Type, the broad based MNC IT, Technology, and Electronics category has the highest share of the AI market at 36.2% in percentage share, and $2314.3Mn in terms of Market Value. The large share of this category is logical given the broad-based firms that fall under this category, all which have significant AI operations in India. Accenture has the largest AI operations base in India across the broad MNC IT and Tech category.
The enterprises that fall under this category include:
MNC IT Services firms, such as Accenture, IBM, and Capgemini, among others, which provide AI services, as part of the larger Analytics & Digital service offerings, to their international and domestic clients.
Software Technology firms, such as Microsoft, Google, SAP, Oracle and AWS, among others – Microsoft has the largest AI operations in India across this sub-category. These firms are pioneering AI across all technology services, including Intelligent cloud, AI-as-a-service, and Edge Computing (developed along with Network & Telecom firms).
MNC Hardware Technology, Networking Equipment, and MNC Telecom firms, including Cisco, Juniper, Nokia, Verizon, and AT&T, among others. The AI technologies, adopted by these firms, are pioneering next generation 5G Networks (developed along with the Electronic and Semi-conductor firms), Edge Computing, and overall Connectivity / IoT platforms. 5G / Telecom network equipment leader, Ericsson, has the largest AI operations in this sub-category.
Electronics and High-end Semi-conductor firms, such as Samsung, Intel, Nvidia, Qualcomm, and AMD among others, which develop AI technologies for Smart Phones, Processing Units, Chips, Memory Devices, Servers, Data Centres, and other sensor-driven technologies. This includesAI technologies for Camera sensors, Facial Recognition devices, Driverless vehicles, Automation, and Cloud and IoT platforms. Samsung and Intel have the largest contribution in this sub-category.
The scope and range of firms across the MNC Tech category exemplifies the depth of the AI market in India across various specializations, including Intelligent Cloud, Edge Computing, IoT, and 5G Networks, to name a few. Most of the firms under this category are operating specialized AI Research centres in India that service the global AI and Data Science initiatives and capabilities of these firms.
Domestic IT
The broad MNC Tech company type is followed by the Domestic IT company type, which has a 25.4% AI market share at a value of $1619.3 Mn. This category covers the Domestic IT and ITES firms, including TCS, Infosys, Wipro, HCL Tech, Tech Mahindra, among others. Just like the MNC IT Services firms, these firms provide AI services within the broader Analytics and Digital offerings to international and domestic clients. Within this category, TCS has the highest AI market share contribution across all Domestic IT and ITES companies, just as it had in the CV market.
Captive
The Domestic IT category is followed by the broad category of Captive firms. The Captive category has an 8.8% AI market share at a value of 564.1 Mn. This category includes both Captive Banking and Healthcare companies. The MNC Banking and Pharma & Healthcare companies that have Global In-house Operations (GIC) in India constitute this category. AIMResearch has further broken-down this category in the sub-section below. JP Morgan Chase has the highest market share contribution across the Captive category.
Domestic Firms
The Captive company type is followed by the category of Domestic firms. This category of firms, which are headquartered in India, includes the Telecom, Oil and Gas, Pharma, Private Banks, Automotive, and Cross-sector conglomerates. The Domestic firms have a collective AI market share of 7.1% at a market value of 451.9 Mn. The Reliance group has the largest market share contribution across this category, with AI operations across its Oil & Gas, Retail, Jio Infocomm, and other segments. Other firms in this category include industry leaders like Airtel, ICICI Bank, HDFC Bank, Tata Motors, Tata Communications, Mahindra & Mahindra, Larsen & Toubro, and the Aditya Birla Group.
The market value of the AI services of Domestic firms is indicative of the focus of organizations to leverage Data Science for Operational Efficiency, Sales and Marketing, Customer acquisition, and overall growth, all while reducing time to market for products and services.
AIMResearch has separately assessed the market contribution of Indian PSU firms and Government Research institutes.
MNC Engineering
The MNC Engineering company type follows the category of Domestic firms. The MNC Engineering category has a market contribution of $371.6 Mn, with a market share of 5.8%. This category includes Multinational Engineering, Industrial, and Automotive firms. These companies include, Bosch, Siemens, Honeywell, ABB, GE, Hitachi, Delphi, Volvo, Ford, and GM, among others, that incorporate AI technologies across their high-end industrial, automation, IoT, and automotive products and services.
These includeMachine-to-Machine platforms, Optical sensors, Industrial devices, IoT sensors, Driverless technologies, and other Machine-based technologies. Bosch and GE have the highest market shares in this category. The range of companies in this category highlights the strength of the AI market in India across capabilities, talent, skills, and technology infrastructure.
eCommerce
The category of eCommerce company follows the MNC Engineering category, with a 4.8% market share and $ 305.1 Mn market value. The companies represented in this category include Flipkart and Amazon, which service the eCommerce and Retail markets through the AI services; Tesco, Target, and Walmart, which solely service the AI segments of their International eCommerce divisions; and Travel & Hospitality portals that facilitate tickets and hotel bookings.
AI capabilities are leveraged across almost all functions eCommerce. From Product Targeting, Market Segmentation, Pricing, Digital Platforms, Quality, Merchandise Classification, and Shipping & Logistics. AI and Machine Learning applications are utilized across the entire value chain of eCommerce and Retail; the AI market within the eCommerce category has the potential to grow to $2.75 Bn within the next decade.
Boutique AI & Analytics
The eCommerce company type is followed by the broad category of Boutique Analytics & AI firms, which have a market share of 3.4%, at a market value of $215.1 Mn. This category of largely domestic firms includes Analytics firms that provide AI services as part of the larger Analytics offering, and specialized AI firms that utilize AI, Machine Learning, and Robotics services as part of their Data Science offerings. The former companies include Ugam, Fractal Analytics, Automation Anywhere, Tiger Analytics, and MuSigma, among others. While the latter companies include such specialized AI & Robotics firms as Cellstrat, Wobot Intelligence, Mad Street Den, AgNext, Niramai Health, and Sigtuple, among others.
PSU & Government Research
The broad category of Public Sector Undertaking firms and Government Research Institutes are next in the list with a market share of 3.4% at a market value of $214.4 Mn. The PSU firms include the Maharatna corporations of ONGC, Indian Oil, HPCL, and BPCL to name a few. The institutes include Government-funded Scientific Research & Development organizations, including DRDO, ISRO and HAL.
These organizations utilize AI technologies and Machine Learning models across the Defence, Space, and Aeronautics Research & Development segments respectively. The research institutes also include engineering and technology research institutions, such as IISc and IITs. Many of these institutes have in-house AI incubation units, providing consulting and mentoring services to start-up AI firms and AI services to other science and technology institutions (both public and private). The Education Research Institutes and DRDO have the maximum contribution across this category.
Consulting
The market share of Consulting firms is next in the list at 2.1 % at a market value of $ 132.6 Mn. The AI market of these firms is restricted to specialized AI services as part of the broader IT consulting services that some of these firms provide their clients.
MNC Other
The remaining international corporations, classified as MNC Other, including MNC FMCG and Automotive firms, are next in the list. This category, in terms of AI market size and value, has a 1.8% market share and $111.9 Mn market value.
Aggregator Startups
Aggregator Startups complete the list of the type or category of firms. These startups include Zomato, Ola, and Swiggy, which utilize AI to expand their customer base. These firms utilize data models and analytics for customer acquisition, product curation, tracking, and recommendation engines. The AI contribution of this category of firms has a market value of $85.2 Mn and a market share of 1.3%.
The wide scale of companies that have set-up Artificial Intelligence operations in India indicates not just the promise that AI provides for the Indian market, but also the confidence that enterprises and organizations have in the AI capabilities of the Indian ecosystem and workforce.
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