AI Market Set to Skyrocket to $990 Billion by 2027 Amidst Supply Chain Strains

Global management consultancy Bain & Company forecasts that the artificial intelligence (AI) market is set to surge, potentially reaching $990 billion by 2027. This remarkable growth trajectory highlights AI's transformative impact on business and the economy.

In its latest annual Global Technology Report, Bain outlines the projected growth of AI-related products and services. From a market worth $185 billion last year, AI is expected to expand at an annual rate of 40% to 55%, ultimately generating between $780 billion to $990 billion in revenue.

This expansion is fueled by the development of larger AI systems and the data centers required to train and operate them. The increasing adoption of AI technology by companies and governments to enhance efficiency is further propelling market growth. However, Bain notes that the rapid increase in demand may strain supply chains, particularly for the essential chips powering these services.

Bain warns that the combination of soaring demand and geopolitical tensions could result in shortages affecting semiconductors, personal computers, and smartphones. They foresee a potential 30% or higher increase in demand for upstream chip components like integrated circuit designs and related IP by 2026, which could place additional pressure on manufacturers.

Moreover, as computational power grows, the cost of large-scale data centers is anticipated to escalate substantially. Currently valued at $1 billion to $4 billion, these costs could soar to between $10 billion and $25 billion within five years.

Bain's report elaborates on the significant implications these developments will have on the broader ecosystem supporting data centers, including infrastructure engineering, power production, and cooling systems.