① UBS said that by 2027, the wider application of artificial intelligence will increase the size of this market segment from US$2.2 billion to US$225 billion;
② From 2022 to 2027, the total revenue of the artificial intelligence industry will increase 15 times;
③ In the next few years, AI software, model, and semiconductor companies will be the biggest beneficiaries of this wave of AI.
UBS (UBS) said in a recently released report that the technology industry has only just begun a large-scale growth cycle. By 2027, artificial intelligence will be widely used in various economies, thereby driving AI models and applications into a $225 billion market segment.
This is a huge leap compared to $2.2 billion in 2022, marking a CAGR of nearly 152%, the report said.
UBS expects the AI industry's total revenue to grow 15 times as a result, from US$18 billion in 2022 to US$420 billion in 2027, with a compound annual growth rate of 72%. This forecast is 40% higher than UBS's previous forecast. Researchers acknowledge that UBS's previous predictions may have been too conservative.
The bank pointed out that stronger than expected demand will drive the development of artificial intelligence software and drive the application sector to a compound annual growth rate of 138%.
The report said, “If the launch of the ChatGPT app is the AI industry's 'iPhone moment', then in our opinion, many recently launched apps, such as Microsoft's Copilots, and OpenAI's Turbo with Vision in the fourth quarter of '23 mean that the AI industry's App Store moment has arrived.”
In addition to the software market, UBS also pointed out that the increase in AI infrastructure spending will also grow rapidly, driven by emerging trends such as GPU clouds and artificial intelligence edge computing, and the size of this market segment is expected to grow from US$25.8 billion in 2022 to US$1950 billion in 2027.
The report said, “This may make artificial intelligence one of the fastest-growing and largest fields in the global technology sector. It can be said that it is the 'technology theme of this decade, 'because we have not seen similar growth in other fields of technology.”
**UBS believes that the GPU and chip sector will be the biggest beneficiary of the strong wave of artificial intelligence spending in the next few years. The compound annual growth rate from 2022 to 2027 is expected to be 60%, and industry revenue will grow from US$15.8 billion in 2022 to US$165 billion in 2027.
Although some investors may be concerned about increasing regulatory rhetoric surrounding artificial intelligence, UBS said “sooner is better than late.”
“All in all, regulation, including export controls, is a risk worthy of everyone's attention, but as we recently emphasized in our special report on semiconductors, excessive adjustments due to geopolitics or regulation may bring buying opportunities,” the investment bank wrote in the report.
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