Analyst firm Gartner Inc. is taking a bullish stance on artificial intelligence technologies, saying industry revenues will top $1.2 trillion by the end of this year, up 70 percent from the year before.

The firm further projects in a report released today that AI-derived business value will reach $3.9 trillion by 2022.

“AI promises to be the most disruptive class of technologies during the next 10 years due to advances in computational power, volume, velocity and variety of data, as well as advances in deep neural networks,” said John-David Lovelock, a research vice president at Gartner. “One of the biggest aggregate sources for AI-enhanced products and services acquired by organizations between 2017 and 2022 will be niche solutions that address one need very well.”

The biggest need could well be “customer experience solutions,” which Gartner said will drive the most business value of all AI implementations. Other needs are likely to include ways to create new revenue streams and reduce the costs of business operations and serving up existing products.

Gartner said in its report that the customer experience sector should drive the most immediate growth for AI technologies as enterprises continue to experiment with things such as deep learning, machine learning and neural networks. One example of AI being applied to customer experience is “virtual agents,” sometimes known as chatbots, which can handle many simple requests and tasks received by call centers. This helps reduce costs for companies that would otherwise have to employ human operators to handle these tasks, freeing up staff to focus on more complex issues. If played right, it could also lead to a general improvement in customer service too.

Gartner said virtual agents will account for around 46 percent of all the AI-derived business value in the world in 2018. But this share will fall dramatically to just 26 percent in 2022 as companies come up with more sophisticated implementations of AI. Those will include decision support and augmentation, which are expected to account for 36 percent of the global AI market value this year, rising to 44 percent in 2022.

“Deep neural networks allow organizations to perform data mining and pattern recognition across huge datasets not otherwise readily quantified or classified, creating tools that classify complex inputs that then feed traditional programming systems,” Lovelock said. “Such capabilities have a huge impact on the ability of organizations to automate decision and interaction processes.”

Overall, Gartner says the AI market will continue to grow rapidly until 2021, before slowing down as the technology establishes itself.

Not every segment of the AI market will grow, however. Gartner said that so-called “smart products” such as AI platforms that connect to cloud computing systems — which currently account for 18 percent of the market’s global value — will fall to 14 percent in 2022 as they’re superseded by superior systems.

“In the early years of AI, customer experience is the primary source of derived business value, as organizations see value in using AI techniques to improve every customer interaction, with the goal of increasing customer growth and retention,” Lovelock said. “However, in 2021, new revenue will become the dominant source, as companies uncover business value in using AI to increase sales of existing products and services, as well as to discover opportunities for new products and services. Thus, in the long run, the business value of AI will be about new revenue possibilities.”

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