The Artificial Intelligence (AI) market value is expected to reach nearly $450 billion this year and maintain a year-over-year growth rate in the next 5 years, a new report has forecast.

In 2021, the global revenues for the AI market, including software, hardware, and services for both AI centric and AI non-centric applications, reached $383.3 billion, an increase of 20.7 per cent over the prior year, according to the International Data Corporation (IDC).

"Across all industries and functions, end-user organisations are discovering the benefits of AI technologies, as increasingly powerful AI solutions are enabling better decision-making and higher productivity," said Rasmus Andsbjerg, associate vice president, Data & Analytics at IDC.

The reality is that AI offers solutions to everything we are facing at the moment.

"AI can be a source for fast-tracking digital transformation journeys, enable cost savings in times of staggering inflation rates and support automation efforts in times of labour shortages," Andsbjerg added.

AI software accounted for the largest share the overall AI market in 2021.

The four AI software categories � AI Applications Delivery and Deployment, AI Applications, AI System Infrastructure Software, and Artificial Intelligence Platforms � delivered more than $340 billion in market value in 2021 with AI Applications representing nearly half the total.

Artificial Intelligence Platforms delivered the strongest year-over-year growth at 36.6 per cent, albeit from a smaller baseline.

With nearly 300 companies vying for opportunities to gain share, the AI Applications market remains highly competitive, said the IDC.

The AI Services market saw its total value increase 22.4 per cent year over year to $24 billion in 2021.

AI Hardware was both the smallest ($18.8 billion) and fastest growing (38.9 per cent year over year growth) segment of the AI market.