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How to leverage AI in your startup idea {A 2020 Business Model}

By Sudeep Srivastav
July 26, 2019 2. min read
Last update on: September 8, 2020

Even though AI has established itself as a technology which is a growth and popularity magnet, the question of how to make money in AI domain is what every innovation-driven entrepreneur is still actively seeking an answer to.

Now the answer that the internet has to offer to how do AI startups make money and other semantic questions is a mesh. One that sends entrepreneurs in the direction of value offering, competitor analysis, and pricing models. 

All ending with very few truly useful insights. 

Ensuring that we are not another non-useful dead end, let’s walk you through the exact sectors and categories which are and are poised to continue making money in AI. Ones that would give you a headstart of where your Artificial Intelligence industry journey should start from. 

But before we head on to the stage of revelation, let us look at the market state of the technology which has unanticipatedly made its place in the Profit and Loss statement of various businesses across industries, across the globe. 

Here’s your answer to how big is the AI market

AI Market Structure

The world wide web is filled with data and statistics talking about the many facets of Artificial Intelligence – its sub-technologies, use cases, adoption rate, etc. 

And one commonality that has time and again surfaced itself in all the researches is the Artificial Intelligence Growth

The growth trip that AI is on since the past many years has made it a part of not just the many innovation-centric business plans but also of the list of top tech trends for 2020 and beyond. 

It is this value and growth based nature of AI that has made the technology a trump card tech offering of businesses looking for a competitive advantage and high revenue count. 

AI Market Structure

Now even though the present and artificial intelligence future have established it as a gold-mine like technology which favors every industry and domain that incorporates it in their business plan, there are some which make the most money. 

In fact, this preference is not just limited to which industry will make the most money through AI. The classification is present in multiple other categories, such as which country will benefit the most from AI, which the AI sub-categories would be most profitable, etc. 

Let us start with looking into the different categories individually, giving you – an entrepreneur – the insight into which industry or which country should be in your business plan. 

Which industries will make money with Artificial Intelligence?

The total yearly value of AI across 19 different industries in the context of the global economy came out to be $3.5 trillion and $5.8 trillion. The number is around 40% of the total $9.5 trillion and $15.4 trillion yearly impact which can be enabled by using analytical techniques to its entirety. 

Even though the inclusion of Artificial Intelligence can be seen across a wide spectrum of industries, there are a few which are forecasted to generate the most revenue – ones which answers which is the best industry to make money in AI. And unlike what was presumed, the profit projection is not just limited to the Healthcare sector or to Artificial Intelligence in Financial Markets. There are a number of other sectors in line to gather their intelligence-driven profit. 

The figure below highlights the industry-wise AI potential.

Which industries will make money with Artificial Intelligence

Taking the discussion back to the 19 industries that we mentioned at the start of this section, here are the industry-wise impact of AI, both in terms of the average dollar impact and the percent effect on the industry’s revenue. 

Which industries will make money with Artificial Intelligence 2

Which countries will make money in AI?

The true artificial intelligence industry growth lies in the country it is operating in. 

A report by Accenture – Artificial Intelligence is the future of growth – studied the scope that AI carries in affecting nation-wide economies across the globe. 

Here are their findings –

Which countries will make money in AI

* Baseline shows the expected annual economic growth rate under current assumptions about the Artificial Intelligence future

** AI scenario is the valuation that shows the expected economic growth once the impact of AI has been absorbed into the economy. 

While the graph highlights that the USA is the nation that is most inclined to be benefitted from the advent of Artificial Intelligence, other nations are also not falling behind. 

There are a number of nations that will be seeing the result of artificial intelligence impact on economy

Other nations like Japan, the UK, France, and Germany have all individually made announcements around their AI strategies. 

For example, President Macron announced that the French government would be spending around $1.85 billion over the coming five years for supporting the growth of AI ecosystem, which would include the development of large-scale datasets. 

Companies like Google’s DeepMind and Samsung are committed to opening up new labs in Paris, while Fujitsu is also planning to expand its Paris based research center. The UK also announced its plan to push $1.4 billion into AI, which would be used for funding 1000 PhDs in the AI domain. 

The crux of all these worldwide AI adoptions is that while the inclusion will be global, there are some nations that are most likely to make more money with AI as compared to their counterparts. 

Which AI sub-technologies will make the most money?

There are many companies operating in the world today that claim to be using AI in their services or applications. However, AI in its broader sense is simply an application that mimics the cognitive functions that humans associate with. 

On a much lower level, AI is a programmed rule which determines machine to act in a specific way in specific situations. However, in revenue generation and true business benefitting sense, when we talk about Artificial Intelligence, we are mainly talking about its two main technology sub-parts – Deep learning and Machine Learning. 

 Which AI sub-technologies will make the most money

There are other important AI technologies as well that are the drivers of the revenue that businesses and governments can generate through AI inclusion in their systems like Regression Analysis, Descriptive statistics, etc.  

Measuring the future of all these AI-powered technologies, a study by McKinsey Global Institute established that there are three technologies who will primarily be used in AI applications – Deep Learning, Reinforcement Learning, and Transfer Learning. 

Measuring the future of all these AI-powered technologies

Another study by Allied Market Research identified that Machine Learning will be one of the top revenue generators for an AI startup in the coming time, followed by NLP and Image Processing technologies.

Global AI Market

Which business domain will make money in AI?

It is not just the industries that AI is carrying a glaring impact on but also the individual business domains. 

Now although AI impact on business domains is not limited to any or a specific set of job areas, there are a few that are expected to carry maximum value potential once incorporated with the power of AI. 

Here are the business domains that are able to make maximum money at the back of AI –

Which business domain will make money in AI

In case you are planning to offer enterprise-level AI solutions, covering these domains can have a positive impact on your revenue charts to a great extent. 

Which use cases will make money with Artificial Intelligence

A study by Tractica Research forecasts that the revenue count which is generated from the direct or indirect application of AI in a system is going to reach $36.8 billion by 2025. 

When we talk about the inclusion of AI in a system, what we are actually talking about are the different use cases that surround the AI in a business ecosystem. Here are the use cases that are guesstimated to generate maximum revenue for their parent company.

Which use cases will make money with Artificial Intelligence

If you look at the graph closely, you will find that around 60% of the cases are based on Big Data while 40% surround object and image recognition. Meaning the companies offering either of the two services are poised to see a very steep growth in the coming time. 

What Do These Economic Values Mean?

The fact that the Artificial Intelligence industry is set to offer monetary profits across a wide spectrum, is a sign that we are entering a golden era which will be based on Artificial Intelligence capabilities. 

Standing at today, it is safe to say that no matter what your AI offering is, the time to come will entitle you to monetary benefits. 

However, the different aspects that we read above, when dissected, appear to be carrying a theme. A theme which would define how the economic values are moving and where’s the money in AI.

Here’s the crux of the prevalent theme. 

  1. While global tech giants have the expertise to drive the AI movement and create a sort of rulership on the major chunk of money that the ArtificiaI Intelligence industry is bound to make, Artificial Intelligence startups are not lagging very behind too. 

Startups that attend to the use cases which are cash cows of the Artificial Intelligent domain carry the probability to come across as winners. 

  1. The nation states, like companies, are also now finding themselves competing in the AI race. While on one hand China and USA have declared their intent to be the world leader in AI by the next 10 years, European nations are measuring the restrictions that their strong data privacy would pose. 
  2. Technologies wise, Machine Learning and Deep Learning have placed themselves at the top revenue-generating position. And this position has made companies that offer these services a gold mine which is going to make money for a very long term. 

Knowing which categories hold the answer to how to make money with AI is not enough. It all remains incomplete until you know how your AI startup would make money. And it won’t just happen with you launching a product or service belonging to the money-making industry. 

How Do AI Startups Make Money?

The only true answer to how do AI startups make money is the combination of their access to data sets and capabilities. 

For your AI project management practices to be truly successful, you will have to make three facets of your business very strong.

How Do AI Startups Make Money

  • Data Sets

The success of your AI startup and the answer to how do AI companies make money ultimately depends on the data set that you/they work with. 

The more quantitative it is, the greater will be the playing field for AI engineers. 

But, gathering data is not easy. Everyday security breaches like the Facebook-Cambridge Analytica instance have made it all the more difficult for businesses to ask for data. 

The solution to this crippling restriction is a partnership. Several tech giants are known to partner with hospitals or payment companies or even enterprises to get data for them to then analyze. 

  • Domain Expertise 

More often than not, insights which create a breakthrough innovation comes from having an in-depth idea of industry or domain. Only when you know an industry inside out, you will be able to identify areas where AI will create a breakthrough and get the answer to how to make money in AI. 

  • Skilled AI Talent

Your team of AI engineers and researchers will ultimately drive your AI business. The more skilled your associated manpower is, the greater the chances of you delivering intelligent services to industries which will make money with Artificial Intelligence. 

Now that you have the exact know-how of how to make money in AI, it is time for the Next Step. 

The step that will bring you on the path of earning guaranteed high revenues and business popularity.

Fill out the form below and get in touch with our AI engineers who will help you get started on your AI journey. 

Sudeep Srivastav
Sudeep Srivastav
CEO, Appinventiv
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