UBS stated in its latest report that the technology industry has just begun a large-scale growth cycle, and by 2027, the widespread application of artificial intelligence in various economies will drive AI models and applications into a $225 billion niche market.
The report states that compared to $2.2 billion in 2022, this is a huge leap, marking a compound annual growth rate of nearly 152%.
UBS predicts that the total revenue of the artificial intelligence industry will increase by 15 times, from $18 billion in 2022 to $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, driving a compound annual growth rate of 138% in the application field.
The report states, "If the launch of the ChatGPT application is the 'iPhone Moment' of the artificial intelligence industry, then in our view, the many recently launched applications, such as Microsoft's Copilots and OpenAI's Turbo with Vision launched in the fourth quarter of 2023, mean that the App Store Moment of the artificial intelligence industry has arrived."
In addition to the software market, UBS also pointed out that, driven by emerging trends such as GPU cloud and artificial intelligence edge computing, AI infrastructure spending will also grow rapidly, and the size of this segment is expected to grow from 25.8 billion dollars in 2022 to 195 billion dollars in 2027.
The report states, "This may make artificial intelligence one of the fastest-growing and largest fields in the global technology industry, and can be considered the 'technology theme of the past decade', as we have not seen similar growth in other technology fields."
UBS believes that the GPU and chip sectors will be the biggest beneficiaries of strong spending on artificial intelligence in the coming years, with a compound annual growth rate expected to be 60% from 2022 to 2027, and industry revenue expected to grow from $15.8 billion in 2022 to $165 billion in 2027.
Although some investors may be concerned about the increasing regulatory discourse surrounding artificial intelligence, UBS stated that "sooner is better than later.".
"In summary, regulation, including export controls, is a risk worth paying attention to, but as we recently emphasized in our semiconductor special report, excessive adjustments caused by geopolitics or regulation may bring buying opportunities," the investment bank wrote in the report.