Market Size and Market Growth - AI Training Services
While no definitive statistic exists for the size of the Artificial Intelligence training services market in the U.S., a look at the biggest players in the industry suggests that the market is currently at least $746 million. Given the lack of publicly available information about the industry, it is possible that the market is bigger than this. However, it can be reasonably assumed that the market is not any smaller.
Meanwhile, the overall global market for AI training services is likely at least $820 million, based on available evidence from the largest players in the industry. U.S. companies make up just over 90% of this market, according to an analysis of the current market positions of the U.S. companies among the industry's biggest players.
Furthermore, a look at publicly available statistics about the AI market in general suggests that the $820 million figure for the global market is a reasonable approximation, lending credence to the $746 million figure for the U.S.
Looking ahead, evidence suggests that the AI training services market is likely to grow substantially over the next several years. For instance, one set of figures point to an annual growth rate of 47.5% during the period 2017 to 2021.
Estimating Market Size
No pre-existing estimate of the size of the AI training services market could be found. Therefore, we estimated the market size using available statistics. Specifically, we looked at the publicly-available revenue figures for the biggest players in the sector and projected the overall size of the market using these revenues as a benchmark.
In order to calculate the market size, we looked at five major players in the AI training services market: Crowdflower, Appen, Applause, Lionbridge and Amazon Mechanical Turk (also known as Amazon M-Turk). For the first four of these, the revenues figures are publicly available, provided by Owler:
CrowdFlower: $100 million
Appen: $74 million
Applause: $68.9 million
Lionbridge: $556.6 million
The revenue figures for Amazon M-Turk have not been disclosed.
However, a Tech Republic article from 2016 noted that the combined revenue of Amazon M-Turk and CrowdFlower was $120 million in 2013. (Tech Republic drew this information from a World Bank report).
The annual growth rates for these companies are not publicly available, making it difficult to project back what CrowdFlower's likely revenue figure was for 2013. However, even assuming 0% growth over the last few years, that would give Amazon M-Turk an annual revenue figure of at least $20 million.
Assuming the $20 million figure for Amazon M-Turk, this would give an annual revenue total for the five biggest players in the sector of $819.5 million, once the five individual revenue numbers are added together. This would be the lowest possible figure for the size of the market.
We can assume that there is at least some number of smaller players in the sector, making a rounding to $820 million for the market floor a reasonable assumption.
Meanwhile, there is outside evidence to suggest that this figure is a fairly reasonable estimate.
A Venture Beat article from December 2017 quotes figures from Tractica estimating the 2016 market for AI technologies and AI-driven services to be about $1.38 billion. Assuming the market for AI training services is a sub-set of this market, the figure of approximately $820 million becomes a reasonable estimate.
For determining the U.S. market, approximately 90.9% of the revenue generated by the biggest players in the industry came from companies headquartered in the U.S. Only Appen, headquartered in Australia with $74 million in annual revenue, came from outside the U.S. Using the 90.9% figure as the U.S. market share, and using $820 million as the estimate of the global market, this would imply a U.S. market size of $746 million.
Massive Growth Expected
There is significant evidence that the market for AI training services is likely to expand dramatically in the coming years. An estimate published in The Journal points to a 47.5% compound growth rate in the use of AI in the educational sphere over the period from 2017 to 2021. Assuming that this growth rate would hold for the industry as a whole and using $820 million as a base, this would put the market for AI training services at about $3.8 billion by 2021.
There is reason to believe this growth projection could be conservative. For instance, the same Tractica data used in Venture Beat article places the market for AI technologies and AI-driven services at $59.75 billion by 2025. Remember, this is compared to a market size of $1.38 billion for 2016. This would mean the market would be 43.3 times bigger by the middle of the next decade.
If this growth rate hold for the AI training services market, that would imply a global market size of about $35.5 billion by 2025 (43.3 times bigger than the estimate of $820 million in 2017). Assuming the 90.9% U.S. market share, that would put the U.S. market at about $32.3 billion.
No decisive figures currently exist estimating the size of the AI training services market in the U.S. However, using the estimated revenue of the five biggest players in the industry, a market size of at least $746 million can be projected. This is based on an estimate of a global market size of about $820 million, a figure supported by other data estimating the overall size of the AI market. Meanwhile, growth rates for the industry are projected to be extremely high over the next several years. One projection puts that potential growth at 47.5%, though there is reason to believe even this tremendous growth projection might be conservative.