Prediction: Market for Artificial Intelligence in Cars Will Grow 1,200% in Next Six Years

The market for artificial intelligence in the automotive industry will go from $1 billion today to $12 billion by 2026, according to a report from the prognosticators at Global Market Insights Inc. The increase is due to the push for more assistive and autonomous features for improved driving comfort and safety, as well as realizing the goal of self-driving cars and trucks. AI-powered features are already being developed, tested and offered on consumer vehicles. These include lane assistance, adaptive cruise control and automated parking.

For instance, Toyota announced the launch of driver assistance for future cars that will get to level 4 of self-driving. One such feature, automatic valet parking, was jointly developed by Toyota and Panasonic; will provide affordable parking help to Toyota customers.

There are several companies currently developing AI for vehicles. They include Audi AG, Daimler AG, Ford Motor Co., Harman International Industries, IBM, Microsoft, Alphabet Inc., BMW, Didi Chuxing, General Motors, Honda Motor Co., Tesla, Uber Technologies and Volvo Car Corp.

These companies are primarily focused on long-term contracts and strategic collaborations to develop AI for the automotive market. Technology providers such as AMD, Intel and NVIDIA are constantly upgrading and introducing new features and energy-efficient hardware that will function in cars and consume little power.

It is hoped AI can support situational intelligence with the help of several next-generation sensors and onboard computers to detect and classify parameters such as traffic, road infrastructure and pedestrians. It is predicted that this “context awareness” segment will see 35% annual growth between 2019 and 2026 based on the high demand for semi-automated cruise control and driver-assistance features.

To support context awareness, computer companies are investing in all sorts of innovative technologies. For example, Intel invested $250 million into key technologies such as deep learning, security, connectivity and deep learning—technologies that will likely be broadly used if AI succeeds.

Another area of development for AI is in image/signal recognition that will let cars “recognize and understand” traffic signs and speed limit indicators so the car can lower its speed without human intervention. Several government initiatives are promoting traffic sign recognition that would ensure adherence to speed limits, which would also help bump up demand for artificial intelligence in automotive markets.

For example, the European Commission last year mandated that all vehicles manufactured after 2021 have built-in image or signal recognition. The goal is to reduce speeding and bad driving while promoting on-road safety.

The image/signal recognition segment accounted for more than 65% of AI’s automotive market share last year, thanks to the widespread adoption of the idea that speed control is needed to reduce accidents.

Europe has several major market leaders such as Audi, Daimler, Bentley, BMW and Mercedes who are major players in autonomous mobility. Automotive manufacturers are focusing mainly on AI technologies to make self-driving cars widely accepted and sold, particularly companies in the U.K. and Germany where the use of AI has been encouraged.

Favorable government initiatives to promote the deployment of AI for smart traffic control have pushed for the development of AI for the auto industry. The U.K. government, for example, invested more than $75 million to improve mobility and develop AI solutions in 2017. Overall, Europe accounted for more than 35% of the money spent on AI for cars and trucks due to rising demand for autonomous vehicles.