Four AI predictions for 2020

By Steve Hill

KPMG sees 2020 as a pivotal year for how major companies invest in artificial intelligence (AI). While every large enterprise is at a different stage on the AI journey, most share a common goal: deploying AI at scale to deliver real value and stay competitive. Heading into 2020, we see four trends that will shape the enterprise AI landscape.

1. AI spending focuses on four key areas. In the coming year there will be less isolated experimentation around AI; many companies will move out of the pilot phase and toward enterprise-wide deployment. Although AI at scale is rare today, many companies are setting this as a core objective over the next three years. And as companies pursue AI at scale, we anticipate major growth in four spending segments in 2020:

  • Data and analytics – Quality data is the foundation for any successful AI strategy, and companies will continue to spend to overcome data challenges.
  • Transformation – Right now, many projects are focused on leveraging robotic process automation (RPA) to transform the more-routine middle and back office functions, and we expect this focus to continue.
  • AI strategy – Large companies will continue to devote significant resources to AI strategy, including investment analysis and organizational design.  
  • AI controls and compliance – As companies race to get AI initiatives off the ground – and potentially run into unintended outcomes, misuse of data and algorithm bias – they will increasingly spend to establish enterprise-wide controls and compliance processes.

2. Sizeable shift toward AI-as-a-Service (AIaaS). To rapidly pursue AI, many companies are looking to third-party AIaaS vendors. While embracing third parties does not eliminate the need to build up internal capabilities, it opens up more options. 

In a sample we surveyed of large global companies, we estimated that roughly two-thirds of their total AI spending is currently allocated to internal build – and only one-third is dedicated to buying services from vendors. But we are already seeing signs that this investment mix is starting to shift and, by 2022, we expect many companies to devote over half of their AI spend to third-party services with managed services, microservices and bot stores being important trends to watch in this space.  

3. Competition for AI talent continues to heat up. Many large companies struggle to attract and retain the technical talent needed to drive AI initiatives. The majority of respondents in a recent survey said they find it difficult to hire talent with AI-related skills. And in a sample we researched of large global companies, half had less than 100 full-time employees dedicated to AI initiatives.

Tech giants help fuel this battle for talent, representing a disproportionately high number of AI hires. Over a 12-month period, 31% of all AI job postings came from a small group of tech companies. We expect the competition for technical talent to continue to heat up in the new year. 

4. A growing gap in how large companies invest in and deploy AI. In our research, we found nearly a ten-fold gap in resources devoted to AI between the companies with more mature AI capabilities and the early-stage AI companies. The companies that have already started on the AI journey are experimenting, learning critical lessons and building the right foundation for future success – and potentially developing a major advantage over their competitors. In 2020, we expect the gulf will continue to grow. 

This article draws on findings from KPMG research, including KPMG's 2019 Enterprise Deployment Study and a recent survey of 750 industry insiders. For more information or to speak with Steve Hill, please contact Melanie Batley..


Download the AI adoption study report

Steve Hill

Steve Hill

Principal, Global Head of Innovation, KPMG US

+1 212-909-5659

Related content

Media contact

Melanie Malluk Batley

Melanie Malluk Batley

Associate Director, Corporate Communications, KPMG US

+1 201-307-8217