When AI meets the metaverse: the future of business innovation
What happens when a $184 billion dollar industry collides with a $75 billion game changer? The future of business innovation is redefined. Artificial intelligence (AI) and the metaverse are two of the most transformative technologies shaping our world today, and together, they are revolutionising the commercial landscape. As we enter a new era of digitalisation, these technologies are not only changing how businesses operate but are also reshaping the very fabric of our economic and social interactions. In this article, Outman explores the commercial potential of the metaverse and AI, highlighting their synergies, challenges, and the vast future prospects they hold.
A combined trillion-dollar market on the horizon
According to Statista, it is estimated that the global metaverse market currently stands at $75 billion and is due to reach a projected market volume of 500 billion by 2030. Meanwhile, the AI market size currently sits at $184 billion, and is projected to reach $825 billion by 2030. Regarded as the next iteration of the internet, the metaverse is where the physical and digital worlds unite, and AI is helping it get there.
The role of AI in the metaverse
AI plays a critical role in powering the metaverse. It enhances user experiences by enabling more realistic interactions, automating processes, and personalising content. From creating life-like avatars and virtual environments to developing intelligent NPCs (non-player characters) that interact with users, AI is the backbone of the metaverse’s dynamic and interactive nature.
For example, AI-driven avatars in platforms like Meta’s Horizon Worlds can learn and adapt to user preferences, making virtual interactions more natural and engaging. Beyond virtual experiences, AI's ability to process and analyse vast amounts of data in real-time is crucial for creating immersive and responsive environments. This is evident in gaming, where AI generates complex, adaptive worlds, and in social interactions, where AI-powered chatbots provide personalised, human-like conversations. AI also plays a vital role in content creation, with generative AI models like OpenAI’s DALL-E and ChatGPT producing art, music, and scripts on demand, enabling users to co-create and share unique content in real-time. This capability opens up endless possibilities for creative industries within the metaverse, where users can co-create and share content with others in innovative ways.
Moreover, AI contributes to the scalability of the metaverse by automating processes that would otherwise require human intervention. AI can manage and maintain virtual environments, ensuring they remain functional and engaging without constant human oversight. This automation not only enhances user experience but also reduces the operational costs associated with running large-scale virtual environments. Outside of this virtual world, there’s no doubt that AI is changing our real world, too. A report by PwC notes that global GDP could be up to 14% higher in 2030 as a result of AI – the equivalent of an additional $15.7 trillion – underscoring its importance in the future of commerce. As AI continues to improve, its advancements will further refine the metaverse, making it more immersive, efficient, and accessible, ultimately driving its evolution and expanding its commercial potential.
Commercial applications of the metaverse and AI
The commercial potential of the metaverse, combined with AI, is vast. Below we list key areas where these technologies are making significant impacts:
Transportation and urban planning: The metaverse offers a unique platform for urban planners and transportation authorities to design and test infrastructure projects before implementation. By simulating traffic patterns and pedestrian behaviours, cities can optimise traffic flow and improve safety measures. AI enhances these simulations by processing large datasets and predicting outcomes, enabling planners to make data-driven decisions. For example, Singapore’s Virtual Singapore initiative uses AI and 3D modelling to create a digital twin of the city, allowing for advanced urban planning and disaster management strategies through technologies such as AR and VR.
Education and training: The metaverse offers an innovative platform for education and training. Universities, corporations, and training institutions are creating virtual campuses and classrooms, providing interactive and immersive learning experiences. For instance, the US military has shortened its helicopter maintenance training from 18 weeks to 10 weeks by using VR simulations powered by AI. These tools allow trainees to interact with virtual helicopters, conducting repairs and maintenance in a safe, controlled environment, enhancing learning outcomes while reducing costs.
Retail and e-commerce: The metaverse is transforming the retail landscape by creating immersive shopping environments where customers can explore virtual stores, try on clothes in digital fitting rooms, and make purchases - all from the comfort of their homes. This new approach consolidates the multi-channel strategy, blending the physical and digital shopping experiences for maximum flexibility. AI plays a crucial role by analysing customer preferences and behaviours to offer personalised recommendations, enhancing the overall shopping journey. Brands like Nike and Gucci have already made significant strides in the metaverse, offering digital versions of their products to engage with consumers in innovative ways.
Real estate and virtual property: Virtual real estate is becoming a lucrative market within the metaverse, with companies and individuals buying, selling, and leasing virtual spaces for commercial purposes. AI assists in evaluating the value of virtual properties, predicting market trends, and enhancing virtual architectural designs. Major brands are purchasing virtual land to create immersive experiences and host virtual events, expanding their presence into this new frontier. For example, Decentraland has seen plots of virtual land sell for millions of dollars, driven by the potential for hosting virtual events and creating branded experiences.
Entertainment and social interaction: The entertainment industry is rapidly embracing the metaverse as a new platform for gaming, concerts, and social interaction. As noted above, AI enhances these experiences by generating realistic environments, intelligent characters, and personalised content. Virtual concerts allow artists to perform in front of a global audience in a virtual venue, creating new revenue streams and fan engagement opportunities. Platforms like Fortnite have hosted virtual concerts featuring rappers like Travis Scott, attracting millions of viewers and generating significant revenue through virtual ticket sales and merchandise.
Challenges and considerations
While the commercial opportunities in the metaverse are vast, they are not without challenges. Data privacy, security, and the digital divide are significant concerns that companies must address as they expand into this space. AI, while powerful, also brings ethical considerations, particularly around data usage and algorithmic transparency. Moreover, the metaverse is still in its early stages, and widespread adoption will require overcoming technical, regulatory, and social barriers.
The future of the AI-powered metaverse
The future of the metaverse and AI is bright, with endless possibilities for innovation and growth. As these technologies continue to evolve, they will create new markets, disrupt traditional business models, and offer unprecedented opportunities for companies willing to embrace this digital frontier. Businesses that invest in understanding and integrating the metaverse and AI into their operations will be well-positioned to lead in the next wave of digital transformation. Outman anticipates that by 2030, most Fortune 500 companies will have implemented AI-powered metaverse platforms for training, sales, and other critical business functions. The key to success lies in staying adaptable, leveraging the unique capabilities of these technologies, and addressing the challenges they present with foresight and responsibility. We see the commercial landscape is on the brink of a revolution, and the metaverse and AI are at the forefront of this exciting journey.