How Much Does It Cost To Build An AI System?

Dinesh Thakur

21 Aug 2024

AI, or artificial intelligence, stands as truly a groundbreaking innovation that has emerged in recent times. Businesses of all sizes are experiencing significant transformations, higher profits, and a broader customer base as they widely adopt AI technology. Some major industries use AI solutions to automate their tasks such as healthcare, travel & tourism, educational institutions, financial institutions, manufacturing sector, banking sector, real estate market, and more. According to a recent report by Statista, the global AI market is projected to reach $1,811.8 billion by 2030.

As companies are highly interested in leveraging AI’s potential, a crucial question arises: “How much does it cost to build an AI system?” To sum up, AI app or software development typically costs from 10,000 USD for simple proof of concept (PoC) to 200,000 USD or more for highly complex applications. The ai app development cost depends on the level of customization and the range of features included. This article provides a complete breakdown on how much it costs to develop an AI application. So, without any further ado, let’s dive in!

AI Market Overview

• Research indicates that in 2023, North America led the way in integrating Artificial Intelligence (AI) into healthcare.
• According to Geographical Research, the market size in North America is projected to surpass USD 187.95 billion by 2030, with an impressive anticipated Compound Annual Growth Rate (CAGR) of 37% from 2023 to 2030.
• According to Statista, the generative AI market is projected to hit USD 66.6 billion in 2024, accounting for nearly 22% of the overall AI market. Remarkably, this market size is expected to double to USD 131.8 billion by 2027!

What Is AI App or Software Development?

In order to gain a comprehensive understanding of AI App Development, it is crucial to analyze its fundamental elements. AI app development involves leveraging artificial intelligence technology to build applications that are smarter, more efficient, and more user-friendly. The process to develop an AI App consists of a number of key stages: 

• Selection of Right Significance
• Collection and preprocessing of data
• Training and optimizing models, 
• And finally, integrating those models into the application’s architecture.

Artificial intelligence relies heavily on extensive datasets to identify patterns and make accurate predictions in different domains. Developers often use machine learning or deep learning methods to train these models, enabling them to perform complex tasks such as image recognition, natural language processing, and forecasting. Once the model is fine-tuned using these advanced techniques, it is integrated into an app via an SDK or API, allowing it to process data in real time and provide users with valuable insights or recommendations.

Developing AI-driven applications requires a combination of coding expertise, extensive domain knowledge, and a strong understanding of AI methodologies. By combining these elements, developers have the ability to create solutions that not only fulfill user requirements, but also enhance their overall experience.

Also Read: 10 Uses of Artificial Intelligence in Mental Health

Crucial Factors That Influence The Cost Of AI Software Development

The cost to develop a fully functional AI app depends on many factors including app complexity, features, functionalities, design, maintenance and more. Let us have a look at the factors affecting the overall app development cost one by one.

App Complexity

The complexity of an AI app significantly impacts its development cost. AI apps are different from traditional applications because they utilize advanced algorithms, data processing, and machine learning models. Developing these apps requires specialized expertise in machine learning, deep learning, and data science.

For instance, developing a simple rule-based system is typically less complex and less expensive than creating an advanced deep learning neural network.

To start, consider the basic functions you need. Determine whether you can utilize existing solutions or if you’re willing to invest in building a custom solution from scratch. 

In addition, AI-driven apps often include features like payment gateways, social media integrations, user privacy measures, and audio/video streaming. Each of these components adds to the overall complexity and cost of development. Thus, the more advanced and feature-rich your AI application, the higher the investment required.

Project Scope

Projects can vary widely, from developing AI-powered chatbots to creating sophisticated applications like natural language processing engines or computer vision systems.

App Features & Functionalities

The core features and functionalities greatly affect the overall AI app or software development cost. For example, incorporating real-time data analysis that offers instant insights into user behavior and current trends can significantly increase development expenses. Similarly, adding a personalized recommendation system, which enhances user engagement, requires additional resources and contributes to higher costs. 

Design and Development Of AI Application

Highly engaging, and intuitive design is a must have for an AI application. A user-friendly design captures users' attention and guides them through various functionalities. Features like graphics, animations, and a compelling user interface boosts user engagement but also can drive up costs. A well-designed application not only enhances user experience but also plays a significant role in retaining users and ensuring continued engagement.

Location of Development Company

Location of AI software development company also plays a crucial role in estimating the AI app development cost. The labor costs vary from location to location. Like the cost of living is high in Silicon Valley in the US, so are the employees salaries. In countries with lower labor costs like India or Eastern Europe, you will find AI app development experts at affordable prices. Regulatory environments also affect the overall cost of the AI app development. 

Additional Resources

Training, Infrastructure and maintenance also impact the cost of AI applications. Models used in NLP and image recognition often require vast data to work on. To manage this data accurately additional resources such as powerful hardware, storage, and specialized tools are required, which in turn increases the cost. Additionally, ongoing maintenance to ensure the model’s performance and updates to keep up with new data or changing requirements further contribute to AI app development cost.

Platform Choice

Choosing the right platform is crucial, as it ensures your audience can access your application quickly and easily, directly impacting the overall cost. Business owners often prefer applications that are responsive across multiple platforms. This choice can significantly influence the cost of software development.

Technology Stack

Developing AI applications involves a range of technologies, including libraries, frameworks, and programming languages. Integrating these into your application requires investment not just in the technology itself, but also in skilled human resources. For instance, popular open-source tools like TensorFlow, Python, and Dialogflow are commonly used to build AI-driven apps, each bringing its own set of capabilities to the table.

Development Team Expertise

The reputation and expertise of your development team play a significant role in determining the cost of building an AI app. Hiring professionals from well-established and experienced teams might come with a higher cost, but they bring advanced services and a deeper understanding of the development process, ensuring a higher-quality product.

AI Software & App Development Cost Breakdown

Business-Size Wise AI App Development Cost

The size of a company significantly impacts its budget for AI development.

Industry-Wise AI Software & App Development Cost

Let’s explore the breakdown of AI app development costs across different industries.

AI Application Development Cost Based on App Type

Here is a brief on the average cost to develop an AI app for different kinds of applications.

AI App Development Cost Based On Development Phase

Below is a quick overview of the various development stages, along with a brief description and estimated costs for each:

Also Read: How Does AI Reduce Costs In Healthcare

How Much Does Artificial Intelligence cost?

The average cost to develop AI based solutions usually ranges from $50,000 to $200,000. This is just a general cost estimate, as the actual cost can vary based on several factors, including the complexity of the project, the features and functionalities required, and the developer's rates, among others.

How Long Does AI Development Take?

The time required to develop an AI solution depends on various factors, with complexity being the most significant.

How DITS Can Help You Develop AI Solution?

With over 7 years of experience, our team brings deep expertise in AI solutions. We’re here to help you select and implement the best AI options tailored to your budget and needs.

Here’s how we can support you:

Integration of Third-Party AI

With DITS, you can effortlessly integrate advanced third-party AI solutions, including large language models (LLMs) and other generative AI tools, into your existing systems. This allows you to take advantage of cutting-edge AI advancements without the hassle of extensive development.

Custom AI Development

For bespoke AI applications, we begin with a Proof of Concept (PoC) to ensure resource efficiency and project feasibility. Our Agile approach involves iterative development cycles, allowing us to refine your AI solution gradually, minimize risks, and enhance effectiveness.

If you're unsure about calculating the final cost of your AI project, just reach out to us. We’re here to assist you through every step of the process.

Round-the-Clock Support

Our dedicated team of project managers, designers, and developers is available 24/7 to address any concerns. Whether you need to add new features or enhance your project, don’t hesitate to reach out at any time. Our customer service representatives are here to assist you around the clock.

Comprehensive Testing

Our top priority is delivering the best AI solutions and an outstanding user experience to our clients. Our QA Team achieve this through rigorous, multi-level testing of each AI solution, meticulously identifying and resolving any issues to ensure flawless performance.

FAQs

Why You Should Estimate The Cost Of AI Solution?

It's crucial to assess the cost of your AI solution for several key reasons. First and foremost, having a clear understanding of the investment required helps stakeholders make informed decisions about budgeting and resource allocation. Accurate cost estimates not only gauge the feasibility of your AI project but also ensure it aligns with both your strategic goals and financial constraints. By anticipating expenses related to software development, data acquisition, infrastructure, and personnel, organizations can pinpoint potential challenges and address them proactively.

Is It Worth Investing In AI App Development?

AI-powered apps have the potential to evolve and enhance over time. Artificial intelligence can open up new revenue streams through innovative features like predictive analytics and recommendation systems. From healthcare to finance, AI applications are transforming processes, improving decision-making, and cutting operational costs. As AI technologies become more accessible and affordable, even smaller businesses can leverage them to drive innovation and growth.

What is MVP in AI App Development?

Minimum viable product (MVP) in AI app development is essentially the initial version of the software that includes just enough features to address a specific problem or meet a defined purpose. This early version focuses on integrating key functionalities and processing essential criteria to deliver valuable insights or solutions. 

Why Do I Need AI For My Business?

Here’s a list of top reasons why integrating AI into your business can be a game-changer:

• AI optimizes processes by automating repetitive tasks and streamlining operations.
• AI has the potential to process and analyze vast amounts of data quickly, extracting actionable insights.
• AI-powered chatbots provide personalized experiences, and efficient support services.
• AI solutions help optimize strategies, and adapt swiftly to market trends.
• AI can help forecast trends, customer behaviors, and market shifts.