ABI Research, a global technology intelligence firm, forecasts that revenue from AI-driven automation will surpass US$5 billion by 2035, as manufacturers rebuild control engineering foundations around virtualization and software-defined architectures. The projection reflects structural change across industrial manufacturing — not a discrete product category or a single technology cycle.
The Rebuild Happening on the Factory Floor
The pressure ABI Research identifies is manufacturers' demand for greater operational flexibility. Traditional control engineering has been built around fixed, proprietary hardware — the layer that governs how machines, lines, and facilities coordinate. Manufacturers are now redesigning that layer in software, using virtualization to decouple automation logic from dedicated physical controllers.
That separation is what gives the market its scale. When control functions run in software rather than on bespoke hardware, manufacturers can reconfigure, update, and expand automation without the lead times and capital commitments that hardware replacement carries.
AI as the Adaptive Layer in a Virtualized Stack
Artificial intelligence enters where rule-bound automation reaches its limits. ABI Research describes virtualization and AI as jointly reshaping the software-defined automation market — virtualization supplies the platform flexibility, AI supplies the decision-making capability that responds to variable conditions at the production level.
The two are not interchangeable in this framing. Virtualization without AI produces a more reconfigurable but still static system. AI without a virtualized control layer has limited reach into core operational logic. The revenue opportunity ABI Research is sizing depends on both being present in the same architecture.
A Nine-Year Build-Out, Not a Single Cutover
The 2035 timeline reflects how industrial capital investment actually moves. Control infrastructure is not retired on short cycles, and manufacturers redesigning around virtualization are doing so incrementally across existing and new installations alike.
ABI Research's forecast captures the cumulative revenue as that transition extends through the installed base of global manufacturing. The software-defined automation market is the organizing category the firm uses — a market it now describes as actively being reshaped by the convergence of virtualization investment and AI deployment at the control layer.