Artificial Intelligence Market

Global Artificial Intelligence Market Size (2024 to 2032)

The global artificial intelligence (AI) market is predicted to reach USD 292.03 billion in 2024 and is expected to reach USD 3,718.20 billion by 2032, growing at a compound annual growth rate (CAGR) of 37.44% during the forecast period.

Artificial intelligence (AI) is the recent technological advancement that involves the simulation of human intelligence by computer systems. Speech recognition, natural language processing, computer vision, and expert systems are some of the major applications of artificial intelligence. AI is the future of the world, where machines can think and act without any human intervention to perform certain tasks. From a simple Chatbot to the diagnosis of chronic diseases, AI is likely to be integrated into all sectors in the following years.

MARKET DRIVERS

The primary factor attributing to the growth of the global artificial intelligence market is the latest improvements in machine learning (ML) and deep learning (DL) technologies.

ML and DL allow artificial intelligence systems to learn from large datasets and make predictions to support decision-making and business development. Also, the augmenting trend of big data and unstructured data from various sources such as financial institutions, social media, connected devices, and websites is leading to the increased use of AI to analyze and identify useful insights. In addition, all the companies are transitioning from on-premises to cloud computing because of the cost-effectiveness and scalability with increased security, driving the demand for more AI applications. Besides, the added advantage of automation in repetitive tasks to reduce time and expenditure is supporting the global artificial intelligence (AI) market.

The spike in the use of natural language processing in chatbots, virtual assistants, and web applications to understand and respond in human-interpretable language is further promoting the global AI market growth. Also, the surge in the adoption of edge computing to work on real-time data encourages the use of advanced AI solutions in connected devices. In addition, the governments’ supportive initiatives and investments in AI research and development are contributing to the growth of the artificial intelligence market. Besides, the integration of AI technology in areas like cybersecurity, finance, healthcare, automotive, and manufacturing is promoting the adoption of AI in the international marketplace.

In the healthcare industry, AI is majorly employed in disease diagnosis, medical imaging, drug formulation, and cancer prediction.

Artificial intelligence also plays a pivotal role in cybersecurity, identifying new threats and anomalies and improving the overall security standards for enterprises. In the finance sector, AI helps analyze huge financial data and interpret patterns that assist in decision-making, fraud identification, trading, and enhanced customer service. In the automobile industry, there are huge investments in the development of autonomous vehicles, where AI is pivotal for pedestrian or vehicle recognition, navigation, and collecting driving data. Similarly, in the manufacturing processes, AI offers benefits like quality control, automation of production lines, timely maintenance, and optimization. Besides, the rapid advances in online sales and customized marketing to improve user experience also boost the global artificial intelligence market. Moreover, the flourishing need for AI in various process improvements, the burgeoning trend of the Internet of Things (IoT) and Industry 4.0, and the integration of AI into environmental activities are likely to generate more opportunities for the artificial intelligence market in the following years.

MARKET RESTRAINTS

Although AI offers huge advantages, there are some areas that should be addressed. The major limitation of the artificial intelligence market is the concerns associated with the biases in algorithms and lack of accountability in AI solutions. Also, the issues related to transparency in deep learning models and predictive analyses are a challenge for the AI market. In addition, there is a huge complexity involved in data privacy and security to avoid misuse of AI models and developed data insights, hindering the market adoption. Besides, the expenses associated with the development of the AI infrastructure, coupled with the maintenance and recruitment of an experienced workforce, are also a challenge. There is a huge shortage of skilled data engineers, data scientists, and machine learning architects, which limits rapid developments in the market.

Also, the lack of proper standards for the implementation of AI infrastructure in different parts of the world, along with the complexity involved in the integrity of AI and automated solutions to the traditional systems, is acting negatively on the artificial intelligence market.

The unpredictable outcomes, false positives, and false negatives due to the use of deep learning and machine learning techniques can also hamper the adoption of AI by some market players. Furthermore, employee concerns related to the replacement of humans by AI through automation of repetitive tasks are creating a huge restraint to the artificial intelligence market. Moreover, doubts about the overhyped expectations, interoperability complexities, use of artificial intelligence for illegal practices, and the use of high computation power and energy for the integration of AI solutions are likely to pose a threat to the international AI market.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Artificial Intelligence Market Analysis By Offering

Based on the offering, the software segment dominated the global artificial intelligence market and accounted for a global share of 44.8% in 2023 and is likely to continue its dominion in the forecast period. The booming applications of artificial intelligence in the enhancement of digital applications and delivery of enhanced customer services are promoting growth in the software segment in the worldwide AI market.

The hardware segment was the second largest segment in the global AI market in 2023 and held 31.4% of the global market share. The hardware segment is estimated to grow substantially during the forecast period. Similarly, the services segment is anticipated to record notable growth in the following years owing to the development of deep learning and smart monitoring products by the companies.

Global Artificial Intelligence Market Analysis By Technology

Based on technology, the machine learning segment accounted for a significant portion of the global artificial intelligence market in 2023. In particular, the deep learning applications of machine learning found huge demand because of its advantages such as data insights, speech recognition, and predictive models for the growth of enterprises. The capability of machine learning to 8develop interpreting and predictive models and enhance operational efficiency in multiple industries is primarily supporting the growth in of the machine learning segment in the global AI market.

The natural language processing segment is also expected to witness considerable growth in the foreseen period due to the increasing integration of customer support services, intelligent systems, online business promotions, and data-driven decisions.

On the other hand, the computer vision segment is predicted to grow at a noteworthy CAGR during the forecast period because of its applications in facial recognition, augmented reality, and autonomous vehicles.

Global Artificial Intelligence Market Analysis By Business Function

The service and operations segment dominated the global AI market in 2023 and is estimated to grow promisingly during the forecast period owing to the surging emphasis on consumer satisfaction and decreasing service management hassles. The increased efficiency in business operations and time savings encouraged companies to introduce AI in these business functions. Similarly, supply chain management and marketing & sales functionalities are touted to register noteworthy growth in the coming years.

Global Artificial Intelligence (AI) Market Analysis By End Use

Based on end-users, the information technology segment is the most prominent end-user of the global artificial intelligence market. The rapid digitization across the world and the transition to cloud platforms for enhanced security and scalability of operations have promoted the adoption of AI in the IT sector.

The BFSI is another crucial segment that employs AI in operations like fraud detection, loan processing, credit score monitoring, and other financial operations. The continuous demand for undisputed financial services is boosting the adoption of AI tools in the BFSI sector. Also, the need to reduce daily repetitive activities and errors in human operations is supposed to contribute positively to this segment's growth.

REGIONAL ANALYSIS

Based on the region, North America recorded the lion’s share in the global artificial intelligence market in 2023. The USA is the leading nation in this region due to the presence of some of the key players, technical innovations, and high demand for AI tools in multiple industries. The flourishing need for automation and supportive government regulations like the American AI initiative are creating a positive outlook for the market in this area. Canada is also a prominent region in North America that offers a huge scope for business growth in the coming years.

The Asia Pacific region is foreseen to record the highest growth rate in the outlook period due to the expanding investments in artificial intelligence and the shift towards cloud computing. The increasing foreign investments and start-up culture in nations like India, Japan, and China are creating a positive environment for the Asia Pacific artificial intelligence market. Similarly, the surge in the adoption of AI tools in industries like healthcare, automobiles, and manufacturing processes is promoting the local market. Moreover, the spike in funding for research and development activities further propels the AI market in the APAC countries.

Europe is also a significant market that will grow at a notable rate in the future owing to the latest innovations and government grants for novel technologies. Germany and the United Kingdom are the prominent nations that are involved in AI developments on this continent. The implementation of AI solutions in industries like IT, automobiles, and entertainment & media is boosting the European artificial intelligence market.

Latin America is an emerging region in the global artificial intelligence market because of the recent improvements in the local economy and supportive government initiatives for research activities. Brazil is the leading nation in this market, with the increasing demand for smart tools and the use of AI in business activities.

The Middle East and Africa region has a relatively smaller presence in the global artificial intelligence market. However, the latest technological developments, expansion of internet connectivity, and investments into digital infrastructure are supposed to create more business opportunities for this region in the future.

KEY MARKET PLAYERS IN THE GLOBAL ARTIFICIAL INTELLIGENCE (AI) MARKET

Microsoft Corporation, Google Inc., IBM, Oracle Corporation, Apple Inc., Amazon Web Services, SAP, Salesforce, Cisco, Meta (Facebook), Intel Corp, H2O.ai., Hewlett Packard Enterprise, Siemens AG, Huawei, NVIDIA, OpenAI, SAS Institute, Baidu, Alibaba Cloud, AIBrain, Lumen5, Advanced Micro Devices, Iris.ai AS, Lifegraph, Sensely, Inc., and DiDi Global are the leading players in the global AI market.

RECENT HAPPENINGS IN THE GLOBAL ARTIFICIAL INTELLIGENCE (AI) MARKET

• In 2023, Elon Musk, known for Tesla and SpaceX, expanded his operations into artificial intelligence through his new company xAI and launched a Chatbot called Gork.
• In December 2023, Google launched its most powerful AI model called Gemini in competition with OpenAI’s ChatGPT. Available in three variants, Gemini comprises advanced language processing and is integrated with the company’s AI Chatbot, Bard.
• In November 2023, Forward, a healthcare company introduced its artificial intelligence-based and self-service unit called CarePod which offers advanced diagnostics, customized healthcare, and luxury experience to patients. These CarePods will be deployed in gyms, offices, and shopping malls as per the company plans.

DETAILED SEGMENTATION OF THE GLOBAL ARTIFICIAL INTELLIGENCE (AI) MARKET INCLUDED IN THIS REPORT

This research report on the global artificial intelligence market has been segmented and sub-segmented based on product type, end-user, distribution channel and region.

By Offering

• Hardware
• Software
• Services

By Technology

• Machine Learning
• Natural Language Processing
• Computer Vision
• Context Awareness

By Business Function

• Supply Chain Management
• Finance
• Law
• Human Resources
• Marketing & Sales
• Service & Operations
• Security

By End Use

• Information Technology
• BFSI
• Healthcare
• Automotive
• Retail & E-commerce
• Advertising & Media
• Manufacturing
• Transportation & Logistics
• Military & Defense
• Agriculture
• Energy & Utilities
• Telecommunication
• Others

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa