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Global Artificial Intelligence (AI) Market Size, Share, Trends, COVID-19 Impact & Growth Forecast Report – Segmented By Offering (Hardware, Software and Services), Technology (Machine Learning and Natural Language Processing), Business Function (Marketing and Sales, Security, Finance, Law and Human Resources), Deployment Mode (Cloud and On-premises) and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) - Industry Analysis (2023 to 2028)

Published: March, 2023
ID: 8308
Pages: 170
Formats: report pdf report excel report power bi report ppt

Global Artificial Intelligence (AI) Market Size (2023 to 2028)

The global artificial intelligence (AI) market is expected to reach USD 1042.05 billion by 2028 from USD 212.48 billion in 2023, 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.

Global Artificial Intelligence (AI) Market Drivers:

The primary factor attributing to the growth of the global artificial intelligence (AI) 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 to identify new threats and anomalies, 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.

Global Artificial Intelligence (AI) 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 is 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 for 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.

Impact of COVID-19 on the global artificial intelligence (AI) market:

The COVID-19 pandemic had a mixed impact on the global artificial intelligence market. The lockdown situation across the world along with strict government restrictions forced companies to halt research and development activities, thereby impacting the innovations in the artificial intelligence market. Also, the COVID-19 pandemic led to a change in priorities for people and companies, resulting in postponement and delays in the launch of novel technologies. In all the sectors, the major focus was shifted towards immediate needs, affecting the demand in the artificial intelligence market. Further, the strict social distancing measures, travel limitations, and other safety measures negatively impacted the AI conferences and business meetings. On the other hand, the emphasis on digitization during the pandemic has contributed hugely to investments in automation and artificial intelligence solutions. The worldwide requirement to reduce direct human contact and manual intervention in processes created an augmented demand for automated solutions, robotic processes, and intelligent systems. In addition, the medical sector registered a great demand for AI in diagnostic procedures and patient remote monitoring, which is predicted to expand in the coming years. Also, with the lockdown conditions, education institutions shifted to online classes which led to an exponential growth of the EdTech industry, which is a positive aspect for the AI market. Moreover, the improved remote work culture and virtual communications, along with e-commerce applications are foreseen to propel the artificial intelligence market.

REPORT COVERAGE:

REPORT METRIC

DETAILS

Market Size Available

2022 to 2028

Base Year

2022

Forecast Period

2023 to 2028

CAGR

7.78%

Segments Covered

By Offering, Business Function, Deployment Mode and Region

Various Analyses Covered

Global, Regional and country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities

Regions Covered

North America, Europe, Asia Pacific, Latin America, Middle East & Africa

Market Leaders Profiled

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

 

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

Global Artificial Intelligence (AI) Market – By Offering:

  • Hardware
  • Software
  • Services

Based on the offering, the software segment dominated the global artificial intelligence market and accounted for a global share of 44.8% in 2022 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 2022 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 (AI) Market – By Technology:

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

Based on technology, the machine learning segment accounted for a significant portion of the global artificial intelligence market in 2022. 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 (AI) Market – By Business Function:

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

The service and operations segment dominated the global AI market in 2022 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 – By End Use:

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

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.

Global Artificial Intelligence (AI) Market – By Region:

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

Based on the region, North America recorded the lion’s share in the global artificial intelligence market in 2022. 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 for AI developments in 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:

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.

NOTABLE HAPPENINGS IN THIS MARKET IN THE RECENT PAST:

  • 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.

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FAQ's

1. What is the size of the artificial intelligence market?

The artificial intelligence market size was estimated at USD$ 52.6 billion in 2021 and estimated to reach USD$ 67.6 billion in 2021

2. What is the artificial intelligence market growth?

The artificial intelligence market is expected to grow at a compound annual growth rate of 28.5% from 2022 and 2027 to reach USD$ 236.8 billion in 2027

3. What are the key drivers supporting the growth of the market?

The key drivers for artificial intelligence market growth includes growth of data-based AI and advancement in deep learning and the need of automation and robots in the industries.

 

4. Which region held the largest market share?

North America has accounted the largest market share of over 40.1% of global AI market in 2021

5. Which solution segment led the artificial market growth?

Software solution segment led the artificial market during the forecast period.

6. Who are the end users of AI solutions and services?

The key verticals adopting AI includes BFSI, Government & Defense, Healthcare and Life Sciences, Retail & e-commerce, Manufacturing, Energy & Utilities, Automotive and other (Education, Media and Entertainment, Travel and Hospitality

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