Explainable AI Market by Offering, Deployment, Application, End-Use

List of Tables

The Explainable AI Market was valued at USD 7.02 billion in 2023, expected to reach USD 8.42 billion in 2024, and is projected to grow at a CAGR of 20.24%, to USD 25.52 billion by 2030.

Explainable AI (XAI) refers to methodologies and techniques in artificial intelligence that make the decision-making process of models transparent and comprehensible to humans. This necessity arises as AI systems become more integral in critical areas such as healthcare, finance, and legal where understanding the reasoning behind AI decisions is crucial for compliance, trust, and accountability. XAI finds applications in diverse domains including but not limited to predictive maintenance, risk management, autonomous vehicles, and personalized medicine, providing actionable insights while fostering stakeholder confidence. The end-use scope is expansive, reaching sectors like banking, insurance, automotive, telecommunications, and beyond.

KEY MARKET STATISTICS
Base Year [2023]	USD 7.02 billion
Estimated Year [2024]	USD 8.42 billion
Forecast Year [2030]	USD 25.52 billion
CAGR (%)	20.24%

Key influencing growth factors for XAI include increasing regulatory scrutiny for AI transparency, the surge in demand for AI-driven decision support across various industries, and the rising awareness and concern about AI bias and fairness. Recent potential opportunities are emerging in formulating AI regulations and improving model resilience and interpretability techniques, thereby enhancing business transparency and competitive differentiation. Models such as LIME (Local Interpretable Model-agnostic Explanations) and SHAP (SHapley Additive exPlanations) exemplify opportunities to develop simpler, more interpretable AI systems.

However, challenges like the inherent complexity of deep learning models, potential trade-offs between accuracy and interpretability, and the lack of standardized explainability metrics impede broader adoption and development. Furthermore, the nascent stage of XAI research poses data privacy and security concerns which could influence regulatory frameworks adversely.

The best areas of innovation include integrating ethical AI frameworks, enhancing human-AI interaction through intuitive interfaces, and bolstering cognitive computing capacities with advanced data visualization tools. Businesses can drive growth by investing in R&D partnerships and collaborating with academic institutions to stay at the technological frontier. The nature of the XAI market is poised on rapid innovation, with a trajectory set towards robust integration into existing AI frameworks, offering enterprises a strategic leverage to enhance consumer trust and operational transparency.

Market Dynamics: Unveiling Key Market Insights in the Rapidly Evolving Explainable AI Market

The Explainable AI Market is undergoing transformative changes driven by a dynamic interplay of supply and demand factors. Understanding these evolving market dynamics prepares business organizations to make informed investment decisions, refine strategic decisions, and seize new opportunities. By gaining a comprehensive view of these trends, business organizations can mitigate various risks across political, geographic, technical, social, and economic domains while also gaining a clearer understanding of consumer behavior and its impact on manufacturing costs and purchasing trends.

Market Drivers
- Increasing need for transparency and interpretability in AI systems
- Growing adoption of AI across various industries worldwide
- Regulatory initiatives and guidelines emphasizing transparency and accountability
Market Restraints
- High cost of development of AI explainable solutions
Market Opportunities
- Continuous research & development to introduce novel AI explainable solutions
- Growing adoption of XAI that identifies and mitigates biases in AI models
Market Challenges
- Complexity in the integration of certain AI explainable solutions with AI systems

Porter's Five Forces: A Strategic Tool for Navigating the Explainable AI Market

Porter's five forces framework is a critical tool for understanding the competitive landscape of the Explainable AI Market. It offers business organizations with a clear methodology for evaluating their competitive positioning and exploring strategic opportunities. This framework helps businesses assess the power dynamics within the market and determine the profitability of new ventures. With these insights, business organizations can leverage their strengths, address weaknesses, and avoid potential challenges, ensuring a more resilient market positioning.

PESTLE Analysis: Navigating External Influences in the Explainable AI Market

External macro-environmental factors play a pivotal role in shaping the performance dynamics of the Explainable AI Market. Political, Economic, Social, Technological, Legal, and Environmental factors analysis provides the necessary information to navigate these influences. By examining PESTLE factors, businesses can better understand potential risks and opportunities. This analysis enables business organizations to anticipate changes in regulations, consumer preferences, and economic trends, ensuring they are prepared to make proactive, forward-thinking decisions.

Market Share Analysis: Understanding the Competitive Landscape in the Explainable AI Market

A detailed market share analysis in the Explainable AI Market provides a comprehensive assessment of vendors' performance. Companies can identify their competitive positioning by comparing key metrics, including revenue, customer base, and growth rates. This analysis highlights market concentration, fragmentation, and trends in consolidation, offering vendors the insights required to make strategic decisions that enhance their position in an increasingly competitive landscape.

FPNV Positioning Matrix: Evaluating Vendors' Performance in the Explainable AI Market

The Forefront, Pathfinder, Niche, Vital (FPNV) Positioning Matrix is a critical tool for evaluating vendors within the Explainable AI Market. This matrix enables business organizations to make well-informed decisions that align with their goals by assessing vendors based on their business strategy and product satisfaction. The four quadrants provide a clear and precise segmentation of vendors, helping users identify the right partners and solutions that best fit their strategic objectives.

Strategy Analysis & Recommendation: Charting a Path to Success in the Explainable AI Market

A strategic analysis of the Explainable AI Market is essential for businesses looking to strengthen their global market presence. By reviewing key resources, capabilities, and performance indicators, business organizations can identify growth opportunities and work toward improvement. This approach helps businesses navigate challenges in the competitive landscape and ensures they are well-positioned to capitalize on newer opportunities and drive long-term success.

Key Company Profiles

The report delves into recent significant developments in the Explainable AI Market, highlighting leading vendors and their innovative profiles. These include Abzu ApS, Alphabet Inc., Alteryx, Inc., ArthurAI, Inc., C3.ai, Inc., DarwinAI, DataRobot, Inc., Equifax Inc., Fair Isaac Corporation, Fiddler Labs, Inc., H2O.ai, Inc., Intel Corporation, Intellico.ai s.r.l, International Business Machines Corporation, ISSQUARED Inc., Kyndi, Inc., Microsoft Corporation, Mphasis Limited, NVIDIA Corporation, Salesforce, Inc., SAS Institute Inc., Squirro Group, Temenos Headquarters SA, Tensor AI Solutions GmbH, Tredence Analytics Solutions Pvt. Ltd., and ZestFinance Inc..

Market Segmentation & Coverage

This research report categorizes the Explainable AI Market to forecast the revenues and analyze trends in each of the following sub-markets:

Based on Offering, market is studied across Services and Software. The Services is further studied across AI/ML Enabled Service, Consulting Services, Cutting Edge AI/ML Research, Data Engineering Services, Data Science Advisory Services, and Training & Education Services. The Software is further studied across Automated Reporting Tools, Integrated Software, Interactive Visualization Platform, and Standalone Software.
Based on Deployment, market is studied across Cloud-based and On-premise.
Based on Application, market is studied across Drug Discovery & Diagnostics, Fraud & Anomaly Detection, Identity & Access Management, Predictive Maintenance, and Supply Chain Management.
Based on End-Use, market is studied across Aerospace & Defense, Automotive, Banking, Financial Services, & Insurance (BFSI), Energy & Utilities, Healthcare, IT & Telecommunications, Media & Entertainment, Public Sector & Government, and Retail & eCommerce.
Based on Region, market is studied across Americas, Asia-Pacific, and Europe, Middle East & Africa. The Americas is further studied across Argentina, Brazil, Canada, Mexico, and United States. The United States is further studied across California, Florida, Illinois, New York, Ohio, Pennsylvania, and Texas. The Asia-Pacific is further studied across Australia, China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. The Europe, Middle East & Africa is further studied across Denmark, Egypt, Finland, France, Germany, Israel, Italy, Netherlands, Nigeria, Norway, Poland, Qatar, Russia, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, and United Kingdom.

The report offers a comprehensive analysis of the market, covering key focus areas:

1. Market Penetration: A detailed review of the current market environment, including extensive data from top industry players, evaluating their market reach and overall influence.

2. Market Development: Identifies growth opportunities in emerging markets and assesses expansion potential in established sectors, providing a strategic roadmap for future growth.

3. Market Diversification: Analyzes recent product launches, untapped geographic regions, major industry advancements, and strategic investments reshaping the market.

4. Competitive Assessment & Intelligence: Provides a thorough analysis of the competitive landscape, examining market share, business strategies, product portfolios, certifications, regulatory approvals, patent trends, and technological advancements of key players.

5. Product Development & Innovation: Highlights cutting-edge technologies, R&D activities, and product innovations expected to drive future market growth.

The report also answers critical questions to aid stakeholders in making informed decisions:

1. What is the current market size, and what is the forecasted growth?

2. Which products, segments, and regions offer the best investment opportunities?

3. What are the key technology trends and regulatory influences shaping the market?

4. How do leading vendors rank in terms of market share and competitive positioning?

5. What revenue sources and strategic opportunities drive vendors' market entry or exit strategies?

Product Code: MRR-8265EDC497D9

1. Preface

1.1. Objectives of the Study
1.2. Market Segmentation & Coverage
1.3. Years Considered for the Study
1.4. Currency & Pricing
1.5. Language
1.6. Stakeholders

2. Research Methodology

2.1. Define: Research Objective
2.2. Determine: Research Design
2.3. Prepare: Research Instrument
2.4. Collect: Data Source
2.5. Analyze: Data Interpretation
2.6. Formulate: Data Verification
2.7. Publish: Research Report
2.8. Repeat: Report Update

3. Executive Summary

4. Market Overview

5. Market Insights

5.1. Market Dynamics
- 5.1.1. Drivers
  - 5.1.1.1. Increasing need for transparency and interpretability in AI systems
  - 5.1.1.2. Growing adoption of AI across various industries worldwide
  - 5.1.1.3. Regulatory initiatives and guidelines emphasizing transparency and accountability
- 5.1.2. Restraints
  - 5.1.2.1. High cost of development of AI explainable solutions
- 5.1.3. Opportunities
  - 5.1.3.1. Continuous research & development to introduce novel AI explainable solutions
  - 5.1.3.2. Growing adoption of XAI that identifies and mitigates biases in AI models
- 5.1.4. Challenges
  - 5.1.4.1. Complexity in the integration of certain AI explainable solutions with AI systems
5.2. Market Segmentation Analysis
- 5.2.1. Offering: Advancements in integrated software solutions for high data processing allows clearer analytics and decision-making processes
- 5.2.2. Deployment: Growing preference for cloud-based explainable AI deployment due to its affordability and ease of access
- 5.2.3. Application: Expanding application of explainable AI in drug discovery and diagnostics for personalized treatment
- 5.2.4. End-Use: Emerging application of explainable AI in aerospace and defense sector enabling transparent decision making and risk analysis
5.3. Porter's Five Forces Analysis
- 5.3.1. Threat of New Entrants
- 5.3.2. Threat of Substitutes
- 5.3.3. Bargaining Power of Customers
- 5.3.4. Bargaining Power of Suppliers
- 5.3.5. Industry Rivalry
5.4. PESTLE Analysis
- 5.4.1. Political
- 5.4.2. Economic
- 5.4.3. Social
- 5.4.4. Technological
- 5.4.5. Legal
- 5.4.6. Environmental

6. Explainable AI Market, by Offering

6.1. Introduction
6.2. Services
- 6.2.1. AI/ML Enabled Service
- 6.2.2. Consulting Services
- 6.2.3. Cutting Edge AI/ML Research
- 6.2.4. Data Engineering Services
- 6.2.5. Data Science Advisory Services
- 6.2.6. Training & Education Services
6.3. Software
- 6.3.1. Automated Reporting Tools
- 6.3.2. Integrated Software
- 6.3.3. Interactive Visualization Platform
- 6.3.4. Standalone Software

7. Explainable AI Market, by Deployment

7.1. Introduction
7.2. Cloud-based
7.3. On-premise

8. Explainable AI Market, by Application

8.1. Introduction
8.2. Drug Discovery & Diagnostics
8.3. Fraud & Anomaly Detection
8.4. Identity & Access Management
8.5. Predictive Maintenance
8.6. Supply Chain Management

9. Explainable AI Market, by End-Use

9.1. Introduction
9.2. Aerospace & Defense
9.3. Automotive
9.4. Banking, Financial Services, & Insurance (BFSI)
9.5. Energy & Utilities
9.6. Healthcare
9.7. IT & Telecommunications
9.8. Media & Entertainment
9.9. Public Sector & Government
9.10. Retail & eCommerce

10. Americas Explainable AI Market

10.1. Introduction
10.2. Argentina
10.3. Brazil
10.4. Canada
10.5. Mexico
10.6. United States

11. Asia-Pacific Explainable AI Market

11.1. Introduction
11.2. Australia
11.3. China
11.4. India
11.5. Indonesia
11.6. Japan
11.7. Malaysia
11.8. Philippines
11.9. Singapore
11.10. South Korea
11.11. Taiwan
11.12. Thailand
11.13. Vietnam

12. Europe, Middle East & Africa Explainable AI Market

12.1. Introduction
12.2. Denmark
12.3. Egypt
12.4. Finland
12.5. France
12.6. Germany
12.7. Israel
12.8. Italy
12.9. Netherlands
12.10. Nigeria
12.11. Norway
12.12. Poland
12.13. Qatar
12.14. Russia
12.15. Saudi Arabia
12.16. South Africa
12.17. Spain
12.18. Sweden
12.19. Switzerland
12.20. Turkey
12.21. United Arab Emirates
12.22. United Kingdom

13. Competitive Landscape

13.1. Market Share Analysis, 2023
13.2. FPNV Positioning Matrix, 2023
13.3. Competitive Scenario Analysis
- 13.3.1. Fujitsu collaborates with Informa D&B to incorporate explainable AI technology for financial-commercial information industry
- 13.3.2. GyanAI Launches the World's First Explainable Language Model and Research Engine
- 13.3.3. Temenos to Offer Explainable AI on Oracle Cloud Infrastructure
13.4. Strategy Analysis & Recommendation

Companies Mentioned

1. Abzu ApS
2. Alphabet Inc.
3. Alteryx, Inc.
4. ArthurAI, Inc.
5. C3.ai, Inc.
6. DarwinAI
7. DataRobot, Inc.
8. Equifax Inc.
9. Fair Isaac Corporation
10. Fiddler Labs, Inc.
11. H2O.ai, Inc.
12. Intel Corporation
13. Intellico.ai s.r.l
14. International Business Machines Corporation
15. ISSQUARED Inc.
16. Kyndi, Inc.
17. Microsoft Corporation
18. Mphasis Limited
19. NVIDIA Corporation
20. Salesforce, Inc.
21. SAS Institute Inc.
22. Squirro Group
23. Temenos Headquarters SA
24. Tensor AI Solutions GmbH
25. Tredence Analytics Solutions Pvt. Ltd.
26. ZestFinance Inc.