Explainable Ai Market - Forecasts from 2025 to 2030

The Explainable AI Market is expected to grow at a CAGR of 14.86%, reaching a market size of US$22.944 billion in 2030 from US$11.476 billion in 2025.

Explainable AI (AI) refers to artificial intelligence models designed to enhance accuracy, transparency, and understanding in AI-driven decision-making processes. It encompasses methods and practices that enable users to comprehend and trust the results generated by machine learning algorithms. As users often struggle to grasp how AI systems arrive at their conclusions, explainable AI addresses these challenges by fostering trust in the outcomes produced. Consequently, AI is essential for organizations utilizing AI, as it helps build consumer confidence and trust.The market for explainable AI is witnessing robust growth due to its increasing value across various industries. It plays a critical role in establishing trust in AI decision-making, managing risks associated with model governance, and accelerating AI implementation. The rising adoption of AI technologies in sectors such as healthcare and finance has intensified the demand for transparency in AI-generated decisions, further propelling market growth. Additionally, government regulations are emphasizing accountability and transparency within AI systems.

Key Growth Drivers

• Increasing AI Adoption Across Industries: The growing integration of AI into sectors like healthcare, finance, retail, manufacturing, e-commerce, and government services is driving the demand for explainable AI solutions. A recent SAP survey revealed that 96% of 2,000 respondents indicated executive mandates to explore and implement AI technologies in their operations. Furthermore, 52% of participants plan to increase their AI budgets by 25% to 50% over the next two years.
• Need for Trust and Transparency: As more organizations adopt AI technologies, there are challenges in understanding the decisions made by these systems. The demand for explainable AI is rising as organizations seek to ensure trust, confidence, and transparency in their decision-making processes. According to Stanford University's "Artificial Intelligence Index Report 2024," 44% of surveyed organizations identified transparency and explainability as key concerns regarding AI adoption.

Geographical Outlook

North America is projected to dominate the explainable AI market throughout the forecast period, with the United States leading this trend. The region's growth in the AI sector is significantly contributing to the expansion of explainable AI solutions. Strict regulations promoting transparency and accountability in decision-making further drive market growth. Research from Stanford University indicates that the U.S. is ahead of China, the EU, and the U.K. in producing top-tier AI models, with 61 notable models originating from U.S.-based institutions in 2023.The European market is also expected to grow substantially due to increased AI adoption and regulatory requirements like GDPR that foster demand for explainable AI solutions. Meanwhile, the Asia Pacific region will experience growth as countries such as China, Japan, South Korea, and India increasingly adopt AI technologies, boosting the need for AI solutions.

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Report Coverage:

• Historical data & forecasts from 2022 to 2030
• Growth Opportunities, Challenges, Supply Chain Outlook, Regulatory Framework, Customer Behaviour, and Trend Analysis
• Competitive Positioning, Strategies, and Market Share Analysis
• Revenue Growth and Forecast Assessment of segments and regions including countries
• Company Profiling (Strategies, Products, Financial Information, and Key Developments among others)

The Explainable AI market has been segmented as following:

By Type

• LIME (Local-Interpretable Model-Agnostic Explanations)
• SHAP (Shapely Additive Explanations)
• Partial Dependence Plots (PDP)
• Others

By Deployment

• On-Premises
• Cloud

By Application

• Error detection and Debugging
• Fraud Detection and Management
• Supply chain management and Predictive Maintenance
• Others

By Industry Vertical

• Healthcare
• Financial & Banking Services
• Government and Public sector
• IT and Telecommunication
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• United Kingdom
• Germany
• France
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Others
• Asia Pacific
• China
• Japan
• South Korea
• Australia
• India
• Indonesia
• Thailand
• Others