Artificial Intelligence Market Size, Share, Growth Analysis, By Product & Service, By Technology(Machine Learning, Natural Language Processing ), By Industry, By Region - Industry Forecast 2024-2031

Artificial Intelligence Market size was valued at USD 157.8 Billion in 2022 and is poised to grow from USD 285.9 Billion in 2023 to USD 1,047.0 Billion by 2031, at a CAGR of 15.92% during the forecast period (2024-2031).

Artificial Intelligence (AI) is a technology enabling computers to mimic human intelligence and problem-solving abilities, often in conjunction with other technologies like geolocation, sensors, and robotics to handle tasks traditionally requiring human intervention. Examples of AI in everyday use include digital assistants, autonomous vehicles, GPS navigation systems, and tools such as ChatGPT. The increasing demand for faster computations and the use of data-driven AI are key drivers propelling market growth. Advances in computing power have significantly boosted AI capabilities, with Moore's Law indicating a doubling of resources required to train large AI models approximately every 3.4 months, compared to the previous two-year cycle. This rapid progress underscores the exponential evolution of AI technology, enhancing its performance and availability. Moreover, many robotics startups are integrating AI to develop and automate new systems. For instance, firms like Olis Robotics are innovating with plug-and-play controls enhanced by AI-powered software. At Oxford University, AI advancements have led to new software capable of individually identifying and tracking endangered species like chimpanzees in their natural habitats, aiding conservation efforts more efficiently and reducing time and resource expenditures. Innovations in deep learning further enhance AI capabilities by improving image and voice recognition and natural language processing, expanding its efficiency and accuracy in various applications.

Top-down and bottom-up approaches were used to estimate and validate the size of the Artificial Intelligence Market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Artificial Intelligence Market Segmental Analysis

Global Artificial Intelligence Market is segmented into product & service, technology, industry, and region. By product & services, it is segmented Hardware, Software, Services. Further, hardware is bifurcated into Central Processing Units, Graphics Processing Units, Tensor Processing Units, and Application-Specific Integrated Circuits. Software is bifurcated into On-premises & cloud. By technology, it is segmented into machine learning, natural language processing (NLP), generative AI, robotics, computer vision, Autonous & Sensor technology. Machine learning is further bifurcated into Deep learning & Predictive analytics. By industry, the market is segmented into technology and communication, automotive & assembly, financial services, healthcare, business, legal, & professional services, consumer goods/ retail, & others. By region, the market is segmented into North America, Asia Pacific, Europe, Latin America, and MEA.

Drivers of the Artificial Intelligence Market

The introduction of customizable AI models marks a significant advancement in the AI market. In 2024, Microsoft launched Model Customization for Azure AI, an engineering service aimed at accelerating co-innovation with customers to deliver personalized AI solutions. Unlike traditional offerings, this initiative facilitates close collaboration between selected customers and Microsoft's engineering and research teams to tailor AI models to specific needs. By democratizing AI adoption, Microsoft empowers companies, including those with limited AI expertise, to utilize pre-built tools and engage in model customization. This approach effectively lowers entry barriers and enhances the relevance of AI solutions, addressing diverse industry challenges and driving market growth.

Restraints in the Artificial Intelligence Market

Data privacy and security are top concerns for 80% of AI decision makers. Building trust with GenAI requires users to be confident their data is used responsibly. Unfortunately, only 10% of organizations have a reliable system to measure potential bias and privacy risks within their large language models (LLMs). This lack of transparency hinders adoption. In 2024, federal intelligence agencies warn that Generative AI poses threat to election security. The legal landscape surrounding GenAI is still evolving, and many businesses are unprepared. A staggering 93% of U.S. companies lack a comprehensive governance framework for GenAI, leaving them vulnerable to non-compliance with upcoming regulations.

Market Trends of the Artificial Intelligence Market

The rise in consumer adoption of AI-powered devices signifies a substantial trend driving demand in the AI market. As consumers increasingly integrate AI-powered devices like smart speakers, virtual assistants, and smart home systems into their daily lives, there is a corresponding surge in demand for products offering these capabilities. In 2022, 62% of adults in the United States use voice-assisted devices, while 100 million individuals, comprising 35% of adults aged 18 and above, own at least one smart speaker. This represents a notable increase from 82 million people, or 32% of the same demographic, who owned smart speakers in 2021. The widespread acceptance of voice-assisted devices and smart speakers among Americans underscores a growing appetite for advanced AI solutions.