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Global Artificial Intelligence Market Size and Share Analysis 2023-2028
The global artificial intelligence market is set to experience significant growth, with projections indicating an increase from USD 73.93 billion in 2022 to USD 355.54 billion by 2028, at a Compound Annual Growth Rate (CAGR) of 31.2% during the forecast period spanning from 2023 to 2028.
Artificial intelligence (AI) refers to the simulation of human intelligence by machines through algorithms to automate and perform tasks commonly done by humans. It is an interdisciplinary science with multiple approaches, but advancements in machine learning and deep learning are driving a paradigm shift across various tech industry sectors.
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USD 73.9 billion in 2021
Components, End-user Industry, and Geography
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Particularly, computer vision and machine learning (ML) in the field of artificial intelligence are revolutionizing industries. The global expansion of the artificial intelligence market is driven by breakthroughs in deep learning and data-driven AI, and the need for robotic autonomy to stay competitive in the global market is expected to drive the adoption of AI products and services.
In recent years, the growing use of digital technologies and the Internet has significantly contributed to the expansion of the global AI industry. Large research and development investments by tech giants continue to fuel technology breakthroughs in various sectors.
The growth of predictive analytics solutions based on AI-driven ML technology is expected to propel the artificial intelligence market during the forecast period. Many end-user companies worldwide are using predictive modeling for industry planning and growth.
The increasing Internet penetration and advancements in technologies such as the Internet of Things (IoT), Industry 4.0, and 5G have led to a tremendous rise in global data creation. Big data, a consequence of these technological advancements, plays a crucial role in driving the adoption of AI.
The COVID-19 pandemic had a significant impact on the AI market, with some industries experiencing an increase in AI adoption while others faced a decline. The crisis provided valuable insights into the importance of digital transformation for businesses. Data analytics and AI proved to be potent tools for organizations to navigate the challenges posed by the pandemic.
For instance, AI played a pivotal role in enabling the public sector to bring processes, people, and services online, empowering governments at various levels to combat the virus. Governments worldwide quickly learned to utilize artificial intelligence for tasks like public education, patient screening, and contact tracing.
The shift to remote work, known as work from anywhere, created a need for rapid assistance and support for employees. Traditional service desks, due to their limitations in terms of scale and speed, could no longer provide real-time, round-the-clock support to a hybrid workforce. In response to this, Tata Consultancy Services (TCS) announced a partnership with Moveworks in July 2022, introducing an AI platform that offers seamless multilingual support to employees, addressing their needs promptly. Such initiatives are expected to drive the demand for digital transformation and contribute to market growth in the post-COVID-19 scenario.
The market is segmented based on various factors, including components, end-user industry, and geography.
Segmentation by Components
Software and Services
Segmentation by End-user Industry
Fashion and Retail
Healthcare and Lifesciences
Aerospace and Defense
Other End-user Industries
Segmentation by Geography
North America – United States, Canada
Europe – United Kingdom, Germany, France, Rest of Europe
Asia-Pacific – China, Japan, India, South Korea, and Rest of Asia-Pacific
Middle East and Africa
The artificial intelligence market is characterized by a high level of fragmentation, with the software and services segment holding the largest market share of 70.17% in 2022. This segment is expected to exhibit the highest compound annual growth rate (CAGR) of 32.66% over the forecast period (2023-2028). Cloud-based solutions play a crucial role in the contemporary digital environment, fueled by the increasing trend of multi-cloud operations and the growing demand for cloud-based intelligence services. The integration of the latest AI technologies into cloud computing adds unique value, enhancing overall process viability and facilitating the incorporation of new technologies. AI software contributes to bridging the gap between cloud computing and modern breakthroughs, catering to the needs of new enterprises and startups. Notably, a significant number of respondents have already been leveraging multi-cloud to access various application services such as AI/ML, big data analytics, business intelligence, and IoT, as indicated by a study conducted by IBM in 2022.
To meet continuous operations and infrastructure demands, there is a rising requirement for hybrid computing models that provide long-term cost reduction, enhanced security, and scalability. Consequently, investment in hybrid public cloud deployment models, spanning private, public, and edge environments, has seen considerable growth. A concrete example of this trend is Oracle’s decision in February 2023 to establish a third public cloud in Saudi Arabia, addressing the escalating demand for its cloud services. This cloud region, located in Riyadh, is part of Oracle’s ambitious USD 1.5 billion investment plan aimed at enhancing cloud infrastructure capabilities in the country.
SAS, a pioneer in analytics, entered into a strategic arrangement with Moro Hub in July 2022, leveraging Moro Hub’s superior cloud services to strengthen its AI-based solutions for businesses in Dubai. The collaboration with Moro Hub, a part of Dubai Electricity and Water Authority’s digital arm, Digital Dewa, enables SAS to utilize multiple cloud services on a single platform, enhancing agility, scalability, and security for its data management products.
The cloud method is gaining popularity across various industries, such as financial services, e-commerce, and industrial sectors, due to its benefits, including scalability, increased productivity, and cost reduction. In particular, the application of cloud computing to power applications like 3D printing for outsourcing 3D prototypes, components, and products is rapidly expanding, facilitated by new platforms introduced by 3D printing manufacturers. For instance, Markforged, a notable metal and carbon fiber 3D printer manufacturer, recently launched the Digital Forge, an industrial 3D printing software platform connecting thousands of Markforged systems worldwide.
In terms of market segmentation, the fashion and retail segment held the largest market share of 23.93% in 2022, projected to grow at a CAGR of 29.7% over the forecast period (2023-2028). This growth is attributed to the increasing demand for superior surveillance and monitoring at physical stores, the adoption and application of AI in the retail industry, enhanced productivity, improved user experience, inventory accuracy, and supply chain optimization.
Geographically, North America dominated the market in 2022, with a market share of 57.12%. However, the Asia Pacific region is anticipated to witness the highest CAGR of 36.52% during the forecast period (2023-2028). The United States, in particular, benefits from a robust innovation ecosystem, supported by strategic federal investments in cutting-edge technology, renowned research centers, and forward-thinking scientists and entrepreneurs, accelerating the development of AI in the North American region. The US government’s initiatives related to AI, such as the Expanding AI Innovation through Capacity Building and Part II program, seek to increase the participation of institutions serving underrepresented groups in AI education, research, and workforce development. The formalization of the National Artificial Intelligence (AI) Initiative further fosters advancements in AI across multiple strategic pillars, including trustworthy AI, enhanced innovation, infrastructure development, education and training, utilization in private and federal sectors, and international cooperation.
Canada also demonstrates a growing need for AI, with significant contributions from the public and private sectors. The country’s favorable factors, such as top researchers, vibrant start-ups, open immigration rules, and tax subsidies for R&D, attract major corporations like Google, Facebook, and Uber, resulting in numerous research collaborations across Canada. The Canadian government further supports AI leadership through various initiatives conducted by the Canadian Institute for Advanced Research (CIFAR).
The artificial intelligence market exhibits a high level of fragmentation, featuring prominent players such as IBM Corporation, Intel Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), and Amazon Web Services Inc. These key players employ diverse strategies, including partnerships, innovations, mergers, and acquisitions, to augment their product offerings and achieve sustainable competitive advantages.
In July 2022, HDFC, a major Non-Banking Financial Company (NBFC), announced its collaboration with Salesforce, the leading customer relationship management (CRM) platform, to support its growth priorities. HDFC emphasized that Mulesoft’s innovative API-led integration approach and low code integration capabilities would accelerate the company’s ability to innovate by facilitating seamless connections between systems and enabling the creation of novel customer experiences.
Similarly, in July 2022, SAS and Basserah forged a partnership aimed at delivering cutting-edge data analytics and AI solutions to businesses in Saudi Arabia. Through this collaboration, both companies concentrate on data and robotics process automation, targeting growth opportunities within the Kingdom of Saudi Arabia.
Key companies profiled in this report include IBM Corporation, Intel Corporation, Microsoft Corporation, Google LLC (alphabet Inc.), Amazon Web Services Inc. (amazon.com Inc.), Oracle Corporation, Salesforce Inc., Sap SE, Sas Institute Inc., Cisco Systems Inc., Siemens AG, Nvidia Corporation, Hewlett Packard Enterprise.
Recent Industry Developments
In February 2023, SAS Institute Inc. became a member of the Clean Energy Smart Manufacturing Innovation Institute (CESMII) – a distinguished Smart Manufacturing Institute. The primary objective of this alliance is to further promote the application of advanced analytics and artificial intelligence (AI) within the manufacturing industry.
In October 2022, Delta Bravo Artificial Intelligence Inc. was accepted into the esteemed Cisco Digital Solutions Integrator (DSI) Program. This program carefully selects strategic partners from Cisco’s extensive global partner network to offer exclusive value and perspectives to Cisco’s most significant clientele. As part of this collaboration, Cisco and Delta Bravo will work together to furnish manufacturing customers with a state-of-the-art network and security architecture, effectively supporting initiatives revolving around the Internet of Things (IoT), predictive analytics, and artificial intelligence (AI) across various plants and facilities.
Key Questions Answered
What is the study period of this market?
The study period of the Artificial Intelligence Market spans from 2018 to 2028.
What is the growth rate of the Artificial Intelligence Market?
The Artificial Intelligence Market is projected to grow at a remarkable Compound Annual Growth Rate (CAGR) of 31.22% over the next 5 years.
Which region has the highest growth rate in the Artificial Intelligence Market?
The Asia-Pacific region demonstrates the highest CAGR growth over the period of 2018 to 2028.
Which region has the largest share in the Artificial Intelligence Market?
As of 2022, North America holds the highest market share in the Artificial Intelligence Market.
Who are the key players in the Artificial Intelligence Market?
The major companies operating in the Artificial Intelligence Market include IBM Corporation, Intel Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), and Amazon Web Services Inc. (amazon.com Inc.).