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2023

Artificial Intelligence (AI) Market

Artificial Intelligence (AI) Market Size, Share, Competitive Landscape and Trend Analysis Report by Component, by Technology, by Deployment Mode, by Enterprise Size, by Business Function, by Type, by Industry Vertical : Global Opportunity Analysis and Industry Forecast, 2024-2033

IC : Software and Services

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Author's: Shubham Vardam| Sourabh Ekre | Onkar Sumant
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Artificial Intelligence (AI) Market Statistics: 2033

The global artificial intelligence market size was valued at $153.6 billion in 2023, and is projected to reach $3,636 billion by 2033, growing at a CAGR of 37.3% from 2024 to 2033. Artificial intelligence is an area of computer science that focuses on developing and managing technology that learns to make choices and autonomously carries out transactions on behalf of humans. Presently, artificial intelligence algorithms are being tested against intelligence standards that are beyond human comprehension, such as artificial intelligence applications in supercomputers and quantum computers. Such advancements in artificial intelligence technology are expected to contribute to the development of the industry in the coming years.

Artificial Intelligence (AI) Market

Technical advancement is one of the key factors influencing the artificial intelligence market growth. In addition, the need for AI solutions is rising as artificial intelligence (AI) is widely utilized in a range of industries. This is attributed to developments in deep learning techniques, natural language processing, and machine learning algorithms. Further, the adoption of AI has been accelerated by the proliferation of big data and the rise in need for data analysis and insights since AI swiftly analyzes and draws actionable conclusions from large datasets.

Furthermore, the rise in use of AI in industries including healthcare, banking, automotive, and e-commerce has generated new development prospects. However, ethical and regulatory concerns surrounding AI's use restrain the artificial intelligence market growth. In addition, privacy issues, bias in algorithms, and the potential for job displacement are areas that require careful consideration and regulation. Moreover, the high cost of implementing AI solutions and the need for skilled AI professionals are barriers to adoption for many organizations. On the contrary, the growing interest in AI-driven automation and robotics is expected to fuel the growth of artificial intelligence market. AI-powered chatbots and virtual assistants are increasingly used in customer service and support, enhancing customer experiences. In addition, the ongoing development of edge AI, which enables AI processing on devices rather than in the cloud, is anticipated to provide lucrative opportunities in the internet of things (IoT) and edge computing.

The report focuses on growth prospects, restraints, and trends of the artificial intelligence market forecast. The study provides Porter’s five forces analysis to understand the impact of numerous factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the artificial intelligence market forecast.

The artificial intelligence (AI) industry is seeing numerous disruptive technological developments that are likely to reshape industries and drive innovation. One of the major developments is the integration of AI with edge computing, which enables quicker data processing and real-time analytics directly on devices, improving performance and lowering latency. Furthermore, the advent of generative AI models, such as OpenAI's GPT series, revolutionizes content creation, coding, and customized user experiences. AI-powered automation is also becoming more prevalent across numerous industries, simplifying processes, and enhancing efficiency through intelligent process automation. According to CompTIA, Inc., nearly 97% of mobile users are using AI-powered voice assistants and more than 4 billion devices already work on AI-powered voice assistants.

In addition, the proliferation of AI-as-a-Service (AIaaS) platforms is democratizing access to advanced AI capabilities, allowing businesses of all sizes to leverage sophisticated tools without significant upfront investments. These trends collectively highlight the dynamic evolution of the artificial intelligence market and its expanding impact on the global economy.

For instance, in May 2024, Rows raised 8 million euros (about $8.7 million) to expand its cloud-based, artificial intelligence (AI)-powered spreadsheet application. Rows will use the new funding to continue to accelerate data integrations, enhance its AI features, and expand in its biggest markets: the U.S., the UK, and Europe. For instance, in April 2024, Microsoft is planning for a new artificial intelligence (AI) hub in London, focused on product development and research. The unit will be led by Mustafa Suleyman, the London-born cofounder of Google DeepMind. For instance, in February 2024, Google introduced a free artificial intelligence app that will enable people to rely on technology instead of their brains to write, interpret what they are reading, and deal with a variety of other tasks in their lives.

Segment Review

The artificial intelligence market is segmented on the basis of component, technology, industry vertical, deployment, enterprise size, business function, type, and region. On the basis of component, the industry is categorized into hardware, software, and services. The services segment is further divided into implementation and integration services, training and maintenance services, and consulting services. Depending on technology, the market is classified into machine learning, natural language processing, computer vision, generative AI, deep learning, and others.

The generative AI segment is further fragmented into generative adversarial networks (GANs), transformer, variational autoencoder (VAE), diffusion networks, and retrieval augmented generation. By industry vertical, the market is segregated into IT & telecommunication, retail & e-commerce, BFSI, healthcare, manufacturing, automotive, agriculture, education, and media & entertainment. By deployment, the market is bifurcated into on-premises and cloud. On the basis of enterprise size, the market is divided into large enterprise and small and medium-sized enterprise. On the basis of business function, the market is categorized into sales & marketing, supply chain management, human resource management, finance & accounting, cybersecurity, legal & compliance, and operation. On the basis of type, the market is divided into pretrained models, customizable AI, edge AI, and AI marketplaces. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Artificial Intelligence (AI) Market by Technology

By technology, the machine learning segment acquired a major artificial intelligence market size in 2023. The is attributed to the fact that machine learning algorithms are designed to keep improving their accuracy and efficiency after each cycle, making them powerful tools for automating business operations that require constant decision-making. Such machine learning applications support it in becoming widespread across various industrial and commercial sectors, from agriculture to medical research, the stock market, and traffic monitoring.

Artificial Intelligence (AI) Market by Region

By region, North America dominated the artificial intelligence market share in 2023. This is attributed to the rise in penetration of advanced digital technologies across North America. Biopharmaceutical companies in this region are increasingly adopting artificial intelligence for various applications such as research, drug discovery, and clinical trials, which is significantly fueling the market growth.

The key players operating in the global artificial intelligence market include Amazon Web Services, Inc., Apple Inc., Google LLC, IBM Corporation, Intel Corporation, Microsoft Corporation, Nvidia, Oracle Corporation, SAP SE, Siemens, and OpenAI. These players have adopted various strategies to increase their market penetration and strengthen their position in the artificial intelligence industry. 

Top Impacting Factors

Increase in investments in artificial intelligence systems

Businesses and organizations across all industries are increasing their investment in artificial intelligence to create competitive advantage through improved customer insights, enhanced employee efficiency, and accelerated innovation. The potential of artificial intelligence technology to efficiently assess the acquired data and use to predict future steps in real time with the help of complex algorithms aids in productivity development; for instance, Netflix can recommend movies based on its users' prior watching experiences.

Moreover, artificial intelligence has transformed business management in the modern business environment by integrating workflow management tools and trend forecasting. This acts as the primary driver of the artificial intelligence market. In addition, increase in investment in artificial intelligence technology and machine learning notably contributes toward the market growth. For instance, in September 2023, Amazon invested $4 billion in Anthropic taking a minority stake in the artificial intelligence startup. The deal is part of a broader collaboration to develop so-called foundation models, which underpin the generative AI systems that have captured global attention.

Furthermore, many small start-ups and tech organizations have invested in the adoption of open-source artificial intelligence platforms to increase efficiency in their value chains, which fosters the growth of the global market. Moreover, an increase in availability of low-cost, high-quality artificial intelligence technology is expected to contribute to the expansion of AI Industry.

Rise in collaboration between industries and artificial intelligence & machine learning solution companies

Rise in collaboration between various industries and artificial intelligence & machine learning companies to integrate cutting-edge technology to digitize various critical processes of the companies and to provide new services to end users drives the growth of the global AI market. For instance, in September 2021, CaixaBank partnered with Revelock to develop a solution based on artificial intelligence to prevent fraud in digital banking channels.

The major purpose of this collaboration was to offer enhanced security to end users by providing biometrics technology for digital banking, which fosters the growth of the market. In addition, the solution continuously assesses users’ online interactions and compares them with risk patterns, providing enhanced security to all CaixaBank’s online banking users, which, in turn, propels the growth of the artificial intelligence market.

Furthermore, financial firms have witnessed that end users are increasingly demanding on-the-spot answers and guidance across digital channels, which, in turn, is driving the collaboration between financial firms and artificial intelligence companies. For instance, in August 2021, Synechron and Kasisto partnered to humanize conversational artificial intelligence customer engagement for the banking and financial services industry, which can engage with customers via human-like conversations across voice, text, and touch modalities; deliver hyper-personalized next best action suggestions; and guide users on their individual financial journey.

In addition, this collaboration will bring conversational artificial intelligence capabilities and next generation of cognitive customer engagement, allowing top tier organizations to deliver a best-in-class and humanized digital transformation experience to institutions across the banking and finance industry. Thus, the increase in the number of such collaborations drives the growth of artificial intelligence industry.  

Increase in customer satisfaction and adoption of reliable cloud applications

In the past few years, machines have surpassed humans at recognizing speech, images, and faces. Artificial intelligence is being deployed across various industry verticals to reduce costs, improve efficiency, and boost customer satisfaction by enhancing key areas of customer experience. Sooner or later, employees at call centers are expected to be replaced by artificial intelligence machines for responding to enquiries and to provide enhanced client services, which, in turns, drives the growth of the market.

Moreover, rapid developments in powerful and affordable cloud computing infrastructure are expected to have a strong impact on the growth potential of the global artificial intelligence market. Furthermore, cloud-based technologies are reliably improving the IT environment incorporating changes and modifying the current business structure. Cloud computing enables small and medium-sized businesses (SMBs) to organize and exchange pertinent data and information in real time, which acts as the key driving factor of artificial intelligence industry.

Market Trends and Landscape

Increase in partnerships to develop the AI market size and adoption of the advance technologies are some of the trends flourishing the growth of AI market. For instance, in September 2023, Reliance and Nvidia have formed a partnership to create AI language models and generative apps for millions of telecom users of the Indian company. Nvidia will assist Reliance in building AI infrastructure by providing access to its superchip and cloud services. Reliance aims to leverage Nvidia's AI infrastructure to develop AI applications and services.

Furthermore, the introduction of new and innovative products in the market by key players is expected to boost the growth of the AI market during the forecast period. For instance, in October 2021, Microsoft corporation introduced a program Microsoft AI Innovate for nurturing and scaling startups that are leveraging artificial intelligence (AI). This helps to support startups in India leveraging AI technologies, helping them scale operations, drive innovation, and build industry expertise.

The artificial intelligence market has witnessed significant growth in the past few years, and is expected to exhibit further notable growth, due to the outbreak of the COVID-19 pandemic. This is attributed to the surge in need of artificial intelligence among enterprises for improving their customers’ needs and to increase their revenue opportunity. In addition, use of artificial intelligence and machine learning technologies for managing growing volume of data generated from various devices in an organization drives the growth of the market. Furthermore, surge in investment in artificial intelligence by various private sectors such as healthcare and medical research to fight against the pandemic propels the growth of the market Thus, these factors overall had a positive impact on AI Industry.

Recent Collaborations in AI Market

In August 2023, HCLTech has announced a collaboration with Amazon Web Services (AWS) to push the adoption of generative Artificial Intelligence (GenAI) at the company and by enterprises globally. The collaboration aims to empower enterprises to leverage the power of AWS' advanced GenAI portfolio which includes Amazon CodeWhisperer, Amazon Bedrock, Amazon Titan, AWS Trainium and AWS Inferentia.

In September 2023, Amazon and Anthropic announced a strategic collaboration that will bring together their respective industry-leading technology and expertise in safer generative artificial intelligence (AI) to accelerate the development of Anthropic's future foundation models and make them widely accessible to AWS customers.

In August 2023, IBM expanded its collaboration with Microsoft to help joint clients accelerate the deployment of generative AI - and deliver a new offering that will provide clients with the expertise and technology they need to innovate their business processes and scale generative AI effectively.

Recent Product Launches in AI Market

In May 2021, IBM corporation introduced advances in artificial intelligence (AI), hybrid cloud, and quantum computing at the company. The innovation helps its clients and partners to accelerate their digital transformations, return to work smarter, and build strategic ecosystems that can drive better business outcomes.

In March 2023, Google launched Bard, an AI chatbot designed to compete with OpenAI's ChatGPT and Microsoft's chatbot in their Bing search engine.

In May 2021, Google LCC introduced Vertex AI, a managed machine learning (ML) platform that allows companies to accelerate the deployment and maintenance of artificial intelligence (AI) models. Vertex AI requires nearly 80% fewer lines of code to train a model versus competitive platforms1, enabling data scientists and ML engineers across all levels of expertise the ability to implement Machine Learning Operations (MLOps) to efficiently build and manage ML projects throughout the entire development lifecycle.

Key Benefits for Stakeholders

  • This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the artificial intelligence (AI) market analysis from 2022 to 2032 to identify the prevailing AI market share.
  • Market research is offered along with information related to key drivers, restraints, and opportunities.
  • Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.
  • In-depth analysis of the artificial intelligence market size segmentation assists to determine the prevailing artificial intelligence market analysis .
  • Major countries in each region are mapped according to their revenue contribution to the global market.
  • Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
  • The report includes the analysis of the regional as well as global artificial intelligence market trends, key players, market segments, application areas, and market growth strategies.

Artificial Intelligence (AI) Market Report Highlights

Aspects Details
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Market Size By 2033

USD 3636 billion

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Growth Rate

CAGR of 37.3%

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Forecast period

2023 - 2033

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Report Pages

681

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By Component
  • Hardware
  • Software
  • Service
    • Service
      • Implementation and Integration
      • Training and Support
      • Consulting Service
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By Technology
  • Machine Learning
  • Natural Language Processing
  • Computer Vision
  • Generative AI
    • Generative AI
      • Generative Adversarial Networks (GANs)
      • Transformer
      • Variational Autoencoder (VAE)
      • Diffusion Networks
      • Retrieval Augmented Generation
  • Deep Learning
  • Others
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By Deployment Mode
  • On-premise
  • Cloud
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By Enterprise Size
  • Large Enterprise
  • Small and Medium-sized Enterprise
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By Business Function
  • Sales and Marketing
  • Supply Chain Management
  • Human Resource Management
  • Finance and Accounting
  • Cybersecurity
  • Legal and Compliance
  • Operations
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By Type
  • Pretrained Models
  • Customizable AI
  • Edge AI
  • AI Marketplaces
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By Industry Vertical
  • IT and Telecommunication
  • Retail and E-commerce
  • BFSI
  • Healthcare
  • Manufacturing
  • Automotive
  • Agriculture
  • Education
  • Media and Entertainment
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By Region
  • North America  (U.S., Canada)
  • Europe  (UK, Germany, France, Italy, Spain, Russia, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, South Korea, Australia, Thailand, Indonesia, Pakistan, Viet Nam, Bangladesh, Philippines, Malaysia, Rest of Asia-Pacific)
  • LAMEA  (Brazil, Turkey, Mexico, Saudi Arabia, Argentina, Colombia, South Africa, Rest of LAMEA)
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Key Market Players

IBM Corporation, Microsoft Corporation, Google Inc., SAP SE, OpenAI, Intel Corporation., NVIDIA Corporation, Siemens, Amazon Web Services Inc., Apple Inc., Oracle Corporation

Analyst Review

Demand for artificial intelligence systems has been increasing in the past few years and is expected to continue this trend in the coming years as well, owing to increase in market competitiveness and rise in quality standards, which enable the development of artificial intelligence-based applications that automate business operations while maintaining (even raising) quality and efficiency in due time. Moreover, increasing application and accuracy of artificial intelligence has increased its demand in the government and public sector organizations that look forward to promoting automation. In addition, growing digitalization and internet penetration across the globe is expected to provide lucrative opportunities for the growth of the artificial intelligence market.

Key providers of the artificial intelligence market such as IBM Corporation, Microsoft Corporation, and Google LLC account for a significant share in the market. With growing hardware and software requirement for artificial intelligence, various companies are establishing partnerships to increase artificial intelligence capabilities. For instance, in October 2020, IBM Corporation announced partnership with ServiceNow to help companies reduce operational risk and lower costs by applying artificial intelligence to automate IT operations. The solution is engineered to help IBM and ServiceNow clients realize deeper, artificial intelligence-driven insights from their data, create a baseline of a typical IT environment, and take succinct recommended actions on outlying behavior to help prevent and fix IT issues at scale. Together, IBM and ServiceNow help companies free up valuable time and IT resources from maintenance activities, to focus on driving the transformation projects necessary to support the digital demands of their businesses.

In addition, with the increase in demand for artificial intelligence, various companies are expanding their current product portfolio with increasing diversification among customers. For instance, in August 2021, Siemens Healthineers AG, a subsidiary of German multinational Siemens AG announced the launch of the Atellica COVID-19 Severity Algorithm, an artificial intelligence-based tool that helps predict which patients with COVID-19 are at risk of progressing to severe medical outcomes.

Moreover, market players have expanded their business operations and customers by increasing their acquisition. For instance, in January 2022, Oracle Corporation announced the acquisition of Federos, an artificial intelligence and machine learning services provider. The acquisition extends Oracle Communications’ application portfolio by adding artificial intelligence-optimized assurance, analytics, and automation solutions to manage the availability and performance of critical networks and systems. This expands Oracle’s ability to deliver end-to-end network and service assurance, enabling communication service providers and enterprises to increase operational efficiency while significantly lowering costs and reducing customer attrition.

Author Name(s) : Shubham Vardam| Sourabh Ekre | Onkar Sumant
Frequently Asked Questions?

The artificial intelligence (AI) market is estimated to grow at a CAGR of 37.3% from 2024 to 2033.

The artificial intelligence (AI) market is projected to reach $3,636.03 billion by 2033.

Increase in investments in artificial intelligence systems, rise in collaboration between industries and artificial intelligence & machine learning solution companies, and increase in customer satisfaction and adoption of reliable cloud applications majorly contribute toward the growth of the market.

The key players profiled in the report include artificial intelligence (AI) market analysis includes top companies operating in the market such as Amazon Web Services, Inc., Apple Inc., Google LLC, IBM Corporation, Intel Corporation, Microsoft Corporation, Nvidia, Oracle Corporation, SAP SE, Siemens, and OpenAI.

The key growth strategies of artificial intelligence (AI) players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

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Artificial Intelligence (AI) Market

Global Opportunity Analysis and Industry Forecast, 2024-2033