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2024

Artificial Intelligence Of Things (Aiot) Market

Artificial Intelligence Of Things (Aiot) Market Size, Share, Competitive Landscape and Trend Analysis Report, by Component, by Deployment, by Industry Vertical, by Application, by End User : Global Opportunity Analysis and Industry Forecast, 2024-2032

IC : Software and Services

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Author's: Bias Dey| Akanksha Pandey | Onkar Sumant
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Artificial Intelligence Of Things (AIot) Market Research, 2032

The global artificial intelligence of things (AIoT) market was valued at $126.1 billion in 2023, and is projected to reach $1,319.4 billion by 2032, growing at a CAGR of 30.2% from 2024 to 2032.

The AIoT (Artificial Intelligence of Things) market represents the intersection of two transformative technologies: artificial intelligence (AI) and the Internet of Things (IoT). AIoT refers to the integration of AI capabilities into IoT systems and devices, enabling these interconnected objects to collect, analyze, and respond to data autonomously or semi-autonomously. This convergence enhances the capabilities of traditional IoT systems by adding intelligence, predictive analytics, and decision-making capabilities at various levels of the IoT architecture, from edge devices to cloud platforms.

At its core, the AIoT market encompasses a wide range of applications across industries, driven by the goal of improving efficiency, automation, and operational insights. Industries such as manufacturing, healthcare, transportation, agriculture, smart cities, and consumer electronics are among the primary adopters of AIoT solutions. In manufacturing, AIoT facilitates predictive maintenance of machinery, quality control, and supply chain optimization through real-time data analysis. In healthcare, AIoT enables remote patient monitoring, personalized medicine, and predictive diagnostics by leveraging data from wearable devices and medical sensors. In smart cities, AIoT applications include traffic management, waste management, energy efficiency, and public safety enhancements through interconnected sensors and AI-driven analytics.

 

Artificial Intelligence Of Things (Aiot) Market

Rise in proliferation of connected devices, advancements in AI algorithms and increased concern regarding security features and stability of software. Moreover, enhanced user experiences and demand for predictive maintenance are expected to provide lucrative opportunities for the growth of the market during the forecast period. On the contrary, data privacy and security concerns and high cost of implementation limit the growth of the artificial intelligence of things (AIoT) market.

As businesses and organizations increasingly recognize the transformative potential of AIoT, investments in research and development, partnerships, and strategic acquisitions are accelerating growth and innovation within the market. Challenges such as data privacy concerns, interoperability issues, and cybersecurity risks remain critical considerations for stakeholders in deploying AIoT solutions effectively. However, the promise of AIoT lies in its ability to drive operational efficiencies, enhance decision-making processes, and create new business models that capitalize on the vast amounts of data generated by IoT devices. As such, the AIoT market represents a dynamic and evolving landscape poised to reshape industries and everyday experiences through intelligent, connected systems.    

Key Takeaways:

  • By component, the basic hardware segment accounted for the largest AIoT market share in 2023.
  • By deployment mode, the cloud segment accounted for the largest AIoT market share in 2023.
  • By industry vertical, manufacturing segment accounted for the largest AIoT market share in 2023.
  • By application, video surveillance segment accounted for the largest AIoT market share in 2023.
  • Region wise, North America generated the highest revenue in 2023.

The report focuses on growth prospects, restraints, and trends of AIoT market analysis. The study provides Porter’s five forces analysis to understand the impact of various 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 AIoT market.

Segment review

The AIoT market is segmented into component, deployment mode, end user, industry vertical, application, and region. By component, it is segmented into Hardware, software and services. On the basis of deployment mode, the market is bifurcated into on-premise and cloud. By application, the market is divided into video surveillance, inventory management, predictive management, supply chain management, and others. On the basis of industry vertical, the market is divided into retail, agriculture, logistics, BFSI, automotive and transportation, healthcare, manufacturing and others. By end user, the market is divided into B2C, B2B and B2G. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.  

Artificial Intelligence Of Things (Aiot) Market by Component

     

Based on the components, the hardware segment dominated the market share in 2023 and, is expected to maintain its dominance during the AIoT market forecast period, as AIOT relies heavily on physical components like sensors, processors, and devices to gather data and perform tasks. These hardware components are the backbone of AIoT systems, enabling them to sense, process, and act upon information in the real world, which is further expected to propel the segment growth in the global market. However, the software segment is expected to exhibit the highest growth during the forecast period, owing to the advancements in AI algorithms, machine learning techniques, and data analytics capabilities are driving innovation in AIoT software, enabling enhanced decision-making, predictive insights, and automation functionalities. This growing emphasis on software development is fueled by the evolving needs of businesses and consumers for sophisticated AIoT applications and further boost the growth of artificial intelligence of things market size.

Artificial Intelligence Of Things (Aiot) Market by Region

Region-wise, North America attained the highest growth in 2023. This is attributed to the region's robust infrastructure, technological innovation, and substantial investments in AIoT initiatives. North America hosts a thriving ecosystem of AIoT companies, research institutions, and technology hubs, fostering a conducive environment for the development and adoption of AIoT solutions across diverse industries.  However, Asia-Pacific is expected to exhibit the highest growth during the forecast period, owing to increase in digital transformation initiatives. With a growing emphasis on Industry 4.0, smart cities, and connected infrastructure projects, countries in the Asia-Pacific region are witnessing a surge in demand for AIoT solutions to address diverse challenges and capitalize on emerging opportunities, which further contribute to the growth of the global AIoT market size.  

Competition Analysis

Competitive analysis and profiles of the major players in the AIoT industry are Microsoft Corporation, SAP SE, Alphabet (Google Inc.), Bosch.IO GmbH, Williot, Hitachi, Ltd., International Business Machines Corporation, Siemens AG, GE Vernova, Terminus Group, Falkonry Inc and Amazon Web Services, Inc. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships, which help to drive the growth of AIoT market globally.

Recent Developments in the AIoT Industry

In January 2024, Vodafone collaborated with Microsoft to advance generative AI, digital enterprise, and Cloud services for over 300 million businesses and consumers across Vodafone's European and African markets. The collaboration between Vodafone and Microsoft combines their respective strengths in AI, IoT, and financial services to create innovative solutions for businesses across Europe and Africa.

In January 2024, Telenor Connexion, the specialized internet of things (IoT) company within the Telenor Group, achieved the AWS IoT Competency Validation, which recognizes IoT partners with deep domain expertise and edge-to-cloud solutions built on Amazon Web Services (AWS). Telenor Group is one of the world's major mobile operators, operating more than 17 million connections across some 200 countries. To support the seamless integration and deployment of IoT solutions, AWS established the AWS IoT Competency Program to help customers identify consulting and technology Partners within the AWS Partner Network (APN) with deep industry experience and expertise.

In April 2021, ASUS announced a new collaboration between the ASUS IoT business unit and Microsoft Azure Edge Devices, platforms, & services on the launch of Azure Percept DK — a comprehensive development kit for creating AIoT edge solutions with Microsoft Azure Percept. The partnership aims to develop AI solutions for edge devices. Specifically, the new ASUS Azure Percept DK provides a comprehensive edge AI platform for users, enabling the creation of edge AIoT solutions.   

Top Impacting Factors

Proliferation of connected devices

The proliferation of connected devices is a fundamental driver of the artificial intelligence of things market, catalyzing its rapid growth and evolution. This phenomenon refers to the widespread deployment and integration of IoT devices across various sectors, from consumer electronics to industrial machinery. Connected devices, embedded with sensors and communication technologies, generate vast amounts of data. This data, encompassing everything from environmental conditions to user behaviors, is invaluable for deriving actionable insights. However, the sheer volume and complexity of this data necessitate advanced processing and analysis, a role perfectly suited for AI.

By leveraging AI technologies, organizations transform raw data into meaningful insights, facilitating informed decision-making and predictive analytics. The integration of AI with IoT devices enhances their functionality, enabling smarter, more autonomous operations. For instance, in industrial settings, AIoT systems predict equipment failures before they occur, schedule maintenance proactively, and optimize production processes in real-time. In smart homes, AI algorithms learn residents' habits and adjust climate control systems, lighting, and security features, accordingly, enhancing convenience and energy efficiency. As the number of connected devices continues to grow, so does the network's scalability and interconnectivity. This interconnected ecosystem allows for seamless communication and data exchange between devices, further amplifying the potential of AIoT applications. Enhanced connectivity ensures that AIoT systems operate more cohesively, providing comprehensive solutions that span multiple devices and platforms. The surge in connected devices is not only driving technological advancements but also expanding artificial intelligence of things market opportunities.

Companies are increasingly investing in AIoT solutions to stay competitive, improve operational efficiencies, and offer innovative products and services. This investment fuels continuous development, pushing the boundaries of what AIoT can achieve and solidifying its role as a transformative factor in the digital landscape.

Advancements in AI Algorithms

Advancements in AI algorithms are a pivotal driver of the AIoT market, significantly enhancing the capabilities and efficiency of IoT systems. These advancements encompass improvements in machine learning (ML), deep learning, neural networks, and natural language processing (NLP), among other AI technologies. Moreover, modern AI algorithms are increasingly sophisticated, allowing for more accurate and efficient processing of the vast amounts of data generated by IoT devices.

These algorithms identify patterns, predict trends, and generate insights with unprecedented precision. This capability is crucial for applications such as predictive maintenance in industrial settings, where AI analyze data from sensors to predict equipment failures and optimize maintenance schedules, thereby reducing downtime and operational costs. Improved AI algorithms facilitate greater customization and personalization of IoT applications. In smart homes, AI learns user preferences and adjusts settings for lighting, heating, and security systems accordingly. Similarly, in retail, AI analyzes customer behavior to offer personalized shopping experiences, thus boosting customer satisfaction and sales. Advancements in AI have also led to more scalable and flexible solutions. Modern AI frameworks support seamless integration with diverse IoT devices and platforms, enabling scalable AIoT ecosystems. This scalability is vital as the number of connected devices grows, ensuring that AIoT systems handle increasing volumes of data and more complex tasks.

Key Benefits For Stakeholders

  • This report provides a quantitative analysis of the AIoT market size, segments, current trends, estimations, and dynamics of the artificial intelligence of things (AIoT) market analysis from 2023 to 2032 to identify the prevailing artificial intelligence of things (AIoT) market opportunities.
  • The 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 make profit-oriented business decisions and strengthen their supplier-buyer network.
  • In-depth analysis of the artificial intelligence of things (AIoT) market segmentation assists to determine the prevailing market opportunities.
  • 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 AIoT market trends, key players, market segments, application areas, and AIoT market growth strategies.

Artificial Intelligence Of Things (Aiot) Market Report Highlights

Aspects Details
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Market Size By 2032

USD 1319.4 billion

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Growth Rate

CAGR of 30.2%

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Forecast period

2023 - 2032

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Report Pages

501

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By End User
  • B2B
  • B2G
  • B2C
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By Component
  • Hardware
  • Software
  • Services
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By Deployment
  • On-Premise
  • Cloud
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By Industry Vertical
  • Retail
  • Agriculture
  • Logistics
  • BFSI
  • Automotive and Transport
  • Healthcare
  • Manufacturing
  • Others
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By Application
  • Video Surveillance
  • Inventory Management
  • Predictive Maintenance
  • Supply Chain Management
  • Others
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By Region
  • North America  (U.S., Canada)
  • Europe  (France, Germany, Italy, Spain, UK, Russia, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, South Korea, Australia, Southeast Asia, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Turkey, Middle East, Africa)
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Key Market Players

Amazon Web Services, Inc., Terminus Group, GE Vernova, Hitachi, Ltd., Falkonry Inc, Bosch.IO GmbH, SAP SE, Microsoft Corporation, International Business Machines Corporation, Williot, Alphabet (Google Inc.), Siemens AG

Analyst Review

The AIoT (Artificial Intelligence of Things) market is a rapidly expanding industry, which combines artificial intelligence (AI) and the Internet of Things (IoT). This convergence is driving significant advancements in various industries, including manufacturing, healthcare, transportation, and smart cities. The global AIoT market is expected to experience substantial growth in the coming years, propelled by the increasing adoption of AI and IoT technologies across sectors. Key drivers of the AIoT market include the proliferation of connected devices, advancements in AI algorithms, and the growing need for real-time data analysis and decision-making. The integration of AI capabilities into IoT devices enables them to learn from data, adapt to changing environments, and make autonomous decisions, leading to enhanced efficiency and productivity. In the manufacturing sector, AIoT technologies are revolutionizing processes through predictive maintenance, quality control, and supply chain optimization. In healthcare, AIoT solutions are improving patient care through remote monitoring, predictive analytics, and personalized treatment plans. Transportation is benefiting from AIoT applications such as autonomous vehicles, traffic management systems, and fleet optimization tools. Smart cities are leveraging AIoT to enhance public services, improve energy efficiency, and ensure sustainable urban development. However, the AIoT market also faces challenges, including data security and privacy concerns, interoperability issues among diverse devices and platforms, and the need for skilled professionals to develop and deploy AIoT solutions. Overcoming these challenges will be crucial for the continued growth and success of the AIoT market.

As companies across industries recognize the potential of AIoT technologies to drive innovation and competitive advantage, investment in research and development, partnerships, and talent acquisition is expected to increase. The AIoT market presents immense opportunities for businesses to transform operations, deliver personalized experiences, and unlock new revenue streams through data-driven insights and automation. Embracing AIoT technologies will be essential for organizations seeking to stay ahead in an increasingly connected and intelligent world.

For instance, in July 2021, Artificial Intelligence of Things (AIoT) solutions firm Envision Digital International partnered with Microsoft to implement net-zero technology solutions. The partnership will enable Envision Digital to accelerate its digital transformation and business growth by adopting cloud solutions. This will allow the company to help organizations around the world meet energy efficiency goals while progressing on their digital transformation journeys.

Author Name(s) : Bias Dey| Akanksha Pandey | Onkar Sumant
Frequently Asked Questions?

The global AIoT market was valued at $126.1 billion in 2023, and is projected to reach at $1,319.4 billion by 2032, growing at a CAGR of 30.2% from 2024 to 2032.

Proliferation of connected devices and advancements in AI algorithms are the upcoming trends of artificial intelligence of things (AIoT) market in the world.

Demand for Predictive Maintenance is the leading application of artificial intelligence of things (AIoT) market

North America is the largest regional market for artificial intelligence of things (AIoT) market.

Microsoft Corporation, SAP SE, Alphabet (Google Inc.), Bosch.IO GmbH, Williot, Hitachi, Ltd., International Business Machines Corporation, Siemens AG, GE Vernova, Terminus Group, Falkonry Inc and Amazon Web Services, Inc. are the top companies to hold the market share in artificial intelligence of things (AIoT).

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Artificial Intelligence Of Things (Aiot) Market

Global Opportunity Analysis and Industry Forecast, 2024-2032