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A09364 | Pages: 289 | Charts: 87 | Tables: 135 |
The global cloud artificial intelligence market size was valued at USD 42.7 billion in 2022, and is projected to reach USD 887 billion by 2032, growing at a CAGR of 35.8% from 2023 to 2032.
Cloud artificial intelligence provides technology for every phase of the AI lifecycle, including developing features, models, and ai applications, running and maintaining them, and disseminating them inside the organization. AI platforms are a category of technologies that support all aspects of the AI lifecycle. In addition, the user can operate the cloud artificial intelligence solutions on their infrastructure of choice, either on-premises, private cloud, hybrid cloud, or public cloud. Users manage the infrastructure, scale, elasticity, reliability, and security of the environment.
Moreover, advanced cloud artificial intelligence solutions help organizations rapidly make, operate, and innovate with AI to solve business issues. Cloud artificial intelligence systems may assist enterprises in increasing productivity and efficiency while lowering expenses. Additionally, it can provide customers with greater ease and superior user experience. In addition, the increasing demand for seamless data accessibility in several businesses for handling vast amounts of data is another driver boosts the global cloud artificial intelligencemarket growth. Such enhanced factors are expected to provide lucrative opportunities for market growth during the forecast period.
Also, the growing trend of cognitive computing in organizations is one of the major factors driving the global market growth. Cognitive computing uses digital simulations of human mental processes to assess ambiguous circumstances and uncertainty. By combining this capability with AI and cloud computing, organizations may advance their operations. The major advancement in artificial intelligence (AI) is cloud computing, which has the potential to mimic human thought and improve decision-making in challenging circumstances. These numerous beneficial factors are expected to fuel the cloud artificial intelligence market trends.
Furthermore, increasing availability of cloud-based AI services, the growing usage of mobile devices are the factors driving the growth of global cloud artificial intelligence market. In addition, there is a surge in technological advancements, which in turn is expected to create numerous opportunities for the growth of the market. However, data privacy and security concerns and costs and budget constraints hamper the growth of the market. Furthermore, rise in integration of industry 4.0, which creates opportunities for cloud artificial intelligence solutions to optimize business operations.
The cloud artificial intelligence market is segmented into component, technology, industry vertical, and region. The report provides information on various components including solutions and service. In addition, it is categorized by different solution technology deep learning, ai and machine learning, natural language processing (NLP) and others. The details of the industry vertical namely BFSI, retail and e-commerce, healthcare, automotive & transportation, government and defense and others are also provided in the report. In addition, it analyzes the current market trends across different regions such as North America, Europe, Asia-Pacific, and LAMEA.
[COMPONENTGRAPH]
On the basis of component, the solution segment dominated the global cloud artificial intelligence market share in 2022 and is expected to maintain its dominance in the upcoming years, owing to advances in technologies enabling cloud artificial intelligence to transform several industries globally. However, the service segment is expected to witness the highest growth, as cloud artificial intelligence services help to reduce the time and costs associated with optimizing systems in the initial phase of deployment.
[REGIONGRAPH]
By region, North America dominated the cloud AI market share in 2022. This is due to the increase in investment in advanced technologies such as cloud-based services, AI, ML, business analytics solution and IoT to improve businesses and enhanced customer experience are anticipated to propel the growth of the cloud artificial intelligence market. However, Asia-Pacific is expected to exhibit the highest growth during the forecast period. This is attributed to the increase in penetration of digitalization and higher adoption of advanced technology are expected to provide lucrative growth opportunities for the market in this region.
The cloud AI market has witnessed significant growth in the past few years; due to the outbreak of the COVID-19 pandemic, the market witnessed a sudden increase in demand during the period. This was attributed to the fact that there was an increase in demand for healthcare services, as businesses were moving to capitalize on the increased automation and digitalization in the healthcare sector. Furthermore, the rise in the number of COVID-19 cases influenced governments and local authorities to enforce strict measures such as social distancing and self-isolation policies to the closing of physical shops and businesses. This was intended to help slow the spread of COVID-19 cases, which further caused a growing number of businesses to depend on digital technologies. Such trends accelerated the digital transformation of physical businesses during the period of the pandemic.
On the other hand, the economic uncertainties caused by the pandemic prompted organizations to seek cost-efficient solutions. Consequently, organizations could quickly scale up their business solutions deployments in the cloud to accommodate a large number of remote users without the need for significant infrastructure investments. According to Citrix statistics, in 2022, nearly 81% of IT leaders plan to increase their Desktop as a Service (DaaS) budget, with around 71% stating that DaaS is a critical component of business strategy to secure hybrid working. This will boost the demand for cloud AI industry.
The surge in the expansion of cloud-based AI services is a key driver for the cloud artificial intelligence market growth. Cloud computing provides underlying infrastructure and resources needed to deliver digitalization to end users, making it an essential enabler for businesses. This is attributed to the rise in number of countries committing to adopt cloud-based AI solutions. Furthermore, government policies have undertaken increased initiatives to embrace advanced technology, with plans for integrating a new digital solution.
For instance, in April 2023, the Japanese government raised $31.7 million (4.2 billion yen) in funding to develop shared quantum computing using a business-friendly cloud platform. The Japanese government intends to broaden quantum computing's accessibility so that businesses take advantage of its benefits. Therefore, cloud-based AI solutions gained wider traction among end users, taking advantage of cloud computing solutions in several industries.
Moreover, cloud-based AI solutions leverage the economies of scale provided by cloud computing. Organizations avoid the upfront costs associated with purchasing and maintaining on-premises hardware infrastructure. Consequently, regional governments and private and public businesses invest in cloud-based AI solutions. For instance, in April 2023, Ericsson partnered with the Government of Canada to raise $352.40 million (CAD 470 million) in funding to enhance the presence of the global leaders in advanced 5G, 6G, AI, cloud RAN, and core network technologies. Investments and advancements in cloud-based AI solutions will eventually contribute to the growth of the cloud artificial intelligence industry.
The increase in adoption of internet and mobile devices propels growth opportunities for the global cloud AI market. The rise in connectivity and proliferation of mobile devices have created a demand for advanced technological services, which in turn has surged the demand for cloud AI solutions among end users. As per the Pew Research Centre, in June 2021, smartphone ownership has increased by nearly 85% and home broadband subscriptions by nearly 77% among American adults since 2019. The growing adoption of the internet and mobile devices enables organizations to increase their cloud AI solution adoption. Cloud-based AI solutions allow users to access applications, and data securely from their own devices. This flexibility empowers organizations to support a business operation efficiently, improving productivity and work-life balance. These aforementioned factors significantly contribute to the huge potential for the growth and development of the cloud artificial intelligence market forecast.
In addition, the emerging trend of mobile devices has fueled the Bring Your Own Device (BYOD) shift. In corporate organizations, cloud AI solutions accommodate BYOD policies by enabling users to access virtual desktops and corporate resources securely from their personal devices. This reduces the need for organizations to provide company-owned devices, saving costs and increasing employee satisfaction. It increases the quality of life of the entire organization by responding to the comprehensive challenges of sustainability. Thus, the public and private sectors significantly use and implement cloud AI solutions.
For instance, in August 2023, VMware launched modern AI integrations to the Anywhere Workspace platform, part of the VMware Cross-Cloud services portfolio, that automatically optimize employee experience, drive new vulnerability management use cases, and simplify application lifecycle management. Therefore, such development strategies further pave the way for the deployment of cloud AI, which eventually drives market growth.
North America is expected to dominate the global market, owing to its status as one of the early adopters of the technology. The other factor is that most of the major players in the market are US-based. Cloud adoption among the regional end-user is also quite high. Hence, the investment in the studied market is too high. The region is also a key region dominating the global hybrid cloud and IaaS market.
Market players operating in the region are investing in innovating additional and unique features to their offerings, mainly to gain a competitive advantage and expand their customer target base. This is also expected to bring advancement in the regional and global markets. This factor expands the market scope further.
For instance, US-based SoundHound Inc. offers Houndify, an independent AI platform that enables developers and business owners to deploy a conversational interface anywhere to retain control of their brand and users while differentiating and innovating. The company recently added SoundHound music recognition technology to its Houndify voice AI platform. It also strategically partnered with Honda Motor Co. Ltd to accelerate development.
The high market consolidation has increased the competition among prominent players such as Microsoft, IBM, Google, Amazon, etc. The other players are actively expanding their product portfolio and geographical presence to capture a significant market share. The players operating in this market are investing hugely in artificial intelligence-related technologies and innovating their products, leading them to gain a sustainable competitive advantage. Due to this, there is always high competition between players to innovate and introduce new products.
In October 2022, at Oracle CloudWorld, Nvidia and Oracle announced an expanded, multiyear agreement to support clients' accelerated adoption of artificial intelligence (AI). Through the partnership, Nvidia's entire accelerated computing stack will be made available to Oracle Cloud Infrastructure (OCI), including GPUs, systems, and software.
November 2022 - ToGL Technology Sdn Bhd and Huawei Technologies (Malaysia) Sdn Bhd have formalized their collaboration to create cloud-based digital solutions in Malaysia. Modern cloud and artificial intelligence (AI) services and experiences are a part of the cooperation,
November 2022 - The AssetCare platform of the company will be combined with the strength and reach of Google Cloud as well as extra services like Google Earth Engine to launch three AI-powered sustainability applications, according to mCloud Technologies Corp., a leading provider of AI-powered asset management and Environmental, Social, and Governance solutions, which recently announced it had entered into a strategic partnership with Google Cloud. Source:
Key Market Segments
Key Market Players