The explainable AI market was valued at $6.2 Billion in 2023 and is estimated to reach $39.6 Billion by 2033, exhibiting a CAGR of 20.3% from 2024 to 2033. The market is experiencing rapid growth, driven by increasing demand for transparency and trust in AI decision-making across sectors such as healthcare, finance, and autonomous systems. Organizations are investing in XAI to comply with regulatory requirements and enhance AI model interpretability, fueling market expansion.
Market Introduction and Definition
Explainable artificial intelligence (XAI) is an artificial intelligence system designed to provide clear and understandable explanations of its decisions or outputs. It is used to describe an AI model, its expected impact, and potential biases and to help characterize model accuracy, fairness, transparency, and outcomes in AI-powered decision-making. In addition, the main types of software in explainable AI are standalone software, integrated software, automated reporting tools, and interactive model visualization. The explainable AI aims to address this limitation by providing insights into the inner workings of AI algorithms, enabling users to comprehend the reasoning behind AI-generated outputs.
Key Takeaways
The explainable AI industry study covers 20 countries. The research includes a segment analysis of each country in terms of value ($Million) for the projected period 2023-2032.
More than 1, 500 product literatures, industry releases, annual reports, and other such documents of major explainable AI industry participants along with authentic industry journals, trade associations' releases, and government websites have been reviewed for generating high-value industry insights.
The study integrated high-quality data, professional opinions and analysis, and critical independent perspectives. The research approach is intended to provide a balanced view of global markets and to assist stakeholders in making educated decisions in order to achieve their most ambitious growth objectives.
Key Market Dynamics
Advancements in AI technologies are driving the rapid growth of the explainable AI (XAI) market by enabling more sophisticated and accurate models that can provide clear and understandable insights into the decision-making processes. These technological advancements make AI systems more accessible and reliable across various sectors such as healthcare, finance, and autonomous driving. However, the development of XAI also faces significant restraints due to data privacy and security. As AI systems require vast amounts of data to function effectively, ensuring the privacy and security of this data becomes more critical. Furthermore, the ethical development of AI presents a significant opportunity for explainable AI (XAI) market as public and regulatory scrutiny of AI systems increases, the demand for ethical AI practices that promote fairness, accountability, and transparency grows future drives the market growth. This creates a favorable environment for the adoption of XAI solutions, which can address ethical concerns and build trust among users and stakeholders. By focusing on ethical AI development, the XAI market can expand its reach and impact, making AI technologies more acceptable and beneficial across diverse applications.
Patent Analysis for Explainable AI Market
According to World Intellectual Property Organization (WIPO) patent analysis from 2021 to 2023. Umnai Ltd. led with a substantial 25.0% share, indicating a strong focus on developing new technologies in explainable AI. SpIntellx, Inc. follows closely behind with an 18.8% share, indicating significant innovation in this space as well. Other notable players include Hyundai Mobis Co., Ltd., People Lens Inc., and Bank of America Corporation, each contributing with 6.3% shares. This distribution suggests a competitive landscape with multiple players investing in research and development for explainable AI solutions. Additionally, the involvement of research institutions like SRM Institute of Science and Technology and Korea University Research and Business Foundation, along with companies like Tata Consultancy Services Limited, indicates a collaborative effort between academia and industry in advancing the field of explainable AI.
Market Segmentation
The explainable AI market size is segmented into by component, deployment, application, end use and region. On the basis of component, the market is divided into solution and services. As per deployment, the market is segregated into cloud-based and on-premises. On the basis of application, the market is divided into fraud and anomaly detection, drug discovery & diagnostics, predictive maintenance, supply chain management, identity and access management and others. On the basis of end-use, the market is divided into healthcare, BFSI, aerospace & defense, retail and e-commerce, public sector & utilities, IT & telecommunication automotive. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Regional/Country Market Outlook
In North America, robust technological innovation and stringent regulatory standards in sectors such as healthcare and finance are driving the adoption of XAI. Europe is experiencing similar explainable AI market growth, propelled by strong data protection laws such as GDPR, which demand transparency and accountability in AI systems. In addition, the Asia-Pacific region, countries such as Japan, South Korea, and China is investing heavily in XAI to enhance their AI capabilities and address ethical considerations. Furthermore, the emerging market in LAMEA is gradually incorporating XAI as part of their broader digital transformation efforts, recognizing its potential to build trust and transparency in AI applications. This regional diversity highlights the global momentum towards integrating XAI, ensuring that AI systems are not only advanced but also transparent, fair, and accountable.
Industry Trends
In May 2023, the Biden-Harris Administration announced a new action that will further promote responsible American innovation in artificial intelligence (AI) and protect people’s rights and safety. In addition, these steps build on the Administration’s strong record of leadership to ensure technology improves the lives of the American people, and the federal government’s ongoing effort to advance a cohesive and comprehensive approach to AI-related risks and opportunities.
Competitive Landscape
The major players operating in the explainable AI market size include IBM Corporation, Microsoft Corporation, Amelia US LLC, Google LLC, Arthur.ai, Ditto.ai, Intel, AWS, NVIDIA, Mphasis and Alteryx.
Recent Key Strategies and Developments
In May 2023, IBM announced the launch of a new platform for organizations ‘IBM Watsonx’. The new platform released by IBM allows companies to accelerate operations with artificial intelligence solutions.
In May 2023, the Smart Nation and Digital Government Office (SNDGO) and Google Cloud announced the launch of the Artificial Intelligence Government Cloud Cluster (AGCC) , a comprehensive platform designed to accelerate AI adoption in Singapore’s public sector, advance local research efforts in applied AI, and support the growth of the local AI startup ecosystem.
Key Sources Referred
IBM
National Institute of Standards and Technology (NIST)
European Commission
U.S. Department of Commerce
NITI Aayog
German Federal Ministry of Education and Research (BMBF)
Key Benefits for Stakeholders
This report provides a quantitative analysis of the explainable AI market trends, segments, estimations, and dynamics of the explainable AI market analysis from 2024 to 2032 to identify the explainable AI 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 explainable AI market forecast assists to determine the prevailing market opportunities.
Major countries in each region are mapped according to their revenue contribution to the global explainable AI market Statistics.
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 explainable AI market trends, key players, market segments, application areas, and explainable AI market share strategies.
Explainable AI Market Report Highlights
| Aspects | Details |
 Market Size By 2033 | USD 39.6 Billion |
 Growth Rate | CAGR of 20.3% |
 Forecast period | 2024 - 2033 |
 Report Pages | 200 |
 By Component |
|
 By Deployment |
|
 By Application |
|
 By End-Use |
|
 By Region |
|
 Key Market Players | Amazon Web Services Inc., Amelia US LLC, NVIDIA Corporation, Ditto.ai, Google LLC, Arthur.ai, Microsoft Corporation, Intel Corporation, IBM Corporation, Alteryx, Inc., Mphasis Limited |
The global explainable AI market size is valued at $6.2 billion.
The drug discovery & diagnostics segment is expected to grow with the highest CAGR in the global explainable AI market.
North America is the largest regional market for explainable AI.
The explainable AI market is expected to reach $39.6 by 2033.
The major players operating in the explainable AI market include IBM Corporation, Microsoft Corporation, Amelia US LLC, Google LLC, Arthur.ai, Ditto.ai, Intel, AWS, NVIDIA, Mphasis and Alteryx.
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