Natural Language Processing (NLP) Market Expected to Reach $239.9 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Natural Language Processing (NLP) Market By Component (Solution, Service), By Deployment Mode (On-Premise, Cloud), By Enterprise Size (Large Enterprise, Small And Medium-Sized Enterprise), By Type (Statistical NLP, Rule-Based NLP, Hybrid NLP), By Industry Vertical (BFSI, IT And Telecom, Retail And E-Commerce, Healthcare, Education, Media And Entertainment, Others): Global Opportunity Analysis And Industry Forecast, 2023-2032." The natural language processing (NLP) market was valued at $16.2 billion in 2022, and is estimated to reach $239.9 billion by 2032, growing at a CAGR of 31.3% from 2023 to 2032.

Rise in penetration of internet is increasingly encouraging the creation and usage of innovative material, as well as the development of new technologies in PC and computing devices. These developments have resulted in the rapid development of natural language processing (NLP) services. Furthermore, the availability of advanced and robust IT infrastructure opens up numerous possibilities for natural language processing technology, which is expected to provide lucrative opportunities for market growth. However, the lack of skilled workforce and reliability issue can hamper market growth. For instance, in January 2022, Intel Corporation launched the “OpenVINO™ toolkit” to accelerate artificial intelligence (AI) across almost all imaginable use cases, including automatic speech recognition, emulation of human vision, NLP, recommendation systems, and among others. 

Furthermore, surge in increasing automation as a result of the integration of NLP with deep learning (DL) and machine learning (ML), drive the market growth. In addition, growing demand for smart devices, and increasing demand for advanced text analytics drive the growth of the market. However, complexities due to the usage of code-mixed language while implementing NLP solutions is expected to hamper the growth of the market. Furthermore, increase in automation as a result of the integration of NLP with deep learning and machine learning (ML) and rise in investments in the healthcare sector are expected to create lucrative market growth during the forecast period.

On the basis of type, , statistical NLP  segment dominated the NLP market in 2022 and is expected to maintain its dominance in the upcoming years owing to offers quantization, maximum likelihood & related rules and class conditional density function, such advantageous features. propels the market growth significantly. However, the rule-based NLP segment is expected to witness the highest growth, owing to offer advantages such as availability, cost efficient and enhance Speed..        

Region-wise, the natural language processing market size was dominated by North America in 2021 and is expected to retain its position during the forecast period, owing to increase in adoption and growth of advanced and latest technologies, such as cloud computing, AI, and ML, also increasing usage of NLP in BFSI, IT and government sector to improve businesses and customer experience aiding the growth of the natural language processing market. However, Asia Pacific is expected to witness significant growth during the forecast period, owing to adoption of process automation across all industry verticals to enhance customer engagement and increase effectiveness of IT infrastructure to which is expected to fuel the market growth in this region. 

The global COVID-19 pandemic has drastically affected businesses across the world. It has positively impacted the adoption of NLP based services due to lockdown imposed by governments of different countries. Post COVID-19 situation, companies are focusing on advanced technology such as artificial intelligence (AI), machine learning (ML), computing technology and analytics across industries such as BFSI, healthcare, IT and telecom and others to perform contactless operation. This factor also creates demand for AI-driven NLP technology, which drives the adoption of Natural language processing (NLP) market globally. Moreover, the pandemic has introduced considerable challenges for companies which are trying to execute key processes, report accurately with data spread over multiple locations, operate complex systems, and efficiently communicate with teammates; particularly where there don’t already have the infrastructure for such processes.      

Technological Trends

In the past year, major technological advances have influenced the development and use of natural language processing (NLP). NLP has undergone a revolution owing to deep learning techniques, particularly neural networks. In several NLP applications, including machine translation, sentiment analysis, and named entity recognition, neural networks have demonstrated exceptional success. The performance and accuracy of NLP systems have considerably increased with the inclusion of deep learning models, such as recurrent neural networks (RNNs) and transformer models like BERT (Bidirectional Encoder Representations from Transformers). These models can capture intricate linguistic patterns and contextual data, improving our knowledge and ability to produce human language. Additionally in NLP, transfer learning has emerged as a key trend. Pre-trained models can be adjusted for certain NLP tasks because they have been trained on big datasets, like Google's BERT and OpenAI's GPT (Generative Pre-trained Transformer). These models can be used for a variety of applications, saving time and computational resources while capturing general language knowledge. NLP has become more accessible due to transfer learning, which enables programmers to create effective applications even with little training data. 

Key Finding of the Study

• By component, the solution segment accounted for the largest natural language processing market share in 2022.
• On the basis of deployment, the on premises segment generated the highest revenue in 2022.
• On the basis of enterprise size, the large enterprise segment generated the highest revenue in 2022.
• On the basis of type, the statistical NLP segment generated the highest revenue in 2022.
• On the basis of industry vertical, the BFSI segment generated the highest revenue in 2022.
• Region-wise, North America generated the highest revenue in 2022.

The key players profiled in the natural language processing market analysis are as Apple Inc., Intel Corporation, SAS Institute Inc., SAP SE, Google LLC, Microsoft Corporation, Oracle Corporation, International Business Machines Corporation, Amazon Web Services, Inc., and Hewlett Packard Enterprise Development LP. These players have adopted various strategies to increase their market penetration and strengthen their position in the natural language processing industry.