Artificial Intelligence Market Size, Share, Growth & Industry Analysis, By Solution (Hardware, Software, Services), By Technology (Machine Learning, Natural Language Processing, Deep Learning, Others), By Company Size (Small, Medium, Large Enterprises), By End-Use and Regional Analysis, 2024-2031

Artificial Intelligence Market Size

The global Artificial Intelligence Market size was valued at USD 212.56 billion in 2023 and is projected to grow from USD 277.41 billion in 2024 to USD 2280.78 billion by 2031, exhibiting a CAGR of 35.12% during the forecast period.

The rapid growth of the market is attributed to ongoing advancements in deep neural networks (DNN), the exponential growth of big data, the rise of cloud computing platforms, and increased adoption of AI across industries. Additionally, significant investments from governments, venture capitalists, and other investors are supporting this growth.

In the scope of work, the report includes products offered by companies such as Apple Inc., Microsoft, NVIDIA Corporation, Alphabet, Open AI, Tesla, Adobe, IBM, Amazon Web Services, Meta, and others.

The artificial intelligence market presents numerous opportunities across various sectors, driven by rapid technological advancements and growing demand for AI solutions. Companies are making substantial investments in AI infrastructure and developing skilled workforces to advance research and development.

AI is being increasingly utilized across industries to automate tasks, analyze large datasets for insights, and deliver personalized customer experiences, thereby bolstering market growth.

• In January 2025, Microsoft announced plans to expand its cloud and artificial intelligence (AI) infrastructure in India through a USD 3 billion investment over the next two years. This investment will be complemented by a substantial human capital development initiative, with the company pledging to train 10 million people in AI skills by 2030 under the ADVANTA(I)GE India program

Artificial intelligence (AI) refers to the simulation of human intelligence in machines, enabling them to perform tasks such as learning, reasoning, and self-correction. Key technologies in AI include deep learning, machine learning, natural language processing, and computer vision.

AI is rapidly transforming industries such as healthcare, finance, transportation, and entertainment by automating tasks, improving efficiency, and fostering innovation.

Analyst’s Review

The artificial intelligence (AI) market is experiencing rapid growth, mainly fueled by the integration of AI tools into established businesses and the rise of AI startups offering specialized solutions. To effectively capitalize on this demand, companies are investing in advanced technologies and developing a skilled workforce to accelerate innovation and expand market reach.

For instance, e-commerce companies are adopting natural language processing (NLP) to improve human-computer interactions, such as through chatbots and virtual assistants, enhancing customer service.

Furthermore, the artificial intelligence market has witnessed a rise in strategic alliances and collaborations among established players, AI startups, and research institutions to accelerate innovation and enhance operational efficiency. Moreover, companies are emphasizing ethical considerations and data protection in response to evolving regulatory landscapes and legislative actions.

• For instance, in November 2024, IBM became the first company to align its internal data standards with the cross-industry Data Provenance Standards set by the Data & Trust Alliance. Founded in 2020, the alliance consists of CEOs from 15 different industries, including BFSI, healthcare, software, IT and others.

Artificial Intelligence Market Growth Factors

The exponential growth of the global artificial intelligence market is largely attributed to technological advancements. Key areas such as generative AI, machine learning, and facial recognition technologies have witnessed substantial progress.

This is due to continuous innovation in machine learning (ML), deep learning (DL), natural language processing (NLP), computer vision (CV) algorithms and others. Numerous companies and startups are leveraging NLP to develop generative AI systems, which are growing popularity among students and professionals.

• For instance, Open AI’s Chat GPT, a widely used chatbot, employs Reinforcement Learning from Human Feedback (RLHF) to process and analyze data, generating content such as articles, essays, code, social media posts and others. RLHF is a machine learning technique that utilizes human feedback to improve AI model performance.

Furthermore, cloud-based storage has improved access to structured, unstructured, and historical data, leading to advancements in AI model training and innovation. AI models rely on large volumes of historical data to identify patterns and make accurate predictions. This enhanced data accessibility is contributing significantly to the growth of the artificial intelligence market.

Ethical concerns and data quality issues are presenting significant challenges to the expansion of the market. The effectiveness and impartiality of AI systems rely on the data used for training. If these data sets reflect existing societal biases related to gender, race and others, then the AI's algorithmic outputs may reinforce these biases.

To address these challenges, AI companies are actively developing ethical guidelines and implementing bias detection models to ensure the quality and accuracy of training data, thereby mitigating these risks and fostering responsible AI development.

Artificial Intelligence Industry Trends

The increasing demand for AI-powered solutions across various industries, including BFSI, healthcare, IT and others, has spurred the growth of the artificial intelligence market. The availability of big data and open-source technologies has enabled developers and entrepreneurs to develop AI applications.

This has attracted substantial investments from venture capitalists, governments, and corporations, thereby fueling market expansion and fostering the emergence of new AI companies.

• For instance, Bright Machines, a U.S.-based software and robotics company specializing in AI hardware infrastructure, secured USD 126 million in June 2024 from investment funds managed by Blackrock. The company is committed to offering full-stack automation solutions for manufacturing.

Generative AI models are rapidly advancing, mainly due to their applications in content creation, customer service, and software development. There is a growing focus on developing specialized models tailored to specific industries, such as medical diagnosis or drug discovery.

AI-powered tools are capable of analyzing medical images, detecting anomalies, and assisting in the diagnosis of diseases such as cancer and Alzheimer's.

• In January 2024, researchers at Penn Medicine developed an AI tool, iStar (Inferring Super-Resolution Tissue Architecture), designed to enhance cancer detection. The tool enables detailed analysis of individual cells and offers a comprehensive overview of gene activity.

Technological advancements have led to the widespread use of artificial intelligence in the financial sector for applications such as high-speed trade execution, fraud detection and prevention, and investment risk assessment. Major banks are deploying AI models to analyze financial data and create sophisticated valuation models, facilitating informed investment decisions.

Segmentation Analysis

The global market has been segmented based on solution, technology, company size, end-use, and geography.

By Solution

Based on the solution type, the artificial intelligence market has been categorized broadly into hardware, software, and services. The software segment accounted for the largest revenue share of 48.51% in 2023 due to its innovation, scalability and flexibility. This segment encompasses tools and platforms that support the development, deployment, and management of AI applications.

Developers use machine learning frameworks (TensorFlow, PyTorch, scikit-learn), NLP platforms, and CV libraries to create solutions for specific business needs such as customer relationship management (CRM), fraud detection, and supply chain optimization.

By Technology

Based on the technology, the market has been broadly categorized into machine learning, natural language processing, and others. The deep learning segment is anticipated to grow at a staggering CAGR of 36.76% through the forecast period. Deep learning, inspired by the human brain, utilizes artificial neural networks with multiple layers to learn from data.

This technology underpins a wide range of Generative AI models, including chatbots and virtual assistants, contributing significantly to the growth of the segment.

• In June 2024, Apple Inc. introduced Apple Intelligence system for iPhone, iPad, and Mac devices. Built on machine learning, natural language processing, and on-device processing. Apple intelligence is designed to understand and generate language and images, as well as prioritize and summarize tasks.

By Company Size

Based on the company size, the market is broadly categorized into small, medium, and large enterprises. Large enterprises accounted for a significant share of 56.71% in 2023, owing to their substantial resources, advanced IT infrastructure, and established processes.

Large enterprises such as Apple, IBM, and NVIDIA leverage their financial strength to gain a competitive edge in the AI market. This enables them to invest significantly in AI research and development, acquire cutting-edge AI technologies, attract top talent, and build robust AI infrastructure.

Furthermore, their financial capacity to allows them to acquire smaller companies, integrating their technologies and fostering innovation.

• For instance, in April 2024, IBM acquired HashiCorp, Inc., a software company specializing in cloud infrastructure management, for USD 6.4 billion. The acquisition aims to strengthen IBM’s hybrid cloud platform by integrating HashiCorp's automation tools to address the complexities of AI-driven solutions.

By End Use

Based on the application, the market has been segmented into healthcare, BFSI, automotive and transportation, retail, and others. The healthcare segment dominated the market in 2023, with a share of 35.22% and a revenue of USD 74.87 billion. Artificial intelligence (AI) is revolutionizing the healthcare industry by facilitating accurate diagnosis, streamlining operations, and enhancing patient care.

AI systems automate administrative tasks, including scheduling, billing, and claims processing, allowing healthcare professionals to dedicate a greater proportion of their time to patient care.

Furthermore, Medical hospitals and centers are widely utilizing AI-powered tools to accurately predict the early stages of diseases, such as breast cancer and cardiovascular diseases, thereby enabling early intervention and the timely initiation of treatment.

• For instance, Apollo Hospital, an Indian healthcare group launched the Apollo AI-powered Cardiovascular Disease Risk Tool. This tool aims to predict the risk of cardiovascular diseases and contribute to the World Health Organization's goal of reducing premature mortality from non-communicable diseases, including CVDs, by 25% by 2025

Artificial Intelligence Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

North America artificial intelligence market is expected to dominate the market, generating a revenue of USD 103.79 billion in 2024. North America has a well-established history of technological leadership, particularly in computer science and software development, fostering a conducive environment for AI research.

This has attracted top talent and fueled significant advancements in AI technologies. Major global companies such as Google, Microsoft, and Amazon are making substantial investments in AI research, development, and deployment. Furthermore, venture capital firms, corporations, and government agencies are actively funding AI startups and research initiatives, thereby fueling regional market growth.

• In December 2024, Elon Musk’s AI startup, xAI, raised USD 6 billion. Key strategic investors included A16Z, Black rock, and Fidelity Management & Research Company, among others.

The Asia-Pacific artificial intelligence market has emerged as the fastest-growing region in 2023, generating revenue of USD 43.81 billion. The region is projected to exhibit a robust CAGR of 36.78% from 2024 to 2031, largely due to rapid economic development, increasing digitalization, and government policies supporting AI companies.

Countries such as Singapore, China and others are investing heavily in AI startups and promoting data-sharing initiatives to accelerate the penetration of AI across different sectors.  

• In October 2023, the Chinese government launched the National Data Administration to support the development of data infrastructure, resource sharing, and related initiatives. This aligns with China’s ‘Next Generation Artificial Intelligence Development Plan 2017.

Competitive Landscape

The global artificial intelligence Market report will provide valuable insights with a specialized emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers and acquisitions, product innovations, and joint ventures, to expand their product portfolio and increase their market shares across different regions.

Companies are implementing impactful strategic initiatives, such as expansion of services, investments in research and development (R&D), establishment of new service delivery centers, and optimization of their service delivery processes, which are likely to create new opportunities for market growth.

List of Key Companies in Artificial Intelligence Market

• Apple Inc.
• Microsoft
• NVIDA Corporation
• Alphabet
• OpenAI
• Tesla
• Adobe
• IBM
• Amazon Web Services, Inc.
• Meta Platforms Inc.

Key Industry Developments

• July 2024 (Acquisition): IBM acquired StreamSets and webMethods to expand its software portfolio. StreamSet aims to streamline data pipelines and add cloud-based data ingestion capabilities into IBM’s AI and data platform.
• April 2024 (Acquisition): NVIDA acquired Run:ai, a Kubernetes based software provider to leverage its services in deploying large language model for NVIDA products such as NVIDA HGX, DGX and DGX Cloud.
• March 2024 (Partnership): Microsoft partnered with Stanford Medicine to deploy Nuance Dragon Ambient eXperience Copilot (DAX Copilot). Through this partnership Stanford Medicines aims to automate clinical documentation, improve efficiency and enhance patient-focus care.

The global artificial intelligence market has been segmented as:

By Solution

• Hardware
  • GPUs (Graphics Processing Units)
  • TPUs (Tensor Processing Units)
  • AI Chips
  • Specialized Hardware Accelerators
• Software
  • AI Platforms & Frameworks (TensorFlow, PyTorch, scikit-learn)
  • AI Development Tools
  • AI Applications & Solutions
• Services
  • AI Consulting
  • AI Implementation
  • AI Training & Support

By Technology

• Machine Learning
• Natural Language Processing
• Deep Learning
• Others

By Company

• Small and Medium-sized Enterprise
• Large Enterprise

By End-Use

• Healthcare
• BFSI
• Automotive & Transportation
• Retail
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • UK
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America