AI in IoT Market Size, Share, and Trends 2024 to 2034

AI in IoT Market Size and Forecast

The global AI in IoT market size was USD 82.24 billion in 2023, calculated at USD 87.51 billion in 2024 and is expected to reach around USD 153.08 billion by 2033, expanding at a CAGR of 6.41% from 2024 to 2033. Factors such as growth in digitalization and an increase in the adoption of advanced technologies positively impacted the growth of the AI in IoT market.

AI in IoT Market Key Takeaways

• The North America AI in IoT market size reached USD 27.14 billion in 2023 and is expected to attain around USD 51.28 billion by 2033, poised to grow at a CAGR of 6.56% between 2024 and 2033.
• North America dominated the global AI in IoT market in 2023.
• Asia Pacific is anticipated to witness the fastest growth over the studied period.
• By component, the software segment dominated the global market in 2023.
• By component, the platform segment is expected to grow at a significant rate in the market during the projected period.
• By end-user, in 2023, the manufacturing segment led the market in 2023.
• By end-user, the banking, financial services, & insurance segment is expected to grow at a significant rate during the forecast period.

U.S. AI in IoT Market Size and Growth 2024 to 2033

The U.S. AI in IoT market size was exhibited at USD 19 billion in 2023 and is projected to be worth around USD 36.15 billion by 2033, poised to grow at a CAGR of 6.64% from 2024 to 2033.

North America dominated the global AI in IoT market in 2023. The growing investment in advanced technologies, including cloud-based services, AI, machine learning, business analytics solutions, and IoT, aims to enhance business operations and customer experience by driving the growth of the market.

The United States is poised to dominate the AI in IoT market in North America due to substantial investments, AI innovations, and advanced data collection technologies. Increased government spending on IoT and AI, along with the growing presence of AI in IoT vendors, is expected to propel market growth during the forecast period. Furthermore, the demand for 5G-enabled IoT connections is projected to increase.

• In June 2024, Tata Consultancy Services (TCS), a global leader in IT services, consulting, and business solutions, launched the Bringing Life to ThingsTM Lab in Cincinnati, Ohio. (US). The lab is designed to support the rapid prototyping, experimentation, and large-scale implementation of AI, GenAI, and IoT engineering solutions, enabling TCS to assist clients in bringing innovative solutions to life faster and more efficiently.

Asia Pacific is anticipated to witness the fastest growth in the AI in IoT market over the studied period. The increased penetration of digitalization and higher adoption of advanced technology are anticipated to offer significant growth opportunities for the market in this region. Furthermore, as a major contributor to the global economy, China's economic landscape is evolving rapidly due to rising labor costs and the unsustainable traditional migrant worker model. These factors have driven the economy to integrate automation into its industrial processes.

Market Overview

AI has emerged as a powerful technology capable of replicating human intellectual functions. Similarly, IoT refers to a network of interconnected devices with unique IDs that communicate data across a network without human interaction. The integration of AI in IoT systems has enabled businesses to develop sophisticated machines that mimic human behavior and assist in decision-making with minimal human intervention.

The AI in IoT market is growing rapidly due to the increasing fusion of AI technologies with IoT systems. This combination allows smart devices and networks to collect, analyze, and act on vast amounts of data in real-time, improving automation, efficiency, and decision-making capabilities.

AI in IoT Market Growth Factors

• The applications of the AI in IoT markets are increasing in various industries, such as healthcare and agriculture.
• Growing technological advancements are expected to further fuel the growth of the AI in IoT market.
• The AI in IoT market can provide improved convenience and a better user experience for consumers, which can have a positive impact on the market.
• Rising utilization of AI to improve data management and analytics can propel market growth shortly.

AI in IoT Market Scope

AI in IoT Market Dynamics

Driver

Rising big data volume

The expansion of mobile traffic, cloud computing, and the adoption of the AI in IoT market has significantly increased the volume and complexity of data and fueled the growth of big data. Big data analytics provide valuable insights and actionable information from large datasets. Organizations can utilize predictive analytics for risk assessment, operations, marketing, and fraud detection. Therefore, data and analytics are becoming indispensable components for enterprises.

• In March 2024, The IoT Community, the world's first-to-market, one of the largest, and longest-standing independent IoT Communities comprising 49,000+ IoT practitioner members, announces the launch of GenAIoT, a new industry solution category that intersects Generative Artificial Intelligence (Gen AI), with the Artificial Internet of Things (IoT) to operationalize Industrial and Enterprise Internet of Things (IoT).

Restraint

Cybersecurity issues

The proliferation of the AI in IoT market products and services expands the network's surface area, increasing the number of potential attack vectors. An IoT could exploit a single connected, unprotected device to launch an active attack on a network. Such attacks on critical infrastructure in industrial settings could result in significant losses and can hinder market growth. Furthermore, the shortage of skilled professionals in AI infrastructure and concerns regarding data privacy and security are anticipated to impede market expansion.

Opportunity

Advancements in edge computing

A significant opportunity in the AI in IoT market is the advancement of edge computing technologies. Edge computing processes data closer to its source, such as IoT devices, minimizing latency, reducing transmission costs, and decreasing reliance on centralized cloud services. By embedding AI capabilities directly into edge devices, real-time data processing and decision-making become faster and more reliable, which enables more autonomous IoT operations.

• In April 2024, A British computer processor and software design company, Arm, accelerates Edge AI with Ethos-U NPU and IoT reference design is said to deliver a 4x performance uplift for high-performance edge AI applications such as factory automation and smart cameras through a new IoT reference design platform to accelerate the deployment of voice and vision systems.

Components Insights

The software segment dominated the global AI in IoT market in 2023. The segment is further divided into sub-segments: remote monitoring, security, data management, network bandwidth management, real-time streaming analytics, and edge solutions. Among these, data management holds a significant market share. IoT data management is commonly used to predict wear and tear on connected assets and infrastructure. Moreover, Continuous innovation in this software segment ensures its crucial role within the AI in the IoT ecosystem, promising sustained growth and expansion in the coming years.

The platform segment is expected to grow at a significant rate in the AI in IoT market during the projected period. This can be attributed to the technological advancements that enabled AI in IoT platforms, transforming industries worldwide, including BFSI, manufacturing, and healthcare. These platforms facilitate developers in connecting, managing, and integrating data from IoT devices into various applications and services. They also aim to reduce development time and costs for IoT solutions by providing standard components for enterprises to build upon. These factors have contributed to the growth of platforms in AI in IoT market.

• In April 2024, American semiconductor giant Qualcomm launches Wi-Fi solutions, AI-based IoT, and industrial platforms. Qualcomm recently acquired Foundries.io, an IoT software platform, to enhance open-source capabilities and accelerate product commercialization.

End-user Insights

The manufacturing segment led the AI in IoT market in 2023. The manufacturing sector has increasingly utilized AI-powered IoT solutions to boost operational efficiency, enhance product quality, and minimize downtime. Companies are integrating AI with IoT to develop ‘smart factories’ where machinery and equipment communicate, predict failures, and self-optimize operations using real-time data. This integration has streamlined production processes by significantly reducing operational costs and contributed to the segment’s major market share.

The banking, financial services, & insurance segment is expected to grow at a significant rate in the AI in IoT market during the forecast period. In the banking, financial services, & insurance (BFSI) sector, IoT-enabled connected banking solutions help banks better serve their customers by utilizing data from various smart devices. This information allows customers to make informed financial decisions. Additionally, banks can offer value-added services, financial assistance, and personalized products using readily available customer data.

• In November 2023, Payment's technology solutions provider Financial Software &Systems Pvt Ltd (FSS) launched the Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML)-enabled ATMs in India. ATM operators have long been struggling with thin margins while facing multiple challenges in managing an ATM site. This innovative technology can resolve this.

AI in IoT Market Companies

• Google LLC
• SAP SE
• PTC Inc.
• Salesforce, Inc.
• Hitachi Ltd.
• Softweb Solutions Inc.
• Amazon Web Services Inc.
• IBM Corporation
• SAS Institute Inc.
• Oracle Corporation
• Other Key Players

Recent Developments

• In March 2024, Accenture launched the Accenture LearnVantage service to assist clients with a comprehensive technology learning and training service and achieve greater business value with the help of AI-based IoT systems.
• In January 2024, Vodafone and Microsoft signed a ten-year strategic partnership to develop AI-based IoT and other digital services as Vodafone has tried to scale its new standalone IoT business with Microsoft.
•  In March 2023, Accenture announced its acquisition of Flutura, a provider of data science and IoT services. This strategic move aims to bolster Accenture’s industrial AI services under its Applied Intelligence brand.
• In April 2022, Synaptic launched its edge AI evaluation kit (EVK), which utilizes the capabilities of its Katana system-on-a-chip (SoC) by building a human recognition, sound, and motion detection system for improving biometrics and other AI applications at the edge of the networks. Within this technology, the company is addressing different problems, such as power consumption and size constraints for edge semiconductors.
• In April 2022, Gupshup acquired Active.Ai, a startup that provides conversational AI to fintech firms and banks in all-cash transactions. The acquisition may enable Gupshup to offer better customer experience solutions for the BFSI market.

Segments Covered in the Report

By Component

• Platform
• Services
• Software

By End-user

• Banking, Financial Services, & Insurance
• IT And Telecommunication
• Energy & Utilities
• Healthcare Sector
• Manufacturing Industry

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa