Artificial Intelligence (AI) Market Size, Share, and Trends 2024 to 2034

Artificial Intelligence (AI) Market Size and Growth 2024 to 2034

The global artificial intelligence (AI) market size accounted for USD 638.23 billion in 2024 and is expected to reach around USD 3,680.47 billion by 2034, expanding at a CAGR of 19.1% from 2024 to 2034. The North America artificial intelligence (AI) market size reached USD 198.57 billion in 2023.

Artificial Intelligence (AI) Market Key Takeaway

• North America generated more than 36.90% of the market share in 2023.
• The Asia Pacific market is expected to expand at the highest CAGR of 19.8% from 2024 to 2034.
• By technology, the deep learning segment has captured a 36.9% market share in 2023.
• By solution, the services segment has accounted for a market share of over 39.4% in 2023.
• By end user, the BFSI segment accounted for 17.1% of the market share in 2023.

U.S. Artificial Intelligence (AI) Market Size and Growth 2024 to 2034

The U.S. artificial intelligence (AI) market size was estimated at USD 123.07 billion in 2023 and is predicted to be worth around USD 851.46 billion by 2034, at a CAGR of 19.3% from 2024 to 2034.

North America has garnered the largest market share in 2023. The higher demand for automated and technologically advanced hardware and software products across various end-use verticals and the favorable government policies that encourages the industries in North America to adopt artificial intelligence has significantly contributed towards the growth of the artificial intelligence market. In 2019, the American president launched an American initiative to promote US as leader in the artificial intelligence technology. This initiative focused at adoption of AI based systems by providing guidelines for the real life application of artificial intelligence technology in various industries and sectors. North America is the home to the leading tech giants such as Facebook, Amazon, Google, IBM, Microsoft, and Apple, which have significant contributions in the development of the AI market in North America.

Asia Pacific is expected to be the fastest growing artificial intelligence market during the forecast period. The rising investments by various organizations towards the adoption of artificial intelligence are boosting the demand for artificial intelligence technology. Baidu Incorporation, a tech giant based in China has entered into agreements with investors for the divestiture of financial services group providing consumer credit, wealth management, and other services related to business. Moreover, the growing adoption of artificial intelligence across various industries such as automotive, healthcare, retail, and food and beverages is propelling the growth of the artificial intelligence market in Asia Pacific region.

• Canada artificial intelligence (AI) market was valued at USD 51.87 billion in 2023 and it is expected to reach 360.57 billion in 2034, at a CAGR of 19.3% from 2024 to 2034.
• Germany  artificial intelligence (AI) market was valued at USD 31.25 billion in 2023 and it is projected to grow at a CAGR of 20.6% from 2024 to 2034.
• South Korea artificial intelligence (AI) market was valued at USD 19.5 billion in 2023 and it is expanding at a CAGR of 20.6% from 2024 to 2034.
• Japan artificial intelligence (AI) market was valued at USD 24.09 billion in 2022 and will reach at CAGR of 20.5% from 2024 to 2034.

Growth Factors

The rapid penetration of digital technologies and the internet has significantly contributed to the growth of the global artificial intelligence market in the past few years. The heavy investments by the tech giants in research and development are continuously fueling technological advancements in various industries. The burgeoning demand for artificial technology among the various end-use verticals such as automotive, healthcare, banking & finance, manufacturing, food and beverages, logistics, and retail is expected to significantly drive the growth of the global artificial intelligence market in the forthcoming years. Technological innovations have been always an important part of the majority of industries.

The rising popularity of various life-saving medical devices and the self-driving feature in the new electric vehicles is significantly boosting the growth of the AI market across the globe. The shifting focus of the globe towards the digitalization is positively impacting the market growth. The top global tech giants such as Google, Microsoft, IBM, Amazon, and Apple are increasing their investments in the upgradation and development of various applications of AI. The rising efforts of the tech giants towards improving the access to the AI is expected to foster the growth of the global AI market during the forecast period.

Favorable government initiatives are expected to impose a positive impact on industry growth. The establishment of subcommittees on machine learning and AI within the federal government has drawn the traction towards the AI industry. In 2020, The Government of India increased the spend for Digital India to $477 million to boost AI, IoT, big data, cyber security, machine learning and robotics. The artificial intelligence market is expected to witness significant growth in the BFSI sector on account of data mining applications as there is an increase in the adoption of artificial intelligence solutions in data analytics, fraud detection, cybersecurity, and database systems.

End-use industries have started integrating artificial intelligence into their business processes to streamline their operations. The artificial intelligence technology is gaining momentum as it assists enduser organizations to become more efficient and result oriented. The growing adoption of artificial intelligence is encouraging new entrants to venture into the AI marketplace by offering niche applicationspecific products and solutions. Furthermore, companies are also taking several strategic initiatives in industry consolidations to gain competitive advantages.

Economical parallel processing set-up

The artificial intelligence industry has been a software player so far, and very few companies manufacture hardware components such as CPU, ASIC, FPGA, and GPU. Recent trends in design tools have made FPGAs compatible with complex software practices and accessible to those who organize and build algorithm models. Hardware-based artificial intelligence solutions are being introduced to combat challenges associated with power consumption, sluggish processing, and lack of efficiency. Furthermore, as the market is maturing, there is an increasing need for creating a new business model through predictive, efficient automation and scalable parallel processing capabilities.

The need for hardware-based artificial intelligence products was recognized as end-use applications that demanded lower power and higher performance. Over the past few years, very few companies ventured into the development of these components. However, to gain a competitive advantage, vendors such as IBM Corporation and Intel Corporation have started manufacturing artificial intelligence chipsets to obtain high performance in scaling dynamic processes parallelly.

Technology Trends

• Introduction of machine learning and deep learning-based healthcare detection systems. For instance, IBM’s machine learning technology advances the early detection of diabetic eye disease using deep learning.
• The applications of deep neural networks for speech identification has resulted in significant improvements over current state of speech & voice recognition.
• Development of natural language processing (NLP), machine learning algorithm, automated reasoning, and integrated cloud platform paved way for the development of artificial intelligence.

Supplier Trends

• Several vendors are entering into partnership with end- user industries to enhance their reach. For instance, Microsoft’s intelligent network is partnering with LV Prasad Eye Institute in Hyderabad. This partnership is aimed at incorporating machine learning to bring data- driven eye care services in India.
• Several AI startups are coming up with innovations and latest technologies in deep learning software & hardware across e-commerce, cyber security and retail industry.

Regulatory Trends

• Introduction of machine learning and deep learning-based healthcare detection systems. For instance, IBM’s machine learning technology advances the early detection of diabetic eye disease using deep learning.
• The applications of deep neural networks for speech identification has resulted in significant improvements over current state of speech & voice recognition.
• Development of natural language processing (NLP), machine learning algorithm, automated reasoning, and integrated cloud platform paved Market way for the development of artificial intelligence.

Supplier Trends

• Several vendors are entering into partnership with end- user industries to enhance their reach. For instance, Microsoft’s intelligent network is partnering with LV Prasad Eye Institute in Hyderabad. This partnership is aimed at incorporating machine learning to bring data- driven eye care services in India.
• Several AI startups are coming up with innovations and latest technologies in deep learning software & hardware across e-commerce, cyber security and retail industry.
• For healthcare applications, deep learning and AI solutions are required to get Food and Drug Administration (FDA) approval.
• The European Union’s new general data protection regulation restricts automated individual decision making and includes the ‘right of explanation’ to clarify any algorithmic decision that are taken.
• According to EU, any algorithmic decisions based on user-level predictors is slated to be regulated from April 2018.

Market Scope

Market Dynamics

Driver: Rising implementation from the finance sector

The global finance sector is witnessing a major shift with the rapid acceptance of artificial intelligence technology. The rising implementation of artificial intelligence in the finance sector is transforming industry in several ways. Artificial intelligence is being used for algorithmic trading, fraud detection and credit risk assessment. It enables quicker and more accurate data analysis, leading to better investment decisions along with risk management. AI carries the ability to process large amounts of data and also aids in identifying patterns and trends that human agents might miss. Overall, artificial intelligence is enhancing operational efficiency, reducing costs and improving customer experience in the finance sector.

Restraint: Transparency in decision making

Artificial intelligence models and algorithms are generally complex. The complex nature of models makes it difficult to understand the process of decision making. Artificial intelligence-based solutions often generate outcomes that come up with black box nature, this can lead to lack of trust and accountability. This is particularly concerning in critical areas such as finance and healthcare. These industries or end users have a delicate need for transparency in order to protect the proprietary. Thus, transparency issues in decision making hamper the growth of the market.

Opportunity: Rising acceptance from research scientists

Research scientists are increasingly embracing artificial intelligence technology due to its transformative capabilities. This trend is expected to be continued in the upcoming years while offering an opportunity for the artificial intelligence market to expand. Technology accelerates data analysis, identifies patterns and aids in complex stimulations, enabling breakthroughs across diverse sectors. Ai-powered tools streamline repetitive tasks, liberating scientists to focus on innovation. In many fields, research scientists have started appreciating the importance and potential of AI to predict outcomes, discover hidden insights and optimize experiments. Overall, the scientific community recognizes AIs role in amplifying research efficiency and driving new discoveries, leading to a more symbiotic relationship between technology and human expertise.

Challenge: Lack of skilled professionals

The system with artificial intelligence technology needs skilled professionals, whereas the shortage or lack of such skilled and qualified professionals creates a major challenge for the market. Artificial intelligence technologies require specialized expertise in areas like machine learning, data science and software engineering. The demand for these professionals exceeds the supply, leading to talent shortages that can slow down AI development, implementation and innovation. Moreover, this shortage can limit the scalability and effectiveness of AI solutions across various industries. Thus, the lack of skilled professionals is observed to act as a challenge for the market’s expansion.

Technology Insights

Based on the technology, the deep learning segment accounted largest market share in 2023. This dominance is attributable to its complex applications driven by the data such as audio, video, and text recognition. The rising technological advancements in the field of deep learning is expected to overcome the challenges associated with the high volumes of data. Furthermore, the rising adoption of the deep learning technology in the medical field is expected to further fuel the growth of the segment during the forecast period.

The huge share of the machine learning in the total investments in AI technology is fueling its adoption in various applications such as hypothesis generation, clustering, altering, tagging, clustering, filtering, visualization, and navigation promotes the development of the cognitive solutions. The rising deployment of the on-premises hardware and cloud computing platforms for handling and storing huge volumes of data has significantly contributed to the rise of the data analytics platforms. The rising investments by the top tech giants in the innovation and research are expected to fuel the growth of the AI market in the upcoming future.

Global Artificial Intelligence (AI) Market Revenue, By Technology, 2022-2023(USD Billion)

Solution Insights

The services segment held a 39.4% share of the market while being the dominating segment in 2023. The dominance of the services segment in the market is attributed to the convenience and scalability offered by artificial intelligence (AI) as a service while deploying AI applications. Generally, AI projects are complex, they require multidisciplinary expertise in areas including computer vision, natural language processing and machine learning. Services are being utilized widely to bring together a diverse set of skills and resources to tackle such complex projects effectively.

In addition, AI service providers often offer tailored or customized solutions with expertise while implementing AI technologies. This makes it easier for businesses to adopt artificial intelligence technology without any extensive expertise.

Global Artificial Intelligence (AI) Market Revenue, By Solution, 2022-2023 (USD Billion)

End User Insights

The BFSI segment held the largest and a total of 17.1% share in 2023, the segment is expected to witness a significant growth during the forecast period. Artificial intelligence (AI) solutions are widely being adopted in the banking and finance sector for multiple purposes including account inquiries, loan applications, fraud detection and credit score monitoring. The BFSI sector becomes an ideal candidate for the AI application owing to the massive amount of data the sector generates on a daily basis. The demand for 24/7 frictionless service from the banking and finance sectors promotes the growth of the segment, as AI-powered tools are capable of offering customer service interactions by generating reliable outcomes for raised queries.

According to a study by Mckinsey, AI has the potential to increase the value of the global banking sector by up to $1 Trillion per year. Whereas according to the recently published report by Business Insider stated that, with the implementation of AI banks are anticipated to save up to $447 billion by the end of 2023. The BFSI sector is expected to remain at the forefront owing to the fastest adoption of AI solutions to reduce manual errors in banking and other finance-related operations.

Global Artificial Intelligence (AI) Market Revenue, By End User, 2022-2023 (USD Billion)

Artificial Intelligence (AI) Market Companies

• Intel Corporation
• Microsoft
• IBM
• Google
• Amazon Web Services
• Baidu, Inc.
• NVIDIA Corporation
• H2O.ai.
• Lifegraph
• Sensely, Inc.
• Enlitic, Inc.
• AiCure
• HyperVerge, Inc.
• Arm Limited
• Clarifai, Inc.

Recent Developments

• In April 2020, Advanced Micro Devices entered into a strategic alliance with Oxide Interactive for the development of graphics technology for the cloud gaming space.
• In December 2019, Intel completed the acquisition of an Israel based deep learning corporation, Habana Labs, to strengthen its AI portfolio.
• In September 2019, IBM entered into an agreement with a France based medical imaging company, Guerbet, for the development of AI-based cancer monitoring and diagnosis solution.

Segments Covered in the Report

By Solution

• Hardware 
• Software 
• Services 

By Technology 

• Machine Learning 
• Natural Language Processing 
• Context-Aware Computing 
• Computer Vision 

By End-Use 

• Healthcare
• BFSI
• Law
• Retail
• Advertising & Media
• Automotive & Transportation
• Agriculture
• Manufacturing
• Others

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa