Artificial Intelligence (AI) Software Market Size, Share, Trends, Growth and Forecast 2032

Artificial Intelligence (AI) Software Industry Prospective:

The global Artificial Intelligence (AI) Software market size was worth around USD 57.9 billion in 2023 and is predicted to grow to around USD 680.8 billion by 2032, with a compound annual growth rate (CAGR) of roughly 31.5% between 2024 and 2032.

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Artificial Intelligence (AI) Software Market: Overview

AI software is a type of computer program that can perform complicated activities, including problem-solving, learning, and decision-making. AI software can do jobs with greater sensitivity and nuance by simulating human intelligence through machine learning.

AI software is used by businesses to identify new areas for improvement and to help their operations function more smoothly. Better human resource allocation may arise from this, freeing up employees to concentrate on more rewarding and strategic work.

The Artificial Intelligence (AI) software market is influenced by several variables, such as increasing demand for automation, growth in big data and cloud computing, advancements in machine learning and deep learning, expansion of AI in healthcare, and others.

However, the high implementation and operational costs might hamper the Artificial Intelligence (AI) software market during the forecast period.

Key Insights

• As per the analysis shared by our research analyst, the global Artificial Intelligence (AI) Software market is estimated to grow annually at a CAGR of around 31.5% over the forecast period (2024-2032).
• In terms of revenue, the global Artificial Intelligence (AI) Software market size was valued at around USD 57.9 billion in 2023 and is projected to reach USD 680.8 billion by 2032.
• The growing technical innovation in the software is expected to drive the Artificial Intelligence (AI) Software market over the forecast period.
• Based on the deployment, the on-premises segment is expected to hold the largest market share over the forecast period.
• Based on the technology, the machine learning segment is expected to dominate the market expansion over the projected period.
• Based on the application, the automation segment is expected to capture the largest market share over the projected period.
• Based on the end-user, the BFSI sector holds a prominent revenue share in the AI market.
• Based on region, North America is expected to dominate the market during the forecast period.

Artificial Intelligence (AI) Software Market: Growth Drivers

Technological advancements drive market growth

It is anticipated that certain disruptive technological developments in the field of artificial intelligence (AI) will spur innovation and transform other industries. Combining edge computing and AI is one of the biggest developments since it enables real-time analytics and quicker data processing on devices, improving performance and lowering latency.

Furthermore, coding, content creation, and customized user experiences are being revolutionized by the advent of generative AI models, such as OpenAI's GPT series. Automation driven by AI is also becoming more and more common in several industries.

Processes are streamlined, and efficiency is increased through intelligent process automation. Approximately 97% of mobile users use AI-powered voice assistants, which are currently installed on over 4 billion devices, according to CompTIA, Inc. Thus, the aforementioned stats drive the Artificial Intelligence (AI) Software market.

Artificial Intelligence (AI) Software Market: Restraints

High implementation and operational costs hinder market growth

Particularly for small and medium-sized companies (SMEs), one of the biggest obstacles to adopting artificial intelligence (AI) software is their expensive implementation and running costs. AI software development requires significant maintenance, specialized personnel, and infrastructure expenses.

AI models—especially deep learning systems—need high-performance GPUs, TPUs, and cloud computing resources both for training and deployment. Large-scale artificial intelligence applications consume a lot of energy, which drives up running expenses.

Developing artificial intelligence solutions requires time-consuming, resource-intensive processes, including data collecting, preprocessing, and model training. Custom AI models are sometimes needed by companies to satisfy the needs of their specific sector, which increases development expenses. Therefore, the high implementation and operational costs might hinder the expansion of the artificial intelligence (AI) software industry.

Artificial Intelligence (AI) Software Market: Opportunities

The rising product innovation offers a lucrative opportunity for market growth

The rising product innovation is expected to offer a lucrative opportunity for the Artificial Intelligence (AI) Software market over the forecast period.

For instance, in May 2024, to assist revenue teams in closing more sales, Salesloft, the only platform that prioritizes, automates, and suggests actions, unveiled new platform advancements that leverage artificial intelligence (AI) to find crucial deal insights. These new conversation intelligence features assist sales managers in getting tailored feedback for their representatives, help sellers better prepare for meetings with buyers, extract deeper pipeline insights from calls, and capture all members of intricate buying committees without the need for human data entry.

Artificial Intelligence (AI) Software Market: Challenges

The lack of skilled AI professionals poses a major challenge to market expansion

The lack of qualified AI specialists is one of the main obstacles facing the AI software market. The need for specialists in machine learning, deep learning, natural language processing (NLP), and data science is significantly greater than the supply of workers as AI use spreads throughout industries. Higher hiring expenses, a delayed uptake of AI, and challenges with AI implementation are all caused by this talent gap.

For instance, in 2024, AI spending will grow to over USD 550 billion, and there will be an expected AI talent gap of 50%, according to new research from Thomson Reuters.

Artificial Intelligence (AI) Software Market : Report Scope

Artificial Intelligence (AI) Software Market: Segmentation

The global Artificial Intelligence (AI) Software industry is segmented based on deployment, technology, application, end-user, and region.

Based on the deployment, the global Artificial Intelligence (AI) Software market is bifurcated into on-premises, cloud, and hybrid. The on-premises segment is expected to hold the largest market share over the forecast period. The segment expansion is attributed to the favorable outcomes regarding the deployment of the on-premises model in terms of security.

Based on the technology, the global Artificial Intelligence (AI) Software industry is bifurcated into computer vision, data analytics, machine learning, natural language processing, and other technologies. The machine learning segment is expected to dominate the market expansion over the projected period. This is owing to the investment in advanced technology. Companies like Meta are advancing internal AI tools, such as "Metamate," to boost productivity in coding, research, and communication, indicating a broader industry trend toward integrating AI into business operations.

Based on the application, the global Artificial Intelligence (AI) Software market is bifurcated into automation, remote sensing, medical diagnosis, speech recognition, text recognition, and other applications. The automation segment is expected to capture the largest market share over the projected period due to the growing trend of automation of several works across the industry.

Based on the end-user, the global Artificial Intelligence (AI) Software industry is bifurcated into advertising and media, BFSI, healthcare, automotive and transportation, robotics, food, governance, energy, architecture, tourism industries, and other end-users. The BFSI sector holds a prominent revenue share in the AI market as this sector requires enhanced customer services.

For instance, AI-powered chatbots and virtual assistants are improving customer interactions by providing 24/7 support and personalized services, leading to increased customer satisfaction and retention.

Artificial Intelligence (AI) Software Market: Regional Analysis

North America dominates the market over the projected period

North America is expected to dominate the global Artificial Intelligence (AI) Software market during the forecast period. Leading tech businesses and research institutes present in the region help to drive constant developments in artificial intelligence technologies, supporting the evolution of the market.

For instance, Microsoft and NVIDIA teamed up in March 2024 to create artificial intelligence for the healthcare and life sciences industries. This partnership leverages NVIDIA's DGX Cloud and Clara suite as well as Microsoft Azure's cloud architecture and advanced computing capacity.

Using developments in domains, including clinical research and medication discovery, the aim is to accelerate creativity and improve patient care. Major companies are also greatly raising capital spending on artificial intelligence infrastructure and research, indicating substantial trust in AI's ability to change business models.

Artificial Intelligence (AI) Software Market: Competitive Analysis

The global Artificial Intelligence (AI) Software market is dominated by players like

• Arm Limited
• Advanced Micro Devices
• AiCure
• Atomwise Inc.
• Google LLC
• Ayasdi AI LLC
• Clarifai Inc.
• Baidu Inc.
• H2O.ai.
• Cyrcadia Health
• Enlitic Inc.
• HyperVerge Inc.
• International Business Machines Corporation
• IBM Watson Health
• Intel Corporation
• Iris.ai AS.
• Lifegraph
• Microsoft
• NVIDIA Corporation
• Sensely Inc.
• Zebra Medical Vision Inc.

The global Artificial Intelligence (AI) Software market is segmented as follows:

By Deployment

•  On-Premises
• Cloud
• Hybrid

By Technology

• Computer Vision
• Data Analytics
• Machine Learning
• Natural Language Processing
• Other Technologies

By Application

• Automation
• Remote Sensing
• Medical Diagnosis
• Speech Recognition
• Text Recognition
• Other Applications

By End-User

• Advertising and Media
• BFSI
• Healthcare
• Automotive and Transportation
• Robotics
• Food
• Governance
• Energy
• Architecture
• Tourism Industries
• Other End-Users

By Region

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