Report ID: PMRREP34678
Number of Pages: 181
Format: PPT*, PDF, EXCEL
Industry: IT and Telecommunication
Published Date: July-2024
The AI as a service market is estimated to reach a valuation of US$82.4 billion by the year 2032, at a CAGR of 34.6%, during the forecast period 2024 to 2031.
Key Highlights of the Market
|
Market Attributes |
Key Insights |
|
Market Size (2024) |
US$10.3 Bn |
|
Projected Market Value (2031) |
US$82.4 Bn |
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Forecast Growth Rate (CAGR 2024 to 2031) |
34.6% |
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Historical Growth Rate (CAGR 2019 to 2023) |
30.5% |
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Artificial Intelligence as a service (AIaaS) provides consumers with cloud-based access to AI tools and capabilities, removing the requirement for considerable in-house infrastructure and expertise. The system provides the ability to easily adjust its capacity, adapt to changing needs, optimize expenses, seamlessly connect with other systems, and implement strong security measures.
Users can utilize a range of AI services, such as machine learning algorithms, natural language processing, and computer vision, whenever they need them, without requiring a lengthy setup process.
AIaaS caters to the requirement for artificial intelligence knowledge and infrastructure, specifically for enterprises that do not have their own competencies in these areas. By delegating AI work to specialist suppliers, firms may reduce expenses, concentrate on fundamental skills, and take advantage of swift innovation.
Artificial Intelligence as a service market has significant advantages such as time and cost efficiency, access to cutting-edge technologies, the capacity to scale up easily, and reduce risk.
It expedites the advancement and implementation of AI solutions. The consumers of AIaaS come from diverse areas such as finance, healthcare, retail, manufacturing, media, and entertainment. These industries encompass a wide range of businesses, including tiny start-ups as well as huge enterprises.
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Get a Customized VersionThe Artificial Intelligence as a Service (AIaaS) market share has witnessed robust growth from 2019 to 2023, witnessing a growth rate of 30.5%, driven by the increasing integration of AI technologies across industries and the demand for scalable and cost-effective AI solutions.
This period marked a transformative phase as organizations embraced AIaaS to enhance operational efficiency, customer experiences, and decision-making processes.
In 2019, the artificial intelligence as a service market size began to gain traction as businesses recognized the potential of AI technologies to drive innovation and competitive advantage.
Companies started exploring AIaaS offerings such as machine learning platforms, natural language processing (NLP) tools, and computer vision solutions delivered via cloud-based services.
The focus was on leveraging AI to automate tasks, gain insights from data, and improve business outcomes. Post-pandemic recovery and ongoing digitalization efforts propelled Artificial Intelligence as a Service (AIaaS) market into 2022 and 2023.
Enterprises across sectors intensified their investments in AIaaS to drive innovation, improve customer engagement, and achieve operational efficiency. The market witnessed the emergence of specialized AIaaS solutions tailored to specific industries such as healthcare, finance, retail, and manufacturing, addressing unique use cases and regulatory requirements.
Increased Demand for AI-Driven Automation
One of the primary drivers propelling Artificial Intelligence as a service market share is the growing demand among organizations to harness AI technologies for data-driven insights, and automation. Artificial Intelligence as a service solutions enable businesses to leverage advanced machine learning algorithms and predictive analytics models delivered via cloud services.
These capabilities empower enterprises to extract actionable insights from large volumes of data, optimize decision-making processes, and automate repetitive tasks across various functions.
AIaaS platforms offer sophisticated analytics tools that enable businesses to uncover patterns, trends, and correlations within data sets, facilitating informed strategic decisions and operational efficiencies.
Integration of AI-driven automation into workflows streamlines operations reduces manual labour, and enhances productivity. Tasks such as customer service interactions, inventory management, and predictive maintenance can be automated to improve accuracy and responsiveness.
Cloud-based AIaaS solutions provide scalability, allowing organizations to scale AI capabilities according to demand without significant upfront investments in hardware or infrastructure upgrades.
Lack of AI Expertise
The successful implementation and operation of Artificial Intelligence as a Service (AIaaS) market solution require specialized skills and expertise in AI development, data science, machine learning, and cloud computing. The shortage of qualified AI professionals poses a significant barrier for organizations seeking to adopt and maximize the benefits of Artificial Intelligence as a service.
There is a global shortage of AI talent with expertise in developing, deploying, and managing AI models and algorithms. This shortage limits organizations' ability to effectively leverage AIaaS solutions to drive innovation and competitive advantage.
Addressing the skills gap requires investment in training programs, upskilling initiatives, and academic partnerships to cultivate a pipeline of AI talent equipped with the necessary technical skills and domain knowledge.
Deploying AIaaS solutions involves complex integration processes, customization, and optimization of AI models to align with specific business objectives. Without adequate expertise, organizations may struggle to derive actionable insights and value from AI initiatives.
Hiring and retaining skilled AI professionals can be costly, particularly for smaller organizations and startups with limited resources, impacting their ability to compete in the AI-driven market landscape.
Expansion of Industry-specific AI solutions
There is a growing demand for Artificial Intelligence as a service solution tailored to specific industries such as healthcare, finance, retail, manufacturing, and transportation.
Industry-specific AI applications address unique challenges and regulatory requirements, offering personalized solutions that enhance operational efficiency, improve decision-making processes, and drive innovation.
AI-powered medical imaging, predictive analytics for personalized treatment plans, and virtual health assistants to improve patient care and operational workflows.
AI-driven fraud detection, risk assessment models, algorithmic trading systems, and personalized financial advisory services are implemented to enhance customer experience and optimize financial operations.
Further, AI-enabled customer analytics, personalized marketing campaigns, demand forecasting, and supply chain optimization to drive sales growth and operational efficiency.
AI-powered predictive maintenance, quality control, supply chain management optimization, and smart manufacturing processes to reduce downtime and enhance productivity.
Machine Learning Technology Dominates with 42% AI as a Service Market Share
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Market Segment by Technology |
Market Value Share 2023 |
|
Machine Learning |
42% |
Based on technology, the global Artificial Intelligence as a service market is further segmented into machine learning and computer vision, where the machine learning segment dominates the market share.
Machine learning platforms, including reinforcement, supervised, and unsupervised algorithms, focus on creating computer systems capable of accessing and utilizing data for autonomous learning.
Machine learning algorithms, techniques, and frameworks empower firms to efficiently address intricate difficulties. Moreover, the leading Artificial Intelligence as a service companies and sectors design and implement novel concepts and techniques to diminish workloads.
Large Enterprises Register 60% of Total Adoption
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Market Segment by Enterprise Size |
Market Value Share 2023 |
|
Large Enterprises |
60% |
Based on the enterprise size, the Artificial Intelligence as a Service market is further divided into small and medium enterprises and large enterprise, where the large enterprises segment dominates the market share. In 2023, the market share was primarily controlled by the large enterprises sector, which held a market share of approximately 60%.
Large enterprises have the financial resources and technical knowledge to invest in AI technologies, such as AI-as-a-service platforms, without significant cost limitations.
Large organizations, due to their extensive activities, produce substantial volumes of data. This makes AI as a Service (AIaaS) highly helpful for extracting important insights, streamlining processes, and enhancing decision-making across different business units and roles.
The implementation of AIaaS allows large organizations to acquire a competitive edge by improving operational efficiency, expediting innovation, and providing superior products and services to customers.
Scalability is of utmost importance for huge organizations that have intricate and ever-changing business requirements. AIaaS solutions can easily adjust resource allocation in response to demand fluctuations, allowing enterprises to successfully respond to changing market conditions and organizational needs.
Thus, major corporations are leading the way in adopting AIaaS since they have the necessary resources, extensive operations, competitive needs, innovative leadership, and scalability demands.
North America Strongest, Growth Accelerates in Asia Pacific
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Region |
Market Value Share 2023 |
|
North America |
48% |
North America is expected to hold the largest market share, accounting for over 48% of the global market share. The growth can be ascribed to advancements in technology and the growing embrace of digital technology.
The region is a significant market for cognitive computing, driven by various factors such as the presence of major companies and IT infrastructure, government restrictions on data protection, and the demand for cloud applications and security information services.
The purpose of offering extensive security solutions is to expand the company's Robotics-as-a-Service business operations in the region, which eventually drives the market forward in the North American region.
The AI as a service business is expected to have substantial growth in Asia Pacific. The region is at the forefront of the rapid expansion of global investment in artificial intelligence.
Moreover, the utilization of AI as a service is rapidly growing in countries like India, and China. Consequently, the industry is experiencing an increase in both the range and demand for AI.
June 2022 -
Wipro signed a strategic partnership deal with Eros Investments, a leader in the entertainment industry, to scale the global machine learning and artificial intelligence-based content localization solution.
February 2024 -
IBM, one of the leading tech firms, introduced a new suite of AIaaS offerings that is primarily focused on automation, including tools for streamlining workflows, improving decision-making, and enhancing customer experiences.
July 2023 -
Databricks signed an acquisition deal with MosaicML to expand its AI platform into building and deploying generative AI modules.
The major competitors in the market are primarily evaluated based on their product or service offerings, their financial statements, developments and the approaches implemented, the company's position in the global market scenario and its geographical reach.
Further, the global Artificial Intelligence as a Service market is characterized by intense competition and rapid technological advancements, driven by key players striving to innovate and expand their market presence.
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Attributes |
Details |
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Forecast Period |
2024 - 2031 |
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Historical Data Available for |
2019 - 2023 |
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Market Analysis |
US$ Billion for Value |
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Key Regions Covered |
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Key Companies Profiled |
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Pricing |
Available upon request |
By Technology
By Service Type
By Enterprise Size
By Region
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Machine Learning Technology dominates the technology segment of the market.
The AIaaS market is segmented based on technology, service type, and enterprise size.
North America holds a significant market share due to the presence of major companies in the region.
Amazon Web Services, Inc., Salesforce, Inc., International Business Machines Corporation, Intel Corporation, and Microsoft are some of the top key players in the industry.
The market is estimated to exhibit a CAGR of 34.6% over the forecast period.
