Artificial Intelligence As A Service Market Size, Share & Analysis Report, 2024-2033
The global artificial intelligence as a service market size was exhibited at USD 7.82 billion in 2023 and is projected to hit around USD 190.28 billion by 2033, growing at a CAGR of 37.6% during the forecast period of 2024 to 2033.
Key Takeaways:
Artificial Intelligence As A Service Market Report Scope
| Report Coverage | Details |
| Market Size in 2024 | USD 7.82 Billion |
| Market Size by 2033 | USD 190.28 Billion |
| Growth Rate From 2024 to 2033 | CAGR of 37.6% |
| Base Year | 2023 |
| Forecast Period | 2024-2033 |
| Segments Covered | Technology, Service Type, Organization Size, Deployment, Vertical, Offering, Region |
| Market Analysis (Terms Used) | Value (US$ Million/Billion) or (Volume/Units) |
| Regional Scope | North America; Europe; Asia Pacific; Central and South America; the Middle East and Africa |
| Key Companies Profiled | Amazon Web Services, Inc.; Salesforce, Inc.; International Business Machines Corporation; Intel Corporation; Microsoft; BigML, Inc.; Google LLC; SAP SE; Fair Isaac Corporation; SAS Institute Inc. |
The increasing demand for machine learning services in the form of application programming interfaces (API) and software development kits (SDK), along with the rising number of innovative startups, are factors expected to aid market growth. For instance, in April 2023, CHATCRYPTO, a blockchain enterprise, introduced its latest innovation, the ChatCrypto token, a deflationary artificial intelligence token. This token serves as a key to access blockchain as a service (BaaS), artificial intelligence as a service (AIaaS), and the rental of high-performance computing (HPC) power through their infrastructure as a service (IaaS). The ChatCrypto token aims to establish a sustainable and resilient ecosystem, fostering stability for both the platform and its users.
Enterprises are investing extensively in AI services these days to unlock the power of their businesses. They are implementing the solutions to execute activities ranging from forecasting, planning, and predictive maintenance to customer service chatbots and other applications. The growing advancement of technology in recent years has resulted in a new threat scenario, compelling firms to explore advanced defensive tactics. Security experts will have tremendous resources to secure sensitive networks and avoid future data breaches if AI is integrated into cybersecurity. As AI performs more enterprise activities, firms will see a massive transformation in their business activities. Such factors are likely to boost the market growth during the forecast period.
Several government agencies, especially in emerging economies, understand the benefits and power of AI, and thus heavily promote AI-based infrastructure advancement. For instance, in June 2023, in the presence of the Union Minister of Education of India Dharmendra Pradhan, Data Tech Labs Inc. launched a campaign named 'AI for India.' This campaign is powered by Amazon Web Services, Inc. and supported by the All India Council for Technical Education (AICTE) and the Ministry of Education (GOI), with the main objective being training, evaluating, practicing, allocating projects, certifying, and employing 25 lakh people across India.
The increased spending on artificial intelligence and technical improvement for workflow optimization is projected to drive the demand for sophisticated analytical systems. Furthermore, the increased usage of cloud-based solutions and the growing need for artificial intelligence and cognitive computing are likely to expand the market size. For instance, in July 2023, IBM Corporation announced the acquisition of Databand.ai, Ltd., a provider of data observability software. The addition of Databand.ai expands IBM Corporation's R&D efforts and strategic partnerships in automation and artificial intelligence. IBM is well-positioned to address the complete spectrum of observability across IT operations by merging Databand.ai, Ltd. with IBM observability by IBM Watson Studio and Instana APM.
Segments Insights:
Organization Size Insights
The large enterprises segment dominated the market in 2023 with a revenue share of more than 75%. The high share can be attributed to the increased demand for AI in various end-user industries and the financial capability of these large enterprises to implement AIaaS into their workflows. For instance, in July 2023, Shenzhen Super Eagle Technology Co., Ltd., a company specializing in power supply, car chargers, mobile phone chargers, and desktop chargers, announced the release of IPAW Model L, its AI robot server, a tremendously exciting development for the hospitality business. The IPAW Model L is capable of meal delivery, voice interaction, precise navigation, customer attraction, smart obstacle avoidance, and multi-machine collaboration. The startup is currently collaborating with Heineken, McDonald's, and Hilton to bring this fascinating technology to the people.
The small and medium-sized enterprises segment is poised to expand at the fastest CAGR of 39.5% during the projection period. Businesses are becoming more digitalized, and small and medium-sized enterprises are experimenting with AI solutions to optimize their processes and operations, boosting the demand for AI services. SMEs can utilize predictive analytics to reduce risks, automate business forecasts with real-time data, and improve asset management efficiency. Enhanced prediction capabilities also enable broader market segmentation and open new avenues to innovation. SMEs can source external AI solutions and expertise through knowledge markets, often compensating for the lack of internal capacity.
Technology Insights
The machine learning (ML) segment led the market in 2023 with a revenue share of over 40%. Machine learning platforms, such as reinforcement machine learning algorithms, supervised machine learning algorithms, and unsupervised machine learning algorithms, are primarily concerned with developing computer systems that can access data and use it for self-learning. Machine learning algorithms, methodologies, and frameworks enable businesses to tackle complex problems fast. Furthermore, the most successful firms and industries plan and create new concepts and strategies to reduce workload. For instance, in June 2023, Amazon Web Services, Inc. unveiled Amazon CodeWhisperer. This new AI service employs machine learning to produce code suggestions for software engineers, bolstering its efforts in the emerging field of AI-powered programming. The Amazon CodeWhisperer provides code recommendations based on contextual information.
The natural language processing segment is anticipated to register the fastest CAGR of 38.9% over the forecast period. The segment's growth can be attributed to the capability of the technology to analyze user actions, which aids in providing an improved customer experience. For instance, in June 2023, NLP Cloud, an AI-as-a-service platform that has captured significant attention in recent years, initiated the integration of models powered by Graphcore IPUs into its range of commercial services. Commencing with the Whisper, a widely-used speech-to-text model, the company plans to incorporate additional language models optimized for Graphcore hardware.
Service Type Insights
The software segment dominated the market in 2023 with a revenue share of more than 77%. Software tools play a vital role in predicting outcomes from vast amounts of data by uncovering hidden patterns in data and datasets. Furthermore, software tools aid in the development of various company strategies and the making of business-critical decisions. For instance, in July 2023, FutureAI.guru, Inc., a consulting firm specializing in bridging the knowledge gap in artificial intelligence for businesses, launched Sallie, its newly designed software and an artificial entity. The software learns in real-time with speaking, hearing, vision, and mobility, allowing it to reach conclusions, a critical aspect of authentic thinking. Without prior information, Sallie can distinguish objects with eyesight, construct an internal model, ask questions, and take instructions.
The services segment is anticipated to register the fastest CAGR of 39.4% over the forecast period. The increasing adoption of smart solutions is likely to fuel the demand for AI services. These services use the capabilities of solutions that speed up corporate operations. For instance, in June 2021, Google launched Vertex AI, a managed AI service with new features designed to assist businesses in accelerating the deployment of AI models. The new Vertex AI will continue to speed up the deployment of machine learning models across enterprises. It also democratizes AI so that more users can deploy models in production, continually monitor, and create business impact with AI.
Deployment Insights
The public cloud segment dominated the market in 2023 with a revenue share of over 55%. Public cloud infrastructure can support massive data storage and the scalable processing capabilities required to crunch vast volumes of data and AI algorithms. The public cloud provides a variety of data storage alternatives, such as data warehouses, server less databases, data lakes, and NoSQL data stores. By operating specific workloads on the public cloud, while preserving highly sensitive data in their data center to suit client needs or regulatory requirements, organizations receive the freedom and innovation that the public cloud brings.
The hybrid cloud segment is anticipated to register a notable CAGR over the forecast period. Hybrid cloud technology gives precise, cost-effective computing and a route for leveraging large amounts of data. It enables businesses to successfully manage their data, providing strategic insights and suggestions, revealing patterns and trends in data, improving customer experience, and automating workflows. For instance, in June 2023, Microsoft released new Azure capabilities that will make it easier for businesses to operate AI software in hybrid cloud environments. Microsoft's new hybrid cloud artificial intelligence capabilities are based on Azure Kubernetes Service, a service for managing software container deployments, and Azure Machine Learning, a set of tools for developing neural networks.
Vertical Insights
The BFSI segment led the market in 2023 with the largest revenue share of over 19% of global revenue. The BFSI sector benefits from AI as a service to develop various growth prospects. Artificial intelligence is primarily employed in the BFSI sector for fraud detection, client suggestion, algorithmic trading, and chatbots. Banks are experimenting with chatbots, which are expected to drive other financial institutions to invest in comparable technologies. AI in finance can be valuable in assessing real-time activity in any setting. It gives reliable predictions and forecasts based on various variables, which are critical for business planning. For instance, in June 2023, Kiya.ai, an innovative digital solutions provider servicing financial institutions and governments worldwide, announced the arrival of Kiyaverse, a banking metaverse. India's first metaverse is allowing clients to access numerous banking services remotely. Kiya.ai will initially enable banks to launch their metaverse for partners, clients, and employees.
Other verticals, such as telecommunications, retail, government and defense, energy, manufacturing, and others, are expected to significantly contribute to the growth of the AI as a service market. AI assists in increasing the need for real-time data, accelerating time to market, lowering infrastructure costs, and improving business process time. For instance, in July 2023, Vodafone Idea Limited, one of the world's major telecommunications firms, launched a MLOps service across the organization with the assistance of Google Cloud. The AI Booster project intends to automate and standardize the creation and distribution of machine-learning models inside the carrier.
Offering Insights
The software as a service (SaaS) segment dominated the market in 2023 with the largest revenue share exceeding 63% in 2023. SaaS solutions provide cost-efficiency by offering subscription-based models and reducing hardware, software licenses, and IT infrastructure expenses. The accessibility of SaaS allows users to access data and applications from anywhere globally, which is ideal for businesses with international reach. Moreover, the user-friendly nature of SaaS makes it simple for even technically limited retailers to adopt and benefit from these solutions quickly.
The Infrastructure-as-a-service (IaaS) segment is anticipated to register the fastest CAGR of 43.4% over the forecast period. The increasing demands for reducing IT complexities, hiring a skilled workforce to manage IT infrastructures, and reducing deployment costs for data centers are factors attributed to driving the adoption of IaaS. Moreover, IaaS enables businesses to launch new applications, allows users to customize and access storage capacity, and helps manage the purchasing of on-premise hardware. For instance, in October 2023, DGPT, Inc. unveiled its cutting-edge AI computational power-sharing platform designed to democratize AI advantages for a broader audience. Presently, the platform supports hundreds of clients, boasting a node scale that extends into the hundreds of thousands, making its position as a top-tier provider of distributed AI infrastructure-as-a-service (AIaaS).
Regional Insights
North America dominated the market in 2023 with a revenue share of over 47% of the global revenue. This growth can be attributed to technical improvements and the increasing acceptance of digital technology. The region is one of the most important cognitive computing markets; numerous large industries and IT infrastructure, government regulations regarding data security, and cloud application and security information services contribute to market growth. For instance, in June 2023, Guardforce AI Co., Limited, a provider of comprehensive security solutions, announced the opening of new offices in San Francisco, California, and Tokyo, Japan, to develop its Robotics-as-a-Service business lines in these two regions. The T-series robot for food delivery robots, reception services, and disinfection robots for shopping malls, hotels, and restaurants will be among the robotics solutions offered by the company.
The Asia Pacific region is anticipated to witness significant growth in the AI as a service industry. Global investment in artificial intelligence is quickly expanding, with the Asia-Pacific area leading the way. Furthermore, the use of AI as a service is quickly expanding in nations such as India and China. As a result, the industry's scope and demand for artificial intelligence are rising.
Some of the prominent players in the artificial intelligence as a service market include:
Segments Covered in the Report
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global artificial intelligence as a service market.
Technology
Service Type
Organization Size
Deployment
Vertical
Offering
By Region
Cross-segment Market Size and Analysis for Mentioned Segments
Additional Company Profiles
(Upto 5 With No Cost)
Additional Countries (Apart
From Mentioned Countries)
Country/Region-specific Report
Go To Market Strategy
Region Specific Market DynamicsRegion Level Market Share Import Export AnalysisProduction AnalysisOthers