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The global AI governance market size was valued at USD 89,900 thousand in 2022 and the market is projected to grow from USD 125,886 thousand in 2023 to USD 1,434,786 thousand by 2030, exhibiting a CAGR of 41.6% during the forecast period.
AI governance solution encompasses a comprehensive framework of regulations, protocols, methodologies, and advanced technologies to ensure an organization’s utilization of AI technologies aligns with its strategies, objectives, values, and legal obligations. It also ensures adherence to ethical principles and the achievement of organizational goals. The adoption of these solutions is expected to be driven by several factors, including the growing government initiatives to harness AI technology, the increasing need to establish trust in AI systems, the rising demand for transparency in AI decision-making, and the expanding regulatory compliance requirements surrounding AI.
Rise in Awareness of AI Governance Technology to Mitigate the Risk of Unethical Use of AI to Drive the Market
The COVID-19 pandemic had a significant impact on the market. The increased reliance on AI technologies during the pandemic highlighted the need for robust governance mechanisms. Governments and organizations realized the importance of ethical considerations, transparency, and accountability in AI deployment. The pandemic also exposed the limitations and biases of AI systems. As AI technologies were deployed for tasks related to the pandemic, it became evident that these systems are not immune to biases and errors. This realization led to increased scrutiny and demands for responsible AI governance practices. Furthermore, stakeholders emphasized the need for fairness and robust testing of AI algorithms.
Overall, the pandemic accelerated the development and implementation of these frameworks, heightened scrutiny of international collaboration and escalated the economic value of responsible AI practices.
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Increasing Need for Transparency and Trust Building in AI Technologies to Aid Market Growth
The growing demand for transparency and trust in AI systems is a crucial driver for the market. Vendors in the market increasingly focus on advancements in AI, cloud solutions, and services, incorporating machine learning algorithms and deep learning frameworks. These factors are contributing to the rapid growth of the market. Organizations are actively adopting these solutions to ensure the effective achievement of their business goals. For instance,
Therefore, transparency has emerged as a crucial factor in addressing trust, fairness, and discrimination issues. These concerns have garnered significant attention in recent times. For instance,
Consequently, the growing demand for transparency in AI decision-making is expected to drive the global AI governance market growth during the forecast period.
Easy and Quick Access to Historical Dataset to Drive the Market Growth
The accessibility of historical datasets plays a crucial role in driving the pace of artificial intelligence innovation. With the decreasing data storage and recovery cost, healthcare institutions and government agencies generate vast amounts of unstructured data that researchers can readily access. These datasets cover many areas, including historical weather patterns and medical imaging. Furthermore, advancements in next-generation computing architectures empower data scientists and researchers to expedite innovation by providing extensive access to large datasets. Moreover, the progress made in deep learning and Artificial Neural Networks (ANN) dramatically accelerated the integration of AI across various industries, including aerospace, healthcare, manufacturing, and automotive.
Additionally, AI researchers and engineers require improved data quality to ensure effective AI governance. The success relies on the learning algorithm, such as a deep neural network model, and evaluation. In various industries, this solution enhances capabilities such as online and offline data storage, real-time offer management, automated checkout systems, and advanced behavior analytics. The demand for governance in data storage applications experienced substantial growth in recent years, primarily driven by the ease of access to valuable datasets. For instance,
Thus, these noteworthy contributions from Google have played a pivotal role in expanding the AI governance market share.
Inadequate AI Expertise and Skills to Hamper the Market Growth
The market faces significant challenges due to inadequate AI expertise and skills. As artificial intelligence advances rapidly, the need for effective governance and regulation becomes increasingly important. However, the shortage of expertise to understand and navigate the complex ethical, legal, and societal issues surrounding AI is expected to impede market growth. Furthermore, the professionals required to design robust policies and guidelines require a deep understanding of AI technologies, their potential risks, and the broader implications for society. Hence, the lack of skilled professionals to mitigate these risks is expected to hinder the adoption further.
Benefits Provided by Cloud-based Solution to Fuel the Segment Growth
Our research shows that the deployment is implemented on the cloud and on-premise. Cloud segment dominated the market and is expected to grow at the highest CAGR throughout the projected period owing to its several advantages, including scalability, flexibility, accessibility, cost efficiency, and data management capabilities, enabling them to effectively manage and regulate AI technologies while focusing on the core objectives.
Large Enterprise to Dominate Supported by Rising Product Demand
By enterprise type, the market is bifurcated into large enterprises and small & medium enterprises. Large enterprises segment is expected to dominate the market due to their early adoption of technologies, primarily Artificial Intelligence (AI), and the need for its governance.
The SMEs segment is projected to experience an average growth rate in AI governance adoption. This growth can be attributed to increasing SMEs in developing regions such as Asia Pacific, the Middle East & Africa, and South America, where AI technologies are being adopted increasingly.
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Growing Use of Artificial Intelligence (AI) in Retail to Propel the Segment
As per our study, the market has specific end-users, including healthcare, retail, IT and telecom, BFSI, automotive, media and entertainment, manufacturing, and others. The retail segment holds the highest share of the global market as customers increasingly embrace digital technologies, leading to changes and purchasing behaviors. As a result, there is a growing need for effective AI governance to enhance retail performance, address challenges, and stay ahead of the competitive retail landscape, which is expected to expand the overall market growth.
The healthcare segment is expected to grow at the highest CAGR as AI governance in healthcare settings is crucial for ensuring patient safety, upholding ethical standards, protecting patient privacy, and promoting AI technologies' responsible and effective use.
North America AI Governance Market Size, 2022 (USD Thousand)
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As per our report, the market is studied across five regions, including North America, South America, Europe, the Middle East & Africa, and Asia Pacific. These regions are further categorized into leading countries.
North America holds the highest share and has recently gained significant attention and momentum. Governments, regulatory bodies, and industry stakeholders in the region have recognized the need for policies and frameworks to address AI technologies' ethical and responsible use. For instance,
Asia Pacific is witnessing rapid growth and development owing to several countries in the region, including China, Japan, and Singapore, actively working on establishing regulatory frameworks and guidelines to govern AI's ethical and responsible use. For instance,
India and South Korea also develop frameworks to address legal and ethical challenges. For instance,
Europe is gaining prominence as the region recognizes the need for ethical and responsible use of AI technologies. European countries have been actively developing regulations and frameworks to address the potential risks associated with AI while promoting innovation.
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South America and the Middle East & Africa are expected to grow slowly as AI governance in these regions is still developing, with countries beginning to recognize the importance of developing regulatory frameworks and guidelines to address AI's ethical and responsible use.
Key Players Launch New Products to Strengthen Market Positioning
Prominent market players actively create advanced solutions to cater to customer demands. They also focus on enhancing their existing product portfolio to deliver flexible solutions with unique attributes. Furthermore, these organizations proactively pursue collaboration, acquisitions, and partnerships to bolster their product offerings.
An Infographic Representation of AI governance market
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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.
CAGR of 41.6% from 2023 to 2030
Value (USD Thousand)
By Deployment, Enterprise Type, End-user, and Region
By Enterprise Type
The market is projected to reach USD 1,434,786 thousand by 2030.
In 2022, the market was valued at USD 89,900 thousand.
The market is projected to grow at a CAGR of 41.6% during the forecast period.
The large enterprises segment is expected to lead the market.
Easy and quick access to historical datasets to drive market growth.
Microsoft Corporation, IBM Corporation, SAP SE, FICO, H2O.ai, Inc., Informatica LLC, OneTrust, LLC, Accenture, Salesforce.com, Inc., and Credo AI are the top players in the market.
North America is expected to hold the highest market share.
By end-user, healthcare is expected to grow with a remarkable CAGR during the forecast period.
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