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Artificial Intelligence (AI) Market Size, Share & Industry Analysis, By Component (Hardware, Software/Platform, and Services), By Function (Human Resources, Marketing & Sales, Product/Service Deployment, Service Operation, Risk, Supply-Chain Management, and Others (Strategy and Corporate Finance)), By Deployment (Cloud and On-premises), By Industry (Healthcare, Retail, IT & Telecom, BFSI, Automotive, Advertising & Media, Manufacturing, and Others), and Regional Forecast, 2024-2032

Last Updated: June 24, 2024 | Format: PDF | Report ID: FBI100114



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The global artificial intelligence (AI) market size was valued at USD 515.31 billion in 2023 and is projected to grow from USD 621.19 billion in 2024 to USD 2,740.46 billion by 2032, exhibiting a CAGR of 20.4% during the forecast period. North America dominated the global market with a share of 41.23% in 2023.

Artificial intelligence is the simulation of human intelligence processes using various machines by means of creating intelligent software and hardware capable of replicating human behavior such as learning and problem-solving. The report covers AI-based solutions such as AWS Chatbots, OpenAI Codex, and Azure AI, and others.

The global AI market is set to grow drastically with the surge in artificial intelligence applications, increased number of relevant partnerships and collaborations, rise in small-scale AI providers, changing complexities of business structure, and hyper-personalized service demands. Additionally, government initiatives and investments in AI technologies for enterprises and end users create benefits.

The pandemic crisis changed the way businesses operated and increased business complexities. In order to adopt these changes, companies shifted their work processes on cloud. This surged the adoption of advanced technologies such as AI, machine learning, and others.

The healthcare sector was among the early adopters of this technology which improved the accuracy and efficiency of diagnosis, treatments, and forecasting. For instance,

According to the January 2022 study report, researchers at the Regenstrief Institute and Indiana University found that machine learning (ML) models could support public health decision-making during the pandemic.

Artificial Intelligence Market Trends

AI Technologies Continue to Dominate With the Introduction of ChatGPT

According to OpenAI, their AI tool, ChatGPT, gained over one million users in just five days after its launch in November 2022. The tool can develop human-like text, from writing short stories, term papers, and music to solving math problems, programming basic code, and doing translations. However, other popular online services took much longer to hit the million-user mark. The below stats showcase the time popular online services took to reach one million users.


As a response to the newly launched AI tool, hyper scalers across the globe have been introducing their versions of AI-powered chatbots. These chatbots would directly compete with ChatGPT and help hyper scalers maintain their dominant position in this AI market. Some recent launches in response to ChatGPT were,

  • February 2023 – Baidu, Inc. launched its own AI chatbot named Ernie bot in English and Wenxin Yiyan in Chinese. With this, the shares of Baidu increased by more than 13% in Hong Kong.

Thus, with the introduction of ChatGPT, companies have been engaging and investing in AI technologies to respond to these AI-driven tools. These initiatives and implementations of AI technologies have been increasing the demand for this market. The demand will likely maintain AI's dominance over the upcoming years.

In 2024, generative AI is expected to continue its expansion across industries globally. According to a report presented by Bloomberg Intelligence (BI), the generative AI market is expected to grow exponentially to USD 1.3 trillion in the coming decade, achieving a USD 40 billion market size by 2022. Nowadays, transformer-based text generation models and diffusion-based image generation models are being exploited by generative AI. Such models enable systems to learn from existing data and generate extensive information that closely resembles the input information. Moreover, chatGPT exalted AI (Artificial Intelligence) and LLM (Large Language Model) and is widening its application in various industries, such as banking & financial services, healthcare, and travel & hospitality. This has resulted in less human interference.

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Artificial Intelligence (AI) Market Growth Factors

Increased Number of Relevant Partnerships and Collaborations to Achieve Advancements in Artificial Intelligence Technology

AI companies continuously engage in relevant partnerships and collaborations to gain technological excellence. The key vendors adopt this strategy with the aim of combining the best of their concepts and the concepts of the partnered company. For instance,

  • October 2022 - Ericsson Canada partnered with universities based in Montreal to improve 5G sustainability using artificial intelligence.

Additionally, the key vendors have been acquiring AI-driven startups to expand their global reach, enhance marketing strategies, and gain technological expertise. For instance,

  • September 2022 - IBM Corporation acquired Dialexa to drive business innovation and digital growth strategies. Dialexa, based in the U.S., is a digital product engineering services firm, and by acquiring this company, IBM expects to strengthen its product engineering expertise and customer service.

Furthermore, the path for AI in 2024 belongs to the fastest advancement and flawless integration in both physical and digital environments, with significant investments propelling R&D activities. Thus, more relevant partnerships and collaborations are helping AI-driven companies achieve advancements in artificial intelligence technology.


Challenges Associated With the All-at-Once Adoption of AI Tools Can Hamper the Market Growth

The lack of AI talent in developing countries, challenges associated with the all-at-once adoption of AI tools, and the black box effect account for the market's restraining factors. Companies have upgraded their solutions to counter these factors with more ethical and explainable AI models to eliminate the black box effect. The black box effect means that the AI algorithms sometimes develop results that are not easily verified. The outcomes of these algorithms may have a hidden bias that is difficult to spot. Therefore, there is no sufficient explanation for the results. Thus, users tend to lack trust and safety in adopting AI tools.

Moreover, governments and corporates have been developing research institutes and educational sectors to overcome the lack of AI talent globally. Thus, all the above factors promise the accelerating growth of this industry across the globe in the upcoming years.

Artificial Intelligence (AI) Market Segmentation Analysis

By Component Analysis

Rise in AI Software Adoption across Several Industries to Aid the Market Growth

On the basis of component, the market is segmented into hardware, software/platform, and services. Among these, the software is expected to dominate in 2022. Software dominates the market due to rise in adoption of AI services among the small scale providers and government initiatives that empower companies to deploy AI solutions globally.

Moreover, in the coming years, the services and hardware are expected to nurture positively. Companies, including NVIDIA Corporation and Hewlett Packard Enterprise Development LP, are continuously developing their AI hardware solutions. These relevant investments are expected to increase the global demand for tools and related services.

By Function Analysis

Service Operation Dominates Market Due to its Rising Popularity

The market is further categorized into human resources, marketing & sales, product/service deployment, service operation, risk, and supply-chain management. Among these, the service operation segment dominated the market in 2023. Artificial intelligence minimizes service management toil and further enhances customer service by solving problems more quickly. According to a recent BMC survey, 69% of businesses are implementing advanced technologies such as artificial intelligence into their IT service management and IT operations management processes, which are called ServiceOps. The reason for integrating AI into their services was revealed to be greater operational efficiencies.

Moreover, risk, supply chain management, and marketing/sales industries have been adopting AI at an accelerated pace. These industries have been leveraging AI to benefit the most from the technology and increase their customer experience.

Thus, in the coming years, risk, supply chain management, and marketing/sales are expected to showcase a promising growth rate.

By Deployment Analysis

Cloud and On-Premises to Showcase a Similar Growth Rate in the Coming Years

According to deployment, the market is further bifurcated into cloud and on-premises. Among these, on-premises is expected to dominate in 2022. However, cloud deployments show a similar level of adoption in the same year. AI keeps developing daily; for instance, the ongoing trend of generative AI pushed companies to invest in and develop AI tools. This indicates growing demand for on-premises as well as cloud solutions across the globe.

Moreover, the surge in adopting cloud computing technologies amid the pandemic has contributed to rising cloud deployments.

By Industry Analysis

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IT and Telecom Segment to Capture Maximum Market Share owing to Rising Business Complexity

According to the industry, the market share is bifurcated into retail, IT & telecom, healthcare, manufacturing, BFSI, advertising & media, automotive, and others. Among these, IT & Telecom is expected to dominate in 2022.

The pandemic has transformed the way businesses operate, moving most business processes to the cloud. The IT and telecommunications industries are rapidly moving their business operations to the cloud. The trend of enterprises to the cloud has become a major factor behind the generation of large amounts of data. This lead in data generation has led to the need for immediate processing, which has been a limiting factor in cloud computing processes. Because of this, the IT and telecom industry will have the highest market share in his 2022. Moreover, the healthcare industry is expected to thrive in the coming years due to the increasing number of artificial intelligence applications that explicitly target this sector. Moreover, increasing adoption of AI solutions in BFSI, automotive, oil and gas industries is expected to increase steadily in this market during the forecast period.


The report is analyzed across North America, Latin America, Europe, the Middle East, Africa, and Asia Pacific.

North America Artificial Intelligence (AI) Market Size, 2023 (USD Billion)

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North America dominates the market due to the presence of hyper scalers such as IBM Corporation and Microsoft Corporation, and others. The recent ongoing generative AI trend pushed these hyper scalers to upgrade their AI technologies and develop solutions that could cater to changing user requirements. According to the Skynova survey in 2023, nearly 80% of U.S.-based small business owners were optimistic about their AI deployments. Furthermore, North America plays a vital role in AI technological innovations. Owing to the above-mentioned reasons, the region dominates the market.

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Furthermore, Asia Pacific is expected to record the highest CAGR in the coming years. This is owing to the increasing investments in this industry and technologies, which surged due to the pandemic. China’s dominance over AI research is the primary factor nurturing the market in the upcoming years.

Moreover, Latin America, Europe, and the Middle East and Africa have shown positive areas in adopting advanced technologies amid the pandemic. The companies have been modernizing their existing business processes with advanced technologies. Furthermore, these regions lack to lead the market because of challenges associated with the all-at-once adoption of AI technologies and the black box effect, and others.

List of Key Companies in Artificial Intelligence (AI) Market

Companies Focus on Growing their Partner Ecosystem to Gain Competitive Edge

The key players in the global market are enriching their partner ecosystem to gain a competitive edge over the other players. The companies adopt this strategy to develop new opportunities by building new solutions together; generate revenue by co-selling together; expand their presence, and share marketing strategies. The companies have been upgrading their partner program to enhance support and benefits, inside access, competitive incentives, marketing and demand generation support.

List of Key Companies Profiled in AI Industry: 


  • February 2023 - IBM Corporation acquired StepZen Inc, a GraphQL server development company. This server is inbuilt with a unique architecture which allows developers to build GraphQL APIs easily and with less code.

  • February 2023 - Google launched Bard, their newest AI chatbot service driven by the LaMDA (Language Model for Dialogue Applications). However, the CEO announced that the platform would only be restricted to test users before publicly available.

  • February 2023 - Aurora Mobile Limited is the new ecosystem partner of Ernie Bot. With this, the company will access the chatbot and apply Baidu’s intelligent dialogue technology in its marketing technology and customer engagement services.  

  • January 2023 - Microsoft Corporation and OpenAI extend their partnership, intending to accelerate AI developments and provide advanced solutions to their customers. The evolution of the partnership enables both companies to commercialize the resulting advanced AI technologies independently.

  • January 2023 - Walmart, a U.S.-headquartered retail giant, partnered with software company Salesforce to offer pickup and delivery services for retailers. This partnership will provide a personalized customer experience using AI and real-time data.


An Infographic Representation of Artificial Intelligence Market

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The analyzed report highlights major regions globally to offer a better understanding to the user. Furthermore, the report highlights recent industry and market trends and analyzes technologies deployed across the globe. In addition, the report showcases and highlights, directly and indirectly, impacting factors and restraints, which helps the user gain in-depth knowledge about the market.

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Study Period


Base Year


Estimated Year


Forecast Period


Historical Period


Growth Rate

CAGR of 20.4% from 2024 to 2032


Value (USD Billion)


By Component

  • Hardware

  • Software/Platform

  • Services

By Function

  • Human Resources

  • Marketing & Sales

  • Product/Service Deployment

  • Service Operation

  • Risk

  • Supply-Chain Management

  • Others

By Deployment

  • Cloud

  • On-premises

By Industry

  • Healthcare

  • Retail

  • IT & Telecom

  • BFSI

  • Automotive

  • Advertising & Media

  • Manufacturing

  • Others

By Region

  • North America (By Component, By Function, By Deployment, By Industry, and By Country)

    • U.S. (By Component)

    • Canada (By Component)

  • Latin America (By Component, By Function, By Deployment, By Industry, and By Country)

    • Brazil (By Component)

    • Mexico (By Component)

    • Rest of Latin America

  • Europe (By Component, By Function, By Deployment, By Industry, and By Country)

    • U.K. (By Component)

    • Germany (By Component)

    • France (By Component)

    • Scandinavia (By Component)

    • Rest of Europe

  • Middle East & Africa (By Component, By Function, By Deployment, By Industry, and By Country)

    • GCC (By Component)

    • South Africa (By Component)

    • Rest of the Middle East & Africa

  • Asia Pacific (By Component, By Function, By Deployment, By Industry, and By Country)

    • China (By Component)

    • Japan (By Component)

    • India (By Component)

    • Southeast Asia (By Component)

    • Rest of Asia Pacific

Frequently Asked Questions

The market value is projected to reach USD 2,740.46 billion by 2032.

In 2023, the market value stood at USD 515.31 billion.

The service operation segment was leading the market in 2023.

Government initiatives and investments in artificial intelligence technologies to drive the growth of market.

Microsoft Corporation, IBM Corporation, Amazon.com, Inc., Apple Inc., and NVIDIA Corporation are the top players in the market.

North America is expected to hold the highest market share.

Asia Pacific is expected to grow at a significant CAGR.

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