AI in IoT Market Expected to Reach $91.7 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “AI in IoT Market," The ai in iot market was valued at $10.3 billion in 2022, and is estimated to reach $91.7 billion by 2032, growing at a CAGR of 24.8% from 2023 to 2032.

AI in IoT solutions provides automation capabilities to several industries, reducing operational costs, increasing efficiency and accuracy, and improving end-user experience. Automation capabilities have become increasingly important as businesses strive to streamline their operations and increase productivity. In addition, AI in IoT may be used to optimize transportation systems, reduce traffic congestion, and improve safety on roads. With the growth of urbanization, there is an increasing demand for intelligent transportation systems that can improve the flow of traffic and reduce accidents. Overall, the artificial intelligence in IoT market is driven by the need for intelligent and automated systems that can process and analyze vast amounts of data in real-time, enabling organizations to make informed decisions and take actions based on data-driven insights. In addition, AI in IoT solutions is increasingly being employed in media and entertainment sectors to enable personalized customer experience, products, and services. It also streamlined the communication operations on smartphones, tablets, and computer devices to facilitate remote work in organizations.

On the basis of technology, the ML and deep learning segment dominated the artificial intelligence in IoT market in 2022 and is expected to continue this trend during the forecast period. The growing need for advanced data analytics technology in various industries is one of the primary reasons enterprises are increasing their investments in the ML and deep learning solutions. However, the NLP segments are expected to exhibit the highest growth during the forecast period. The NLP solutions are mostly integrated in voice-controlled interfaces such as chatbots, to communicate with IoT devices and improve the user experience. Hence, the adoption of NLP solutions in AI-powered IoT devices provides numerous benefits including scalability, personalization, and enhanced user experience.

By region, North America dominated the market share in 2022 for the AI in IoT market size, as this region has been at the forefront of digital solutions initiatives, including the development and adoption of advanced technologies. The region has a strong presence of major technology companies, such as IBM Corporation, Oracle Corporation, and others, which have heavily invested in advanced digital platforms and services. Thus, anticipated to propel the growth of the AI in IoT market forecast. However, Asia-Pacific is expected to exhibit the highest growth during the forecast period. This is attributed to the rapid growth in contactless solutions adoption across various industries, including manufacturing, logistics, healthcare, smart cities, and agriculture are expected to provide lucrative growth opportunities for the AI in IoT industry.

The rapid increase in COVID-19 cases has compelled many businesses and their employees to adjust to remote working and work-from-home standards, which in turn fueled the adoption of internet-enabled tools and AI services during the period. Moreover, due to COVID-19 outbreak, businesses have been forced to shift their attention and increase their online presence, which created the need for digital solutions more than ever. However, with the lack of on-site workers during the pandemic, virtual services tools assisted small businesses to keep up with the rising digital transformation trends. IoT devices such as VDI tools supported small businesses in maintaining their business operations as normal amidst the outbreak of the COVID-19 pandemic. Moreover, the growing demand for cloud services and the lower availability of skilled employees during the period drove the demand for AI in IoT industry.   

Further, consumer behavior and preferences have also witnessed a significant shift due to the outbreak of the pandemic. The major customer expectations that cause the shift in consumer preference include safety and security. This has led to the emergence of new buying patterns and sustainability considerations among consumers and, thus, software operators are now increasing their working efforts to provide sustainability and safety improvements. For instance, in February 2020, Panasonic launched a new IoT and AI-enabled platform, called Miraie. With this new technology, the company aims to empower the everyday lives of consumers with comfort, convenience, and seamless connectivity across all Panasonic devices. Consequently, the demand for AI in IoT solutions is expected to experience significant growth in the global market.

Key Findings of the Study

• By component, the platform segment accounted for the largest AI in IoT market share in 2022.
• By technology, the machine learning (ML) and deep learning segment accounted for the largest AI in IoT market share in 2022.
• By industry vertical, the manufacturing sector accounted for the largest AI in IoT market share in 2022.
• Region wise, North America generated the highest revenue in 2022.

The market players operating in the AI in IoT market analysis are Amazon Web Services Inc., Google LLC, Hitachi Ltd., IBM Corporation, Oracle Corporation, PTC Inc., Salesforce, Inc., SAP SE, SAS Institute, Inc., and Softweb Solutions Inc. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships, which help to drive the growth of the AI in IoT market globally.