The global AI in IoT market size was valued at USD 82.24 billion in 2023 and is predicted to reach around USD 153.08 billion by 2033, expanding at a CAGR of 6.41% from 2024 to 2033.
Key Points
- The North America AI in IoT market size reached USD 27.14 billion in 2023 and is expected to attain around USD 51.28 billion by 2033, poised to grow at a CAGR of 6.56% between 2024 and 2033.
- North America dominated the global AI in IoT market in 2023.
- Asia Pacific is anticipated to witness the fastest growth over the studied period.
- By component, the software segment dominated the global market in 2023.
- By component, the platform segment is expected to grow at a significant rate in the market during the projected period.
- By end-user, in 2023, the manufacturing segment led the market in 2023.
- By end-user, the banking, financial services, & insurance segment is expected to grow at a significant rate during the forecast period.
The AI in IoT market integrates artificial intelligence with the Internet of Things (IoT) devices and systems. This convergence enhances IoT capabilities by enabling devices to analyze data, make decisions, and perform tasks autonomously, thereby improving efficiency and enabling advanced applications across various industries.
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Growth Factors:
Key growth factors driving the AI in IoT market include increasing adoption of IoT devices across industries, advancements in artificial intelligence technologies such as machine learning and natural language processing, growing investments in IoT infrastructure, and rising demand for real-time data analytics and decision-making capabilities.
AI in IoT Market Trends
- Edge Computing Adoption: AI algorithms are increasingly being integrated at the edge of IoT networks to process data locally. This reduces latency, improves response times, and enhances data privacy.
- Predictive Maintenance: AI-powered IoT solutions are enabling predictive maintenance by analyzing real-time data from connected devices. This helps in identifying equipment failures before they occur, minimizing downtime, and reducing maintenance costs.
- Enhanced Security: AI is being leveraged to strengthen IoT security by detecting anomalies in device behavior and network traffic patterns. This proactive approach helps in mitigating potential cyber threats.
- AI-driven Automation: IoT devices are becoming smarter with AI, enabling autonomous decision-making and actions based on data insights. This automation enhances operational efficiency across various industries.
- Integration with 5G: The rollout of 5G networks is facilitating faster data transfer and lower latency, enabling more real-time AI processing in IoT applications. This combination is driving innovations in smart cities, connected vehicles, and industrial IoT.
- Personalized User Experiences: AI algorithms are used to analyze user behavior and preferences gathered from IoT devices. This data helps in offering personalized services and improving user experiences in smart homes, healthcare, and retail environments.
Region Insights
North America holds a significant share in the AI in IoT market due to early adoption of IoT technologies, presence of major tech companies investing in AI and IoT solutions, and supportive government initiatives. Europe follows closely with rapid IoT deployment across sectors like manufacturing and healthcare, while Asia Pacific shows robust growth potential driven by expanding IoT infrastructure and digital transformation initiatives in emerging economies.
AI in IoT Market Scope
| Report Coverage | Details |
| Market Size by 2033 | USD 153.08 Billion |
| Market Size in 2023 | USD 82.24 Billion |
| Market Size in 2024 | USD 87.51 Billion |
| Market Growth Rate from 2024 to 2033 | CAGR of 6.41% |
| Largest Market | North America |
| Base Year | 2023 |
| Forecast Period | 2024 to 2033 |
| Segments Covered | Component, End-user, and Regions |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
AI in IoT Market Dynamics
Drivers:
Major drivers include the need for predictive maintenance and operational efficiency, demand for intelligent automation in smart cities and homes, advancements in cloud computing and edge computing technologies, and increasing connectivity through 5G networks facilitating IoT device proliferation.
Opportunities:
Opportunities in the AI in IoT market include expanding applications in sectors like healthcare for remote patient monitoring and personalized medicine, smart transportation for traffic management and autonomous vehicles, and industrial IoT for optimizing supply chains and manufacturing processes. Additionally, the integration of AI with IoT opens doors for innovative business models and services.
Challenges:
Key challenges include concerns over data privacy and security, interoperability issues among diverse IoT devices and platforms, high initial costs of implementing AI and IoT solutions, and the need for skilled professionals capable of managing and optimizing complex AI-driven IoT ecosystems.
Read Also: AI in Asset Management Market Size to Reach USD 33.25 Bn by 2033
AI in IoT Market Companies
- Google LLC
- SAP SE
- PTC Inc.
- Salesforce, Inc.
- Hitachi Ltd.
- Softweb Solutions Inc.
- Amazon Web Services Inc.
- IBM Corporation
- SAS Institute Inc.
- Oracle Corporation
- Other Key Players
Recent Developments
- In March 2024, Accenture launched the Accenture LearnVantage service to assist clients with a comprehensive technology learning and training service and achieve greater business value with the help of AI-based IoT systems.
- In January 2024, Vodafone and Microsoft signed a ten-year strategic partnership to develop AI-based IoT and other digital services as Vodafone has tried to scale its new standalone IoT business with Microsoft.
- In March 2023, Accenture announced its acquisition of Flutura, a provider of data science and IoT services. This strategic move aims to bolster Accenture’s industrial AI services under its Applied Intelligence brand.
- In April 2022, Synaptic launched its edge AI evaluation kit (EVK), which utilizes the capabilities of its Katana system-on-a-chip (SoC) by building a human recognition, sound, and motion detection system for improving biometrics and other AI applications at the edge of the networks. Within this technology, the company is addressing different problems, such as power consumption and size constraints for edge semiconductors.
- In April 2022, Gupshup acquired Active.Ai, a startup that provides conversational AI to fintech firms and banks in all-cash transactions. The acquisition may enable Gupshup to offer better customer experience solutions for the BFSI market.
Segments Covered in the Report
By Component
- Platform
- Services
- Software
By End-user
- Banking, Financial Services, & Insurance
- IT And Telecommunication
- Energy & Utilities
- Healthcare Sector
- Manufacturing Industry
By Geography
- North America
- Asia Pacific
- Europe
- Latin America
- Middle East & Africa
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