AI in IoT Market Analysis

• The pressing need for real-time analysis and monitoring of vast amounts of data is driving the market growth

The urgent requirement for real-time analysis and monitoring of enormous volumes of data is one of the major factors driving the global Al in loT market. Customers and consumers want a distinctive experience, which is something that vendors in the Al in loT industry are anticipated to capitalise on. High demand for Al solutions in lot-related processes and devices is anticipated as a result. A staggering amount of data is coming in from IoT devices to both large and small businesses.

Another important element fueling the expansion of the worldwide Al in lot market in the coming years is the requirement to lower maintenance costs in these processes.

The Internet of Things (IoT) and artificial intelligence (AI) have the ability to completely change various economic sectors. Intelligent technologies that replicate intelligent behaviour and support decision-making with little to no human participation are produced by the Internet of Things (IoT) powered by AI. Artificial intelligence powered by the Internet of Things provides businesses and consumers with a number of advantages, including proactive intervention, individualised experiences, and intelligent automation.

IoT technology is crucial for different organisations to undergo a digital transformation since it gives them the ability to improve current operations by developing and monitoring new business models. IoT has been viewed by businesses and service providers as a significant enabler for accelerating digital transformation and unlocking operational efficiency. IoT usage is rising as more businesses see it as crucial to their ability to succeed. The development of the global artificial intelligence sector has been significantly boosted in recent years by the increasing usage of digital technology and the internet.

Technology advancements in a variety of industries are constantly fueled by the large R&D investments made by tech companies. 

As an illustration, in June 2022, Viettel Group and NVIDIA signed a memorandum of understanding (MoU) to establish a strategic partnership to advance artificial intelligence (AI)-based technology research and solutions for Viettel and Vietnam. Viettel and NVIDIA would collaborate to hasten the development and use of Viettel's AI solutions in computer vision, robotics, natural language processing, digital twins, and other areas by using NVIDIA's high-performance computing systems and ecosystems. Thus, driving the AI in IoT market revenue.

The Global AI in IoT Market Industry is significantly influenced by the expansion of smart cities worldwide. Urban areas are increasingly adopting IoT technologies to improve infrastructure, enhance public services, and promote sustainability. AI plays a pivotal role in analyzing data collected from various sensors, enabling city planners to make informed decisions. For example, AI algorithms can optimize traffic flow, reducing congestion and emissions. As governments invest in smart city initiatives, the demand for AI-integrated IoT solutions is expected to surge, contributing to the market's growth trajectory. This trend aligns with the broader vision of creating efficient, livable urban environments.

The Global AI in IoT Market Industry is poised for substantial growth, with projections indicating a market value of 10.6 USD Billion in 2024 and an anticipated increase to 163.6 USD Billion by 2035. This remarkable growth trajectory reflects a compound annual growth rate of 28.23% from 2025 to 2035. The increasing integration of AI technologies into IoT applications across various sectors is likely to drive this expansion. As organizations recognize the potential of AI to enhance operational efficiency and decision-making, investments in AI-driven IoT solutions are expected to surge, shaping the future landscape of the industry.

In the context of the Global AI in IoT Market Industry, the growing need for data security is becoming increasingly critical. As IoT devices proliferate, concerns regarding data breaches and cyber threats are rising. AI technologies are being integrated into IoT systems to enhance security measures, employing advanced analytics to detect anomalies and respond to threats in real-time. For instance, AI-driven security solutions can identify unusual patterns in network traffic, thereby preventing potential attacks. This focus on security is likely to drive investment in AI-enhanced IoT solutions, ensuring the protection of sensitive data and fostering consumer trust.

The Global AI in IoT Market Industry experiences heightened demand for automation across various sectors, including manufacturing, healthcare, and transportation. Organizations are increasingly adopting AI-driven IoT solutions to streamline operations, reduce costs, and enhance productivity. For example, smart factories utilize AI algorithms to optimize production processes, leading to significant efficiency gains. This shift towards automation is anticipated to be a key driver of market growth, with projections indicating a rise to 163.6 USD Billion by 2035. The continuous push for operational efficiency suggests that AI in IoT will play a crucial role in shaping the future of industrial automation.

The Global AI in IoT Market Industry is propelled by rapid technological advancements in artificial intelligence and Internet of Things. Innovations in machine learning algorithms and data analytics are enhancing the capabilities of IoT devices, enabling them to process vast amounts of data in real-time. For instance, smart home devices now utilize AI to learn user preferences, improving energy efficiency and user experience. This trend is expected to contribute significantly to the market, which is projected to reach 10.6 USD Billion in 2024. As technology continues to evolve, the integration of AI in IoT applications is likely to expand, driving further growth.

Consumer awareness regarding the benefits of AI in IoT is on the rise, driving adoption across various demographics. The Global AI in IoT Market Industry is witnessing increased interest from consumers who seek smart home devices, wearables, and connected appliances that enhance convenience and efficiency. As consumers become more informed about the capabilities of AI-driven IoT solutions, their willingness to invest in such technologies grows. This trend is likely to contribute to the market's expansion, as evidenced by the projected compound annual growth rate of 28.23% from 2025 to 2035. The evolving consumer landscape suggests a promising future for AI in IoT.

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North America AI in IoT Market dominated this market in 2022 (45.80%). This is due to the widespread implementation of AI and IoT technologies in numerous industries, including manufacturing, retail, healthcare, automotive and transportation, and so on. This is one of the factors driving the expansion of the market under study in this area. One of the top regions for research into creating IoT and AI applications for brand-new end-user sectors is North America.

As of 2022, the United States and Canada have the greatest average per capita device and connection counts, according to Cisco. Further, the U.S. AI in IoT market held the largest market share, and the Canada AI in IoT market was the fastest growing market in the North America region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: AI IN IOT MARKET SHARE BY REGION 2022 (USD Billion)

Technologies: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe AI in IoT market accounted for the healthy market share in 2022. Due to significant government investments in the sector, the area has a great deal of potential for vendors to expand. Europe also benefits from the existence of top players, which supports the Al in loT market there. Further, the German AI in IoT market held the largest market share, and the U.K AI in IoT market was the fastest growing market in the European region

The Asia Pacific AI in IoT market is expected to register significant growth from 2023 to 2032. The market in this area is being fueled by the resources that both public and private sector organisations are allocating to the growth of this discipline. Moreover, China’s AI in IoT market held the largest market share, and the Indian AI in IoT market was the fastest growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the AI in IoT market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, AI in IoT industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global AI in IoT industry to benefit clients and increase the market sector. In recent years, the AI in IoT industry has offered some of the most significant advantages to medicine. Major players in the AI in IoT market, including Cisco Systems, Inc., Verizon, Ericsson, Sierra Wireless, Orange Business Services, Telefónica, Huawei, Moeco, Telit, and Hologram, are attempting to increase market demand by investing in research and development operations.

Microsoft Corp. (Microsoft) offers a variety of software-related services, including development, licencing, and support. The company offers a wide range of server applications, desktop and server administration tools, video games, cross-device productivity tools, business solution tools, and operating systems. It also offers training and certification services. It also develops, manufactures, and sells hardware products like PCs, tablets, game consoles, and other cutting-edge technology. 

The company offers a wide range of services, such as consultancy, cloud-based solutions, and solution support. Through original equipment manufacturers, distributors, resellers, online marketplaces, Microsoft stores, and other partner channels, Microsoft promotes, distributes, and sells its products. The company has operations throughout the Middle East, Africa, the Americas, Europe, and Asia-Pacific. Microsoft's main office is in Redmond, Washington, in the United States. Microsoft announced pre-orders for the Surface Laptop 5 and Surface Pro 9 in November 2022.

With this, the firm unveiled its vision for the next iteration of the Windows PC, one in which the PC and the cloud merge and make use of cutting-edge AI technologies to enable novel experiences.

A subsidiary of Amazon.com, Inc., Amazon Web Services Inc (AWS) offers cloud computing services. In addition to computing, storage, databases, networking, analytics, mobile, developer tools, augmented reality, virtual reality, robotics, game tech, machine learning, management tools, content delivery, media services, customer engagement, app streaming, and security, identity, and compliance, the company also provides a wide range of cloud infrastructure services. 

AWS serves a wide variety of industries, including the automotive, digital marketing, telecommunications, education, government, retail, financial services, media and entertainment, gaming, consumer packaged goods (CPG), health and life sciences, oil and gas, power and utilities, and non-profit sectors. In November 2022, AWS IoT Core announced the introduction of AWS IoT Core Device Location. Utilising location information from IoT devices, such as latitude and longitude coordinates, this new functionality enables users to track and control them.