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AI as a Service (AIaaS) market is set to reach US$ 43.29 BN by 2030, growing at a 25.8% CAGR between years 2021-2030. The use of cloud based AI services is increasing day by day because many organizations recognize the significance of AI in their daily activities. People like to use the cloud-based AI model since it's very easy to access and they can use it to adopt AI technology. The demand for low-cost and scalable AI systems market is increasing, resulting in market growth. In my opinion, AIaaS is really a good option for companies of all sizes, because, it's more accessible and affordable, allowing organizations to easily integrate AI into their operations.
It offers sophisticated machine learning algorithms with no need for expensive infrastructure or specialized knowledge, making it easily accessible for students like us. Additionally, there is an increasing number of AIaaS service providers in the market including major tech companies and smaller companies which makes it more competitive. This diversity of culture offers various products and services that a company can choose from based on their choice.
The competition is encouraging innovation, with companies always trying to improve their services to stay ahead of it. This competitive situation provisions that technology is advancing at a faster pace and there are fewer costs of doing this technology for a company increasing affordability making AIaaS for more Appropriate businesses. The ability to work together and connect different systems is really important in deciding how well AIaaS will do in the market. While the use of AI technology is growing, it is important for these systems to be able to match existing technology. These days, providers that offer out-of-the-box solutions are preferred because their solutions can easily integrate with other systems.
This is because using a variety of different AI systems in one place helps companies make more informed decisions. Nowadays, the most important factor when choosing an AIaaS provider is how well it can adapt to different data sources and applications. This ability to be flexible in integrating with various data sources and applications is what sets apart AIaaS providers. Security considerations are a set of aspects that heavily impact the movement of AIaaS in the market.
AI as a Service Market Highlights:
Artificial Intelligence as a Service Market Overview
The AI as a Service (AIaaS) Market size is projected to grow from USD 13.46 billion in 2024 to USD 123.6 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 31.9% during the forecast period (2024 - 2032). Additionally, the market size for AI as a Service (AIaaS) was valued at USD 10.20 billion in 2023.
Continuous advancements in the field of artificial intelligence accounts for increasing investments into R&D by major players and increasing the growth of artificial intelligence.
Figure 1: AI as a Service Market Size, 2022-2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Artificial Intelligence as a Service Market Covid 19 Analysis
Due to the current situation of coronavirus the small, medium, and large businesses are affected. Due to the complete shutdown manufacturing units were drastically affected by Artificial intelligence as a service market. Lack of workers and government policies dragged the market down during the year 2020. Things are expected to get back to normal by next year, and that’s when the market will start flourishing like before.
AI as a Service Market Dynamics
Drivers:
The factors that have majorly contributed to artificial intelligence as a service industry are the continuous advancements that are made in the field of artificial intelligence in today's time, increasing investments into R&D by all the major key players.
Opportunities:
Some of the factors that act as opportunities include the popularity among enterprises across industries, availability of a good number of vendors that are offering artificial intelligence as a service at affordable prices. The sales of Artificial intelligence as a service market boosted the adoption of the services and also boosted the growth of artificial intelligence as a market industry. These are some of the factors that boost the opportunities of artificial intelligence as a service market. Also, the availability of a good number of vendors offering Artificial Intelligence as a Service at affordable prices is the best adoption of these services, thus boosting the growth of this market.
Restraints:
The factors that hinder the growth of artificial intelligence as a service industry include the high initial cost that is associated with the adoption of artificial intelligence. The overall regulatory framework of artificial intelligence as a service market is exhausting as well as costly when covered to offer stakeholders a better understanding.
Value Chain Analysis
There are various benefits of artificial intelligence. Some of the factors include complete reliability over robots, cost-free human labor, highly knowledgeable robots, emotion sensors, and child care robots, etc. In addition to this, increasing its popularity among enterprises across the industry is the value for benefit. However, high initial costs required for adapting artificial intelligence had, for a long, been hindering its adoption among enterprises with low budgets.
Market Segmentation
Artificial intelligence as a service market is segmented based on type, based on enterprise size, based on and user industry, based on Technology, based on organization size, and based on geography.
Based on the Type
The artificial intelligence as a service market is divided based on type into bots and digital assistance, cognitive computing APIs, machine learning frameworks, and fully managed machine learning services.
Based on the Enterprise
Based on enterprise the global artificial intelligence service market is divided into small, medium, and large.
Based on the End-User
The global artificial intelligence market is classified based on the end-user into BFSI, retail, communication and technology, healthcare, manufacturing, and others.
Based on the Geography
Based on the region/geography, the artificial intelligence service market has been segmented into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.
Based on the Technology
Based on Technology, the Global artificial intelligence as a service market is classified into machine learning, computer vision, natural language processing, and others.
Based on the Organization Size
Based on the organization size the artificial intelligence as a service market is divided into small, medium, and large enterprises.
Artificial Intelligence as a Service Market Regional Analysis
The artificial intelligence service market has been segmented into various regions including- South America, Europe, the Middle East and Africa, and the Asia Pacific.
North America is the leading market of artificial intelligence as a service market which is followed by other regions such as Europe and the Asia Pacific. North America due to its early adoption of advanced technologies such as artificial intelligence has developed and contributed to the largest artificial intelligence as a service market share. Other factors for its large artificial intelligence as a service market size include advanced infrastructure, developed network technologies, and high technical skills.
The Asia Pacific is projected to grow with the highest cagr during the forecasted period. The countries of China, Japan, and South Korea are the leading innovators in artificial intelligence in the region. The countries of China and South Korea heavily invest in developing automation technologies for industries which is one of the prime factors that drive the growth and adoption of artificial intelligence in these countries.
Competitive Landscape
The prominent key players of the Artificial intelligence as a service market in the global market are mentioned down below-
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Alphabet INC (Google inc.)
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Apple Inc
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Amazon
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Cognitivescale, Inc.
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Microsoft corporation
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Intel, Inc.
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Salesforce, Inc.
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Fair Isaac corporation
All these prominent key players play a major road in the dynamics and growth of Artificial intelligence as a service market. These major key players opt for many strategies and policies to widen their customer base. These policies and strategies mainly include collaborations, mergers, acquisitions, extensions, joint ventures, establishments, new production processes, innovations, technology widening the existing products, partnerships, etc. All these important methods are opted to get the needs of customers and develop a strong potential growth base.
Recent Developments
February 14, 2024: IBM announced a new suite of AIaaS offerings focused on automation. This includes tools for streamlining workflows, improving decision-making, and enhancing customer experiences. This highlights the growing trend of AI being used for practical business applications.
January 25, 2024: The World Economic Forum published a report on the responsible use of AI in business. This report emphasizes the importance of ethical considerations and transparency in developing and deploying AIaaS solutions.
Google released a free artificial intelligence program on Thursday, February 20, 2024, allowing individuals to rely on technology rather than their own minds to write, comprehend what they read, and handle a range of other tasks in their life. Google is planning to replace the Bard chatbot it introduced a year ago with ChatGPT, the chatbot released by Microsoft-backed startup OpenAI in late 2022. The Gemini app is called after an AI project that was unveiled late last year. Google is launching the standalone Gemini app for Android-powered smartphones right now.
By 2023, Capgemini has observed an increase in client demand and focus on generative AI in recent months. In light of this, the Group is introducing a generative AI portfolio of services today that includes everything from strategy formulation to the actual creation and large-scale use of generative AI.
Given below are some developments seen in the Artificial Intelligence as a Service market in recent times-
Digital installations are made for different purposes for initial installation that involve low risk.
Developments are made in such a way that it enables people and organizations to explore different avenues for different purposes.
Innovation in such a way made services provide a full suite to support a large scale AI solution such as smart vendors, software firms, consultants, or professional service firms, offering or partnering with firms that can offer set services.
Developments by companies such as Google, IBM, Microsoft, and many other key players have actively implemented artificial intelligence services as an important part of their technologies.
Developments are made to expand teachers on the adoption of artificial intelligence and technological advancements so that workflow optimization can increase the demand for all the advanced systems in the market.
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