AI in Chemicals Market Research Report Information By Component (Hardware (Accelerators, Processors, Memory, Network), Software, and Services (Professional Services, Managed Services)), By Business Application (R&D, Production, Supply Chain Management, and Strategy Management), By End User (Basic Chemicals, Advance Materials, Active Ingredients, Green & Biochemicals, Paints & Coatings, Adhesives & Sealants, Water Treatment & Services, and Other) & By Region (North America, Europe, Asia-Pacific & Rest of The World) –Market Forecast Till 2032

AI in Chemicals Market Overview

The AI in Chemicals Market size is projected to grow from USD 1.1 billion in 2024 to USD 17.06 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 40.50% during the forecast period (2024 - 2032). Additionally, the market size for AI in Chemicals was valued at USD 0.8 billion in 2023.

The growing need for reliable and efficient manufacturing processes, coupled with the adoption of advanced digital techniques in the chemical industry, increasing emphasis on improved batch production scheduling, and heightened awareness of AI solutions, are expected to be significant market drivers for AI in chemicals market.

Figure1: AI in Chemicals Market, 2018 - 2032 (USD Billion)

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

AI in Chemicals Market Trends

Market CAGR for AI in Chemicals is driven by the growing demand of Al for research & development and design and development of new products. The growing focus on research and development within the chemical and materials sector is driving increased demand for AI technologies. In Canada, there were over 140,000 actively engaged AI professionals in 2022-23, marking a 29% increase from the previous year. Canada also boasts 10% of the world’s leading AI researchers, ranking second globally. Prime Minister Justin Trudeau announced a $2.4 billion initiative in 2024, part of Budget 2024, aimed at securing Canada’s leadership in AI. The Canadian AI sector attracted over $8.6 billion in venture capital in 2022, representing nearly 30% of all venture capital activity in the country.

According to IBM, 25% of respondents in 2022 utilized multi-cloud platforms to leverage various application services such as AI/ML, big data analytics, business intelligence, and IoT. AI solutions play a crucial role in accelerating and refining the R&D process within the chemical and materials sectors. Machine learning tools rapidly identify molecules, formulate precise chemical compositions, and predict their effectiveness. Integration of AI enables companies to forecast environmental impacts, supporting sustainability efforts by promoting eco-friendly alternatives. Automation of experiments enhances efficiency, accuracy, and safety protocols, leading to significant time and resource savings.

Cloud-based platforms facilitate collaboration and automation, ushering in a new era of enhanced efficiency and adaptability. Studies indicate potential cost reductions in R&D ranging from 30% to 50%, a fivefold increase in experiment throughput, and up to a 30% reduction in laboratory workforce through automation. These tangible benefits underscore the pivotal role of AI in shaping the future landscape of chemical and materials research, driving efficiency, sustainability, and innovation.

AI accelerates innovation across process and product development stages. By employing machine learning and advanced analytics algorithms with historical data, the chemical industry can precisely estimate costs and performance. Various sectors within the chemical industry utilize tailored mathematical algorithms and models to optimize chemical combinations, predict catalyst aging, and assess complex dye solubility. For example, companies like Novartis deploy robots to transfer chemical compounds into multi-well plates, enabling continuous laboratory testing of products and substances around the clock. This approach accelerates the drug discovery and development process significantly.

As a result, it is anticipated that throughout the projection period, demand for the AI in Chemicals Market will increase. Thus, driving the AI in Chemicals Market revenue.

AI in Chemicals Market Segment Insights

AI in Chemicals Market Components Insights

The AI in Chemicals Market segmentation, based on Components, includes Hardware (Accelerators, Processors, Memory, Network), Software, and Services (Professional Services, Managed Services). The Software segment dominated the market, accounting for 58% of market revenue. The increasing use of this software in drug research and development, driven by the demand for better data storage, management, evaluation, and sharing, has led to its dominance in the segment. Additionally, the software generates various revenue streams for market players, making it a significant sales factor for AI in the global chemical market. For example, MATLAB is a leading software product for data plotting and numerical calculations in chemical engineering.

AI in Chemicals Market Business Application Insights

The AI in Chemicals Market segmentation, based on Business Application, includes R&D, Production, Supply Chain Management, and Strategy Management. The Production segment dominated the market, accounting for 58% of market revenue. AI's capability to analyze vast datasets enables companies to quickly adapt to changing market demands, minimize inventory losses, and optimize their product offerings. Additionally, AI technologies are crucial in promoting environmental sustainability by reducing waste and energy consumption. As more organizations recognize the potential benefits of integrating AI, the chemical industry is poised for further advancements.

Figure 2: AI in Chemicals Market, by Business Application, 2023 & 2032 (USD Billion)

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

AI in Chemicals Market End User Insights

The AI in Chemicals Market segmentation, based on End Users includes Basic Chemicals, Advance Materials, Active Ingredients, Green & Biochemicals, Paints & Coatings, Adhesives & Sealants, Water Treatment & Services, and Other End Users. The Active Ingredients segment dominated the market, accounting for 60% of market revenue. In the agrochemical industry, AI algorithms analyze agricultural data to create novel pesticides and herbicides with enhanced efficacy and environmental safety. In the personal care and household chemicals industries, AI aids in formulating skincare products, cosmetics, and cleaning agents with optimized concentrations of active ingredients, stability, and performance. Additionally, AI-driven predictive modeling and simulation enable manufacturers to forecast market demand, customize formulations based on consumer preferences, and optimize production processes for greater efficiency and cost-effectiveness.

AI in Chemicals Market Regional Insights

By region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. North America is projected to hold the largest share of AI in Chemicals market in the coming years due to increased awareness of digitization approaches and higher R&D funding by chemical firms aimed at advancing overall production processes. For instance, in 2019, the U.S. President launched the American AI Project, which serves as the nation's strategy for enhancing leadership in artificial intelligence. This initiative has involved government agencies in fostering public trust in AI-based processes by offering guidance for their advancement and practical application across various sectors. According to Crunchbase, over 25% of investments in American startups were directed toward AI-related companies in 2023, compared to approximately 12% of total funding between 2018 and 2022.

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

Figure 3: AI IN CHEMICALS MARKET SHARE BY REGION 2023 (USD Billion)

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

Europe AI in Chemicals Market accounts for the second-largest market share due to increased government funding, strategic plans to establish new chemical industries, and a favorable regulatory environment. As the world's second-largest producer of chemicals, Europe's sold production of chemicals rose from €537 billion in 2011 to €872 billion in 2022, with inorganic chemicals experiencing the strongest growth among different chemical groups during this period. Additionally, EU chemical imports grew by 33% and exports by 21% between 2021 and 2022. Further, German AI in Chemicals Market held the largest market share, and UK AI in Chemicals Market was the fastest-growing market in the European region

The Asia-Pacific AI in Chemicals Market is expected to grow at the fastest CAGR from 2024 to 2032. The chemical industry in APAC is characterized by its extensive diversity, encompassing a broad spectrum of chemicals ranging from petrochemicals to specialty chemicals. This diversity underscores the necessity for AI solutions to tackle diverse challenges and enhance efficiency across various production processes. India, ranked as the 6th largest global producer and 3rd in Asia, contributes significantly to its GDP with the chemicals sector alone valued at approximately $215 billion, projected to reach $300 billion by 2025. In terms of exports, chemicals and chemical products (excluding pharmaceuticals and fertilizers) constituted 11.7% of total exports in 2021-22, slightly declining to 10.8% by September 2022.

The Interim Union Budget for 2024-25 allocated Rs. 192.21 crore (US$ 23.13 million) to the Department of Chemicals and Petrochemicals, highlighting governmental support for the sector's growth and innovation. Moreover, China’s AI in Chemicals Market held the largest market share, and the Indian AI in Chemicals Market was the fastest-growing market in the Asia-Pacific region.

AI in Chemicals Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development to expand their product lines, which will help the AI in Chemicals 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 Chemicals 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 Chemicals industry to benefit clients and increase the market sector. In recent years, the AI in Chemicals industry has offered some of the most significant advantages to the efficiency, innovation, and sustainability of production processes. Major players in the AI in Chemicals Market, including IBM (US), Schneider Electric (France), Google (US), Microsoft (US), SAP (Germany), AWS (US), NVIDIA (US), C3.ai (US), GE Vernova (US), Siemens (Germany) are attempting to increase market demand by investing in research and development operations.

Google LLC (Google), a subsidiary of Alphabet Inc., is a prominent provider of Internet search and advertising services. The company operates in several business segments, including advertising, search, platforms and operating systems, enterprise solutions, and hardware products. Its extensive portfolio features a range of products and services such as Google Search, Google Chrome, Google Docs, Google Calendar, Google Drive, Google Photos, Google Meet, Google Finance, Google News, Google Play Books, Google Earth, Google Ad Manager, Google Play, AdMob, Google Maps, AdSense, Gmail, Google Groups, and YouTube.

Google maintains a global business presence spanning the Americas, Europe, Asia-Pacific, Africa, and the Middle East, with its headquarters located in Mountain View, California, USA. In May 2023, Google Cloud introduced two new AI-powered solutions tailored for life sciences to expedite drug discovery and precision medicine initiatives among biotech companies, pharmaceutical firms, and public sector organizations. The Target and Lead Identification Suite supports researchers in identifying amino acid functions and predicting protein structures, while the Multiomics Suite accelerates the discovery and interpretation of genomic data, facilitating the development of precise treatments.

Siemens AG (Siemens) is a technology company known for its operations in electrification, automation, and digitalization. The company designs, develops, manufactures, and installs complex systems and projects, offering tailored solutions to meet specific customer needs. Siemens focuses on power generation and distribution, intelligent infrastructure for buildings, and distributed energy systems. It also provides smart mobility solutions for rail and road transport, medical technology, and digital healthcare services. With a global presence that includes research and development facilities, production plants, warehouses, and sales offices worldwide, Siemens serves customers across diverse industries such as energy, healthcare, infrastructure, manufacturing, and more

Headquartered in Munich, Bavaria, Germany, Siemens collaborates with the chemical industry on initiatives like the Together for Sustainability program. In May 2023, Siemens partnered with the chemical sector on a pilot project aimed at reducing carbon emissions within the supply chain. This collaboration involves 47 chemical companies adopting Siemens' "Sigreen" solution to digitally exchange Product Carbon Footprint (PCF) data.

Key companies in the AI in Chemicals Market include

• IBM (US)


• Schneider Electric (France)


• Google (US)


• Microsoft (US)


• SAP (Germany)


• AWS (US)


• NVIDIA (US)


• ai (US)


• GE Vernova (US)


• Siemens (Germany)

AI in Chemicals Industry Developments

November 2023: GE Vernova's Gas Power division announced a partnership with Duke Energy to develop the nation's inaugural 100% green hydrogen-powered peaking power plant. The collaboration aims to establish a comprehensive green hydrogen system at Duke Energy's DeBary plant in Volusia County, Florida, near Orlando.

October 2023: NobleAl, renowned for its science-based AI solutions in chemical and material informatics, teamed up with Azure Quantum Elements (AQE), a Microsoft cloud service that combines high-performance computing (HPC), AI, and quantum computing. This collaboration integrates AQE's advanced molecular simulation and HPC capabilities with NobleAl's AI-driven solutions.

AI in Chemicals Market Segmentation

AI in Chemicals Market Component Outlook

• Hardware
  
  
  
  • Accelerators
  
  
  • Processors
  
  
  • Memory
  
  
  • Network
  
  
  
  


• Software


• Services
  
  
  
  • Professional Services
  
  
  • Managed Services
  
  
  
  

AI in Chemicals Market Business Application Outlook

• R&D


• Production


• Supply Chain Management


• Strategy Management

AI in Chemicals Market End User Outlook

• Basic Chemicals


• Advance Materials


• Active Ingredients


• Green & Biochemicals


• Paints & Coatings


• Adhesives & Sealants


• Water Treatment & Services


• Other End Users

AI in Chemicals Market Regional Outlook

• 
  

  North America

  
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• 
  

  Europe

  
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  

• 
  

  Asia-Pacific

  
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Rest of Asia-Pacific
  
  
  
  


• 
  

  Rest of the World

  
  
  
  
  • Middle East
  
  
  • Africa