Artificial Intelligence As A Service (AIaaS) Market Size, Share, Opportunities, And Trends By Type (Bots, APIs, Machine Learning, Others), By Enterprise Size (Small, Medium, Large), By End-User Industry (BFSI, Retail, IT And Telecom, Healthcare, Manufacturing, Government, Energy, Others) And Geography - Forecasts From 2024 To 2029

The Artificial Intelligence as a Service (AIaaS) market is projected to witness a CAGR of 46.52% during the forecast period to reach a total market size of US$168.449 billion by 2029, up from US$24.947 billion in 2024.

Artificial Intelligence as a Service (AIaaS) is being utilized as a low-cost, cloud-based way to empower businesses to use artificial intelligence (AI) algorithms and employ artificial neural systems without requiring infrastructure or tremendous startup ventures. AIaaS has different components that numerous businesses utilize, like cloud-based conveyance, pay-as-you-go pricing, and versatility with no limitations on infrastructure companies to focus on its core capacities.

AIaaS administrations include machine learning stages, natural language processing administrations, computer vision services, AI chatbots, and virtual colleagues. They permit machines to understand and produce human dialects, decipher visual data, and assist clients. Ceaseless progressions in the field of AI, on account of major players expanding ventures into R&D, have been expanding their popularity among endeavors over businesses.

Moreover, the high initial costs of implementing AI have hindered its adoption among businesses. However, AIaaS has reduced these costs by eliminating the need to build an AI infrastructure, which is expected to drive market growth in the forecasted period.

What are the artificial intelligence as a Service (AIaaS) market growth drivers?

• Growing adoption of cloud computing is expected to increase the demand for Artificial Intelligence as a Service (AIaaS) solutions globally.

One of the major factors anticipated to drive the Artificial Intelligence as a Service market’s growth during the forecast period is the shift of a large number of organizations to cloud computing. Cloud computing allows companies to use artificial intelligence without the need to set up an AI infrastructure, saving them cost and time. It allows the companies to focus completely on their core business, as AI as a service is provided by third parties, which is leading to rising demand for AIaaS and propelling its market growth in the coming years.

For instance, in June 2022, e& Enterprise, a division of e& Group Limited, collaborated with DataRobot to introduce an industry-first Enterprise AlaaS solution for public and private companies looking to accelerate their digital transformation. It provides an end-to-end cloud solution that allows building, training, deployment, and managing AI & ML solutions at a fraction of the cost of in-house. Further, allowing governments and private companies to deploy AI fixes at scale and realize business value with minimal upfront AI expertise. Similarly, there are more companies are adopting cloud computing to upgrade their businesses, which is anticipated to boost the market growth during the assessment period.

• The increasing investments in artificial intelligence are anticipated to drive market growth.

The field of artificial intelligence has been attracting huge investments in recent times by various end-user industries. For instance, the World Economic Forum reported that the investment by companies in AI for manufacturing is predicted to rise by 57% by 2026, accounting for a growth from $1.1 billion in 2020 to a value of $16.7 billion in 2026. This represents a major upsurge in which machines will act intelligently and carry out complex functions that are similar to the human mind's workings. Besides ramping up revenue and trimming expenses, it could also decrease the risk of exposure and revolutionize the manufacturing industry. This will promote the utilization of AIaaS in advancing AI technology, fuelling market expansion.

Countries like China, the United Kingdom, and the United States are spending huge amounts on AI. The technological companies are also investing in AI-related solutions. For instance, a Microsoft report anticipated that the employment of the GenAI tool could save the UK public sector £17bn by 2035, though even just a five-year delay in adoption would lead to a loss in its economy by up to £150bn.

Furthermore, the governments of various countries are passing policies for the development of AI in their respective countries. For instance, the Chinese government has passed policies like the "National New Generation AI Plan," which focuses on becoming the primary hub for new AI innovations by 2030, and many other supporting objectives for the country and industry improvement, leading to increased investments in AI. The increased investment in AI is driving the adoption of Artificial Intelligence as a Service, which is expected to fuel market expansion in the forecast period.

What are the key geographical trends shaping the artificial intelligence as a Service (AIaaS) market?

• The North American region is expected to hold a substantial Artificial Intelligence as a Service (AIaaS) market share.

The North American region is anticipated to hold a significant market share owing to the presence of market leaders such as Microsoft Corporation, Amazon Web Services, Google LLC, and IBM Corporation, among others. Further, the region has a strong industry player presence, leading to increasing technological advancements. Hence, there will be a higher tendency to adopt technologies like AIaaS for diverse industries in the coming years.

In addition, North American countries like the United States and Canada are anticipated to witness substantial growth during the forecast period due to rising investments in cloud-based solutions and an emerging sector realizing the utilization of AlaaS for multiple applications. Furthermore, the rising number of start-ups in the region providing AIaaS solutions is anticipated to propel the market growth during the forecast period.

Recent developments in the artificial intelligence as a Service (AIaaS) market

• July 2023 – ElevateAI, an offering of NICE, launched the "1K Every Day" program, which lets brands and organizations have 1,000 daily interactions with their CX AI models and free AI-based transcription services. The initiative, which expands NICE's on-demand AI services, makes the power of purpose-built Enlighten AI available to organizations of all sizes.
• September 2022 – OrionVM, an IaaS Provider, partnered with Blaize, an AI computing innovator, to build an AIaaS offering. The partnership is designed to simplify IT by delivering AI solutions that federate machine learning workloads with high-performance storage on large datasets. Blaize AI applications based on new OrionVM-developed hardware and software are going to help Blaize sales teams globally, along with both partners selling the combined solution.

Artificial Intelligence As A Service (AIaaS) Market Scope:

Market Segmentation:

The Artificial Intelligence as a Service (AIaaS) market is segmented and analyzed as below:

• By Type
  • Bots
  • APIs
  • Machine Learning
  • Others
• By Enterprise Size
  • Small
  • Medium
  • Large
• By End-Use Industry
  • BFSI
  • Retail
  • IT and Telecom
  • Healthcare
  • Manufacturing
  • Government
  • Energy
  • Others
• By Geography
  • North America
    • USA
    • Canada              
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Others
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Taiwan
    • Thailand
    • Indonesia
    • Others