Data Annotation Tools Global Market Report 2024

The global data annotation tools market has grown exponentially in recent years. It will grow from $1.83 billion in 2023 to $2.37 billion in 2024 at a compound annual growth rate (CAGR) of 29.4%. The growth observed in the historical period can be attributed to the increased demand for annotated data, the necessity for high-quality labeled data, regulatory compliance requirements, advancements in autonomous vehicle development, a dedicated focus on data quality and accuracy, and the global expansion of smart agriculture.

The global data annotation tools market is expected to see exponential growth in the next few years. It will grow to $6.74 billion in 2028 at a compound annual growth rate (CAGR) of 29.8%. Anticipated growth in the forecast period can be attributed to advancements in annotation automation, a rising adoption of federated learning, an emphasis on active learning techniques, improved tools for handling 3D data, the development of annotation tools for multimodal data, and a focus on cost-effective annotation solutions. Major trends expected in the forecast period include a growing emphasis on computer vision, the outsourcing of data annotation services, a shift toward semi-supervised and self-supervised learning, the utilization of crowdsourcing for large-scale annotation projects, and the integration of collaboration features in annotation platforms.

The growth of the data annotation tools market is anticipated to be propelled by the increasing prominence of big data. Big data, characterized by its diverse and large-scale information, plays a pivotal role in data annotation for machine learning processes. The metrics employed in these processes involve the storage, analysis, and management of substantial volumes of data. According to a report by the World Economic Forum, it is estimated that by 2025, a staggering 463 exabytes of massive data, equivalent to 212.77 million DVDs per day, will be generated globally. This surge in big data usage is poised to drive the growth of the data annotation tools market.

The growth of the data annotation tools market is set to be propelled by the increasing internet penetration in both rural and urban areas. The surge in internet utilization has led to a higher demand for data annotation tools, driven by the escalating volume of data available for analysis. This trend is a direct outcome of the widespread integration of AI and machine learning technologies across various sectors, underscoring the pivotal role of data annotation in training and enhancing these technologies. According to DataReportal, 5.07 billion people worldwide, or 63.5% of the global population, use the internet. In India, there were 692 million active internet users as of July 2022, with an estimated projection of 900 million internet users by 2025. The increasing internet penetration acts as a significant driver for the data annotation tools market.

A key trend gaining traction in the data annotation tools market is technological advancement. Major market players are dedicating efforts to creating innovative technologies for storing and managing bulk data, exemplified by the introduction of mobile 3D point cloud data labeling. In June 2021, ByteBridge, a China-based company specializing in data labeling services, launched the world's first mobile-based 3D point cloud data labeling service. This service caters to the growing need for advanced data annotation tools, especially in applications involving 3D point cloud data generated by sensors like LiDAR. Technological innovation remains a significant factor shaping the landscape of the data annotation tools market.

Major companies in the data annotation tools market are increasingly emphasizing strategic partnerships and collaborations as a means to enhance their financial strength, fortify their product portfolios, and broaden their global presence. A strategic partnership or collaboration involves a formal alliance where two or more organizations combine their resources, expertise, and capabilities to achieve mutually advantageous objectives. As an illustration, in November 2022, TechSee, an Israel-based company specializing in AI-powered service automation and visual engagement technologies, announced a strategic partnership with TELUS International, a Canada-based digital customer experience innovator. This collaboration is geared towards introducing live computer vision capabilities to engagement centers, enriching TELUS International's technology stack. Through this partnership, TechSee's suite of AI-powered service automation and visual engagement products will be integrated into TELUS International's customer offerings. The collaboration is anticipated to drive innovation and enhance profitability for TELUS International's clients, ultimately facilitating the delivery of superior customer experiences.

In March 2021, TELUS International, a Canada-based technology company, completed the acquisition of Lionbridge AI for an undisclosed amount. This strategic move bolsters TELUS International's presence in the rapidly expanding new economy services market, empowering its team to support critical AI applications amid the growing demand for high-quality, multilingual data annotation. Lionbridge AI, based in the United States, is a provider of scalable data annotation services for text, images, videos, and audio. The acquisition further positions TELUS International as a key player in meeting the evolving needs of the data annotation tools market.

Major companies operating in the data annotation tools market report are Annotate.com, Appen Limited, CloudApp, Cogito Tech LLC, Deep Systems, iMerit Technology Services Pvt. Ltd., Samasource Inc., Lionbridge Technologies Inc., Clickworker GmbH, CloudFactory Limited, Scale Inc., Amazon Web Services Inc., Playment Inc., Labelbox Inc., Neurala Inc., Webtunix AI, Hive CloudApp Inc., TagX, Anolytics, LightTag, Alegion Inc., DefinedCrowd Corporation, Edgecase AI, V7 Labs, Supervisely OÜ, Dataloop AI.

Asia Pacific was the largest region in the data annotation tools market in 2023. North America is expected to be the fastest-growing region in the data annotation tools market report forecast period. The regions covered in the data annotation tools market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the data annotation tools market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary types of data annotation tools include text, image or video, and audio annotation. Text annotation involves tagging various sentiments in text, such as angry or sarcastic, to train the machine in recognizing human intent or emotion behind words in specific applications. These tools employ various supervised, semi-supervised, and automatic technologies and find applications in diverse verticals, including IT, automotive, government, healthcare, financial services, retail, and other industries.

This report provides data annotation tools market statistics, including data annotation tools industry global market size, regional shares, competitors with a data annotation tools market share, detailed data annotation tools market segments, market trends and opportunities, and any further data you may need to thrive in the data annotation tools industry. This data annotation tools market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The data annotation tools market consists of revenues earned by entities by providing data annotation services such as voice activity detection, speaker identification, automated speech, content moderation, data labelling services, and others. The data annotation market also includes sales of macOS, Windows, Linux, bounding boxes, and other types that are used in providing data annotation. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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