AI as a Service Market Report 2025

The AI as a service market size has grown exponentially in recent years. It will grow from $14.03 billion in 2024 to $20.14 billion in 2025 at a compound annual growth rate (CAGR) of 43.6%. The growth in the historic period can be attributed to cloud computing advancements, data availability and volume, cost-effective solutions, algorithmic advances, industry-specific applications.

The AI as a service market size is expected to see exponential growth in the next few years. It will grow to $93.86 billion in 2029 at a compound annual growth rate (CAGR) of 46.9%. The growth in the forecast period can be attributed to AI for sustainability, ai-powered customer experience, demand for ai-driven insights, AI ethics and regulations, focus on explainable ai. Major trends in the forecast period include democratization of ai, AI integration in IoT, AI-enabled automation, augmented analytics, conversational AI expansion.

The growing adoption of artificial intelligence is anticipated to drive the expansion of the AI as a Service market in the future. Artificial intelligence involves the simulation of human cognitive functions by machines, especially computer systems. This technology allows individuals and organizations to experiment with AI for various applications while requiring a lower initial investment and minimizing risk. For example, in May 2024, Eurostat, a Belgium-based governing body, reported that in 2023, the percentage of large enterprises utilizing AI technologies rose to 30.4%, an increase from 28.4% in 2021, highlighting significant growth in AI solution adoption among these organizations. Thus, the increasing use of artificial intelligence is fueling the growth of the AI as a Service market moving forward.

The increasing adoption of cloud technology is projected to accelerate the growth of the AI as a Service market in the future. The cloud comprises a network of remote servers accessible via the Internet that are used to store, manage, and deliver data, applications, and services to users and organizations. Cloud computing is essential for AI as a Service as it offers scalable infrastructure, supports efficient processing and storage of large datasets, enhances accessibility to AI resources, and promotes smooth integration and deployment across various applications. For example, in April 2024, the European Commission, a Belgium-based governmental body, reported that 77.6% of large enterprises utilized cloud computing services in 2023, representing a 6 percentage point increase since 2021. Similarly, the uptake among medium-sized enterprises rose to 59% in 2023, up from 53% in 2021, while small businesses saw an increase of 3.8 percentage points, reaching 41.7% during the same timeframe. Consequently, the rising adoption of cloud services is fueling the growth of the AI as a Service market.

Technology advancements have emerged as a key trend in the AI as a service market, with companies actively adopting new technologies to strengthen their market positions. In March 2023, Nvidia Corporation, a US-based software company, launched the "DGX Cloud," a new cloud supercomputing service technology that provides GPU supercomputers-as-a-Service. This offering allows businesses to access both hardware and software for developing advanced models for generative AI and other applications, showcasing the ongoing technological innovations in the AI as a service sector.

Major companies in the AI as a service market are placing a heightened focus on introducing innovative products to gain a competitive edge. EY.ai, launched by Ernst & Young Global Limited in September 2023, is a notable example. EY.ai is a unifying platform that leverages artificial intelligence to streamline and enhance business processes, offering a comprehensive solution for data analytics, automation, and intelligent decision-making within enterprises. Ernst & Young Global Limited has invested $1.4 billion in the platform, which integrates leading EY technology platforms and AI capabilities with deep expertise in various domains. EY.ai aims to help companies confidently and responsibly adopt AI by providing an extensive AI ecosystem, including alliances with innovative organizations and a secure, large language model called EY.ai EYQ.

In July 2022, International Business Machines Corporation (IBM), a US-based multinational technology company, acquired Databand.AI for $150 million. This strategic acquisition strengthens IBM's capabilities in hybrid cloud and AI, particularly in the areas of data quality, monitoring pipeline health, and automating advanced DataOps processes. Databand.AI, an Israel-based technology company, focuses on enabling individuals to track data quality, monitor pipeline health, and automate DataOps processes, aligning with IBM's commitment to enhancing its capabilities in these domains.

Major companies operating in the AI as a service market include Amazon Web Services Inc., Salesforce Inc., International Business Machines Corporation, Microsoft Corporation, Google Inc., SAP SE, Intel Corporation, BigML Inc., Fair Isaac Corporation, SAS Institute Inc., Siemens, Apple Inc., CognitiveScale Inc., Dataiku SAS, Oracle Corporation, H2O.AI Inc., Craft.AI, DataRobot Inc., OpenAI LP, Baidu Inc., NVIDIA Corporation, General Electric Company, Infosys Limited, Wipro Limited, Tata Consultancy Services Limited, Accenture plc, CloudMinds Technology Inc., Palantir Technologies, C3.ai, Databricks.

North America was the largest region in the AI as a service market in 2024. Asia-Pacific is expected to be the fastest-growing region in the global AI as a service market report during the forecast period. The regions covered in the ai as a service market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the ai as a service market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Artificial Intelligence as a Service (AIaaS) refers to commercially available AI solutions that enable businesses to leverage and deploy AI methods without the need to build an extensive in-house AI infrastructure. This allows individuals and businesses to explore and implement AI for various applications with a smaller initial investment and reduced risk.

The main components of AI as a service include solutions and services. AI solutions are pre-built or adaptable programs designed to address specific use cases and tackle particular business challenges. These AI technologies can leverage both structured and unstructured data to predict events, issue warnings, or identify trends beneficial to enterprises. AI as a service encompasses infrastructure as a service, platform as a service, and software as a service, which can be deployed for public, private, and hybrid types of deployments, catering to both small and medium-sized enterprises as well as large enterprises. The sectors benefiting from AI as a service include banking, financial services, and insurance (BFSI), information technology and telecom, retail, manufacturing, public sector, energy and utilities, healthcare, and various other industries.

The AI as a service market research report is one of a series of new reports that provides AI as a service market statistics including AI as a service industry global market size, regional shares, competitors with an AI as a service market share, detailed AI as a service market segments, market trends and opportunities, and any further data you may need to thrive in the AI as a service industry. This AI as a service 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 AI as a service market includes revenues earned by entities by assisting businesses with their AI future planning and providing them with AI tools and skills in a scalable and adaptable cloud environment. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included. The AI as a service market consists of sales of reactive machines AI, limited memory AI, theory of mind AI, and self-aware AI. 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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