Artificial Intelligence (AI) Augmented Software Engineering Market Report 2025

This report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography.

The artificial intelligence (AI) augmented software engineering market size has grown exponentially in recent years. It will grow from $3.18 billion in 2024 to $4.67 billion in 2025 at a compound annual growth rate (CAGR) of 46.9%. The growth in the historic period can be attributed to rising demand for efficient software development processes, increasing complexity of software systems, widespread adoption of agile and devOps practices, expanding application of AI across different sectors, and increasing awareness about the benefits of AI-augmented software engineering among businesses.

The artificial intelligence (AI) augmented software engineering market size is expected to see exponential growth in the next few years. It will grow to $21.49 billion in 2029 at a compound annual growth rate (CAGR) of 46.5%. The growth in the forecast period can be attributed to increasing investment in AI technologies, growing adoption of cloud computing, ongoing emphasis on digital transformation initiatives, and an and an increasingly competitive business environment. Major trends in the forecast period include technological advancements in AI and machine learning capabilities, integrating AI technologies into various stages of the software development lifecycle, advancements in natural language processing (NLP) technologies, AI-powered testing tools and platforms, and adopting AI-based code analysis tools.

The surge in cloud computing adoption is anticipated to drive the growth of the artificial intelligence (AI)-augmented software engineering market in the foreseeable future. Cloud computing involves delivering services over the internet, offering benefits such as rapid innovation, scalable resources, and cost efficiencies. The increased adoption of cloud solutions is driven by their scalability, cost-effectiveness, flexibility, and accessibility, empowering businesses to streamline operations and accelerate innovation. AI-augmented software engineering is becoming integral to cloud computing, enabling automation of development processes, optimization of resource allocation, and enhancement of overall efficiency. For example, in December 2023, Eurostat reported a 4.2 percentage point increase in EU enterprises purchasing cloud computing services, reaching 45.2% in 2023 compared to 2021. This trend underscores the significant role of cloud computing in driving the demand for AI-augmented software engineering solutions.

Leading companies in the AI-augmented software engineering market are focusing on developing advanced code generation and assistance tools, such as autonomous AI software engineers, to streamline development workflows, boost productivity, and address complex tasks with unparalleled efficiency and accuracy. Autonomous AI software engineers are sophisticated AI systems capable of autonomously performing various software engineering tasks, including coding, debugging, project planning, and deployment, with minimal human intervention. For instance, in March 2024, Cognition Corporation launched Devin, an autonomous AI software engineer designed to handle entire development projects independently. Devin utilizes advanced long-term reasoning to autonomously plan and execute complex tasks, learn new technologies, build and deploy applications, debug code, and train AI models. Devin represents a groundbreaking solution in AI-assisted development, revolutionizing the software engineering landscape by delivering exceptional efficiency and precision.

In December 2022, Tecnotree Corporation acquired CognitiveScale Inc. to bolster its position in 5G digital business support systems by integrating AI, machine learning capabilities, and multi-cloud extensibility. CognitiveScale Inc., based in the US, specializes in providing AI-engineered software development solutions, complementing Tecnotree's efforts to leverage AI and machine learning in enhancing its telecommunications offerings.

Major companies operating in the artificial intelligence (AI) augmented software engineering market report are Alphabet Inc.; Meta Platforms Inc.; Amazon Web Services Inc.; Intel Corporation; International Business Machines Corporation; Oracle Corporation; SAP SE; NVIDIA Corporation; Salesforce.com Inc.; Cognizant Technology Solutions Corporation; Baidu Inc; Adobe Inc.; Infosys Limited; Alibaba Cloud; HCL Technologies Limited; Wipro Limited; Palantir Technologies Inc.; OpenAI; DeepMind Technologies Limited; DataRobot Inc.; LeewayHertz Technologies Pvt. Ltd.; eSparkBiz Technologies Pvt. Ltd.; Markovate Inc.; DataToBiz Pvt. Ltd.; Nettyfy Technologies Pvt. Ltd.

North America was the largest region in the artificial intelligence (AI) augmented software engineering market in 2024. The regions covered in the artificial intelligence (AI) augmented software engineering market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the artificial intelligence (AI) augmented software engineering market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The artificial intelligence (AI) augmented software engineering market consists of revenues earned by entities by providing services such as software development, automated testing, code analysis, predictive maintenance, intelligent project management, and automated deployment. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI) augmented software engineering market also includes sales of AI-powered integrated development environments (IDEs), code analysis tools, automated testing platforms, predictive maintenance software, and AI-based debugging tools to streamline software development processes and improve productivity in the software engineering domain. 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).

AI-augmented software engineering involves the integration of artificial intelligence (AI) techniques and technologies into the software development process, aiming to boost productivity, automate repetitive tasks, enhance code quality, and foster innovation. By leveraging AI, this approach empowers software developers to concentrate on higher-level tasks, stimulate creativity, and swiftly adapt to evolving project requirements.

The primary components of AI-augmented software engineering include machine learning, deep learning, and other AI techniques. Machine learning, a subset of AI, enables systems to learn from data and make predictions or decisions autonomously. Various tools such as conversational AI models, autonomous testing tools, and AI-based debugging tools, among others, aid in tasks such as code creation, bug fixing, and software testing. These technologies cater to a broad spectrum of end users including software development companies, startups, independent developers, government organizations, as well as research and academic institutions. By integrating AI capabilities into software development workflows, organizations can streamline processes, improve efficiency, and drive innovation in the rapidly evolving field of software engineering.

The artificial intelligence (AI) augmented software engineering market research report is one of a series of new reports that provides artificial intelligence (AI) augmented software engineering market statistics, including artificial intelligence (AI) augmented software engineering industry global market size, regional shares, competitors with a artificial intelligence (AI) augmented software engineering market share, detailed artificial intelligence (AI) augmented software engineering market segments, market trends and opportunities, and any further data you may need to thrive in the artificial intelligence (AI) augmented software engineering industry. This artificial intelligence (AI) augmented software engineering 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 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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