AI Model Risk Management Market Report 2024

This AI Model Risk Management market 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 AI model risk management market size has grown rapidly in recent years. It will grow from $5.32 billion in 2023 to $6.17 billion in 2024 at a compound annual growth rate (CAGR) of 16%. The growth in the historic period can be attributed to several factors such as the widespread deployment of AI models in global markets, rising concerns about insurance coverage and liability related to AI model failures, increasing awareness among stakeholders regarding the potential risks associated with AI models, and the adoption of AI across industries, which requires strong risk management frameworks. Additionally, there is a drive towards enhancing operational efficiency through effective management of AI model risks and governance.

The AI model risk management market size is expected to see rapid growth in the next few years. It will grow to $11.19 billion in 2028 at a compound annual growth rate (CAGR) of 16.1%. The growth in the forecast period can be attributed to increasing regulatory scrutiny and requirements for managing AI models, increasing board and executive oversight of AI model risk management practices, a heightened awareness of ethical implications of AI, and risks associated with cybersecurity threats targeting AI models. Major trends in the forecast period include rapid advancements in AI technologies, integration of AI model risk management with broader enterprise risk management frameworks, development of methodologies to quantify and assess risks associated with AI models, and continuous improvement and adaptation of AI model risk management strategies.

The increasing awareness of cybersecurity threats is expected to drive the growth of AI model risk management in the future. Cybersecurity threats involve malicious activities aimed at compromising computer systems to steal, damage, or disrupt data, including malware, phishing, and denial-of-service (DoS) attacks. As reliance on digital technologies grows and the attack surface expands, the prevalence of such threats increases. AI model risk management helps address these threats by identifying vulnerabilities, predicting potential attacks, and enhancing protective measures. For example, in July 2022, the UK Department for Digital, Culture, Media, and Sport reported that 39% of UK businesses experienced a cyber attack in the past year, with medium and large businesses facing an average estimated cost of $5,369.68, and $24,878.68 when considering material losses such as money or data. Thus, the rising awareness of cybersecurity threats is driving the growth of the AI model risk management market.

Leading companies in the AI model risk management market are focusing on developing advanced AI solutions to gain a competitive edge. Advanced AI models are sophisticated systems designed to perform complex tasks with high accuracy and efficiency, utilizing state-of-the-art techniques in machine learning, deep learning, and natural language processing to analyze data, make predictions, and automate decision-making processes. For instance, in July 2024, Zendata, a US-based security platform developer, introduced an advanced AI model and data usage scanning platform. This solution enhances governance, bias detection, and compliance across enterprise AI ecosystems, meeting the increasing demand for transparent and responsible AI deployment.

In July 2023, KPMG International Limited, a Netherlands-based professional services network, formed a partnership with Microsoft Corporation to advance AI in professional services. This multi-year cloud and AI alliance aims to enhance the employee experience and drive innovation across Audit, Tax, and Advisory services. Microsoft Corporation, a US-based technology company, provides software products and engages in AI model risk management.

Major companies operating in the AI model risk management market are Amazon.com Inc., Google LLC, Microsoft Corporation, Accenture plc, International Business Machines Corporation, Deloitte Touche Tohmatsu Limited, PricewaterhouseCoopers International Limited, Ernst & Young, Oracle Corporation, KPMG International Limited, SAP SE, Moody's Analytics, Sas Institute Inc, DataBricks Inc, Teradata Corporation, Palantir Technologies Inc., Fair Isaac Corporation, The MathWorks Inc, DataRobot Inc, H2O.ai, LogicGate, LogicManager.

North America was the largest region in the AI model risk management market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the AI model risk management market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the AI model risk management market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

AI model risk management involves identifying, assessing, and mitigating risks related to the development, deployment, and operation of artificial intelligence models. This practice ensures that AI systems operate reliably and ethically while adhering to regulatory standards. It helps prevent biases, inaccuracies, and potential negative outcomes that could affect decision-making and stakeholder trust.

The primary components of AI model risk management include solutions and services. Solutions refer to specific software, hardware, or a combination of both, designed to address particular issues or meet defined needs. These solutions can be deployed in cloud-based or on-premise environments. The organization size using these solutions can range from large enterprises to small and medium-sized enterprises (SMEs). Applications of AI model risk management include model documentation, model governance, model monitoring, and model validation. Industry verticals utilizing these practices include financial services, healthcare, insurance, and telecommunications.

The AI model risk management market research report is one of a series of new reports that provides AI model risk management market statistics, including AI model risk management industry global market size, regional shares, competitors with an AI model risk management market share, detailed AI model risk management market segments, market trends, and opportunities, and any further data you may need to thrive in the AI model risk management industry. This AI model risk management 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 model risk management market includes revenues earned by entities by providing services such as ethical audits, training and education, bias mitigation, and performance monitoring. 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 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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