Artificial Intelligence (AI) Software Market Opportunities and Strategies to 2033

This report describes and explains the artificial intelligence (AI) software market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global artificial intelligence (AI) software market reached a value of nearly $59.97 billion in 2023, having grown at a compound annual growth rate (CAGR) of 35.52% since 2018. The market is expected to grow from $59.97 billion in 2023 to $223.25 billion in 2028 at a rate of 30.07%. The market is then expected to grow at a CAGR of 31.03% from 2028 and reach $862.14 billion in 2033.

Growth in the historic period resulted from increased internet penetration, increased digital transformation across industries and rise in adoption of AI in healthcare. Factors that negatively affected growth in the historic period was data privacy and security concerns and lack of trust in AI systems.

Going forward, rising investment in AI startups, favorable government initiatives, growing adoption of automation and growth of autonomous vehicles will drive the growth. Factor that could hinder the growth of the artificial intelligence (AI) software market in the future include lack of skilled personnel and technical expertise and concerns over job displacement.

The artificial intelligence (AI) software market is segmented by deployment model into on-premises, cloud and hybrid. The cloud market was the largest segment of the artificial intelligence (AI) software market segmented by deployment model, accounting for 55.31% or $33.16 billion of the total in 2023. Going forward, the cloud segment is expected to be the fastest growing segment in the artificial intelligence (AI) software market segmented by deployment model, at a CAGR of 34.36% during 2023-2028.

The artificial intelligence (AI) software market is segmented by application into automation, remote sensing, medical diagnosis, speech recognition, text recognition and other applications. The automation market was the largest segment of the artificial intelligence (AI) software market segmented by application, accounting for 38.24% or $22.93 billion of the total in 2023. Going forward, the medical diagnosis segment is expected to be the fastest growing segment in the artificial intelligence (AI) software market segmented by application, at a CAGR of 35.89% during 2023-2028.

The artificial intelligence (AI) software market is segmented by technology into computer vision, data analytics, machine learning, natural language processing and other technologies. The machine learning market was the largest segment of the artificial intelligence (AI) software market segmented by technology, accounting for 32.74% or $19.63 billion of the total in 2023. Going forward, the machine learning segment is expected to be the fastest growing segment in the artificial intelligence (AI) software market segmented by technology, at a CAGR of 34.62% during 2023-2028.

The artificial intelligence (AI) software market is segmented by end-user into advertising and media, BFSI, healthcare, automotive and transportation, robotics, food, governance, energy, architecture, tourism industries and other end-users. The advertising and media market was the largest segment of the artificial intelligence (AI) software market segmented by end-user, accounting for 22.70% or $13.61 billion of the total in 2023. Going forward, the healthcare segment is expected to be the fastest growing segment in the artificial intelligence (AI) software market segmented by end-user, at a CAGR of 36.32% during 2023-2028.

North America was the largest region in the artificial intelligence (AI) software market, accounting for 37.01% or $22,194. 50 million of the total in 2023. It was followed by Asia Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the artificial intelligence (AI) software market will be Asia Pacific and Africa where growth will be at CAGRs of 36.05% and 32.90% respectively. These will be followed by Middle East and South America where the markets are expected to grow at CAGRs of 32.32% and 31.36% respectively.

The global artificial intelligence (AI) software market is fairly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 19% of the total market in 2023. NVDIA Corporation. was the largest competitor with a 5.9% share of the market, followed by Google LLC (Alphabet Inc.). with 2.8%, Open AI with 2.7%, Microsoft Corporation with 2.1%, Intel Corporation with 1.3%, Oracle Corporation. with 1.1%, Cisco Systems Inc. with 0.9%, International Business Machines (IBM) Corporation with 0.9%, Adobe Inc with 0.7% and Baidu Inc. with 0.7%.

The top opportunities in the artificial intelligence (AI) software market segmented by deployment model will arise in the cloud segment, which will gain $112.09 billion of global annual sales by 2028. The top opportunities in the artificial intelligence (AI) software market segmented by technology will arise in the machine learning segment, which will gain $67.17 billion of global annual sales by 2028. The top opportunities in the artificial intelligence (AI) software market segmented by application will arise in the automation segment, which will gain $61.64 billion of global annual sales by 2028. The top opportunities in the artificial intelligence (AI) software market segmented by end-user will arise in the BFSI segment, which will gain $41.45 billion of global annual sales by 2028. The artificial intelligence (AI) software market size will gain the most in USA at $43.97 billion.

Market-trend-based strategies for the artificial intelligence (AI) software market include focusing on integration of innovative solutions such as search tools to enhance data retrieval, improve user experience and drive business efficiency, focusing on innovative technologies such as AI-powered PC (personal computer) operating systems, focusing on innovative solutions such as AI-powered programs, focusing on innovative products such as AI chatbots, focusing on developing innovative products, such as Rufus, to enhance artificial intelligence capabilities and focused on developing innovative services, such as Lexis+ AI, to streamline legal research and analytics.

Player-adopted strategies in the artificial intelligence (AI) software market include focus on enhancing its operational capabilities through the launch of new products and developments, focus on strengthening its business operations through new solutions and enhancing its operational capabilities through strategic partnerships.

To take advantage of the opportunities, the analyst recommends the artificial intelligence (AI) software companies to focus on Ai-driven search tools to enhance user experience, focus on Ai-powered pc operating systems for enhanced performance, focus on Ai-powered solutions for process automation, focus on Ai chatbots for enhanced customer engagement, focus on Ai -driven innovation for enhanced industry solutions, focus on Ai -driven efficiency and domain-specific solutions, focus on the cloud market for growth, focus on machine learning for Ai software companies, expand in emerging markets, focus on expanding distribution channels, focus on pricing models and value-based approaches, focus on digital and content marketing channels, prioritize industry-specific outreach and partnerships, focus on automation for Ai software companies and focus on advertising and media for Ai software companies.