AI in Warehousing Market Size - By Component, By Application, By Deployment Mode, By Organization Size, By End-User Industry, Analysis, Share, Growth Forecast, 2024 - 2032

AI in Warehousing Market Size

The AI in warehousing market size was valued at USD 8.3 billion in 2023 and is projected to grow at a CAGR of 26.8% between 2024 and 2032. The expansion of the market is being aided by the growing demand for automation and improved efficiency in various warehouse activities. For example, in May 2024, ARAPL RaaS unveiled a strategic initiative that aims to augment the entire warehouse integration process by combining cutting-edge AI with advanced robotics. These technologies will include real-time AI which improves deployment efficiency, as well as optimization of task allocation and navigation.
 

The ever-increasing use of online shopping and the overall boom in e-commerce is also factor contributing to the AI in warehousing industry growth. The rapid growth of consumers in online shopping significantly increases the demand for order efficient management of warehouses. Proper inventory oversight, rapid order processing, and AI expected understanding customer needs all get a chance to be met.
 

The global E-commerce Logistics market size was valued at USD 426.2 billion in 2023 and is estimated to register a CAGR of over 14% between 2024 and 2032. With the rise of e-commerce logistics, the need for effective warehousing solutions will also rise, hence it will fuel the market growth for the AI in warehousing market.
 

With the help of AI in warehousing, it leads to an improvement in productivity and simultaneously lowering operational costs. Costs are also kept to a minimum because robotic systems, demand forecasting, and AI analytical tools optimize work processes. The automated systems also eliminate a large percentage of manual errors. Overall, the use of AI also allows for greater efficiency.
 

AI in Warehousing Market Trends

• More and more AI-driven modern robots are now being used in many warehouses to perform several tasks such as moving, packing, and sorting items. These robots are trained to complete the tasks with as much efficiency as possible and are expected to drive the market.
   
• In July 2023, Mytra, a warehouse automation company, was founded with an investment of USD 78 million. The company’s main purpose is to design AI-driven robots which is used for handover material manipulation with advanced automation in a warehouse, manufacturing facility and logistics.
   
• The use of Autonomous mobile robots is also gaining a lot of popularity in warehouse automation because they are able to do monotonous tasks as well as move from one place to another. The Autonomous Mobile Robots Market size was valued at USD 2.7 billion in 2023 and is projected to grow by more than 15% from 2024 to 2032.
   
• The worldwide shortfall of workers in warehousing activities is encouraging the adoption of artificial intelligence and automation in warehouse tasks to enhance productivity.
   
• As an example, the shortage of labor prompts Walmart to use more robotic systems. In April 2024 the firm revealed intentions to install 19 self-driving electric forklifts in 4 of its plants.
   

AI in Warehousing Market Analysis

Based on component, AI in warehousing market is divided into hardware, software, and services. In 2023, the hardware segment dominated the market generating revenue of USD 3.9 billion and the software segment is expected to grow at CAGR of around 27% and is poised to exceed USD 31.5 billion by 2032.
 

• Hardware components such as sensors, cameras, robotics and autonomous vehicles all play a very important role in implementing AI-driven solutions in the market.
   
• The increasing incorporation of various hardware components is leading to the automation of many warehousing activities. Such advanced systems receive a considerable amount of funding which frequently indicates major capital investment.
   
• For example, in March 2024, Gather AI obtained an investment worth USD 17 million dollars to address their supply chain challenges with the help of AI assisted inventory management.
   
• The investment helped the company automate inventory visibility issues for manufacturing, retail, and third-party logistics facilities, by using autonomous drones. It also helped to provide more better data.
   

Based on deployment mode, the AI in warehousing market is segmented into cloud and on-premises. In 2023, the cloud dominates the market with 63% of market share and is expected to grow at CAGR of over 27% from 2024 to 2032.
 

• The cloud segment in the AI in warehousing industry is getting a lot of attraction and many businesses are moving to cloud-based solutions from traditional solutions as the cloud offers much more scalability and helps businesses adjust their resources according to their demand without much extra cost.
   
• As an example, in June 2024, Arvato and Microsoft partnered together to develop self-managing warehouse. They launched a research project together named “Moonshot” and it uses the help of AI, robotics and cloud computing within the warehouse environment to implement self-improving processes.
   

• Cloud solutions remain the preferred option for those looking to incorporate AI into warehouse operations because of its relatively low capital expenditure, flexibility, and accessibility.
   

Based on application, the AI in warehousing market is segmented into inventory management, order picking & sorting, warehouse optimization, predictive maintenance, and supply chain visibility, with the inventory management category expected to take the lead in the market.
 

• In 2023, the inventory management segment accounts for a majority of 30% market share, generating revenue of USD 2.7 billion.
   

• Intelligent inventory systems depend on accurate prediction and discrepancy management through the use of real-time data, machine learning, and predictive analytics. This helps reduce stock outages and overstocking.
   
• To illustrate, in August 2024, the world’s leading company in supply chain solutions, Armada, implemented Kargo’s inventory management system which was powered by AI-enabled computer vision technologies. The goal of this project was to improve effectiveness and efficiency of operations in all of Armada’s warehouses.
   

• In 2023, North America dominated the AI in warehousing market with around 43% market share and generates around USD 3.6 billion in revenue and is expected to exceed USD 30.2 billion by 2032. The region’s market growth is driven by early adoption of technology and the strong presence of market leaders, particularly in the US.
   
• The increasing labor costs and the shortage of skilled personnel in the United States have promoted the use AI and automation in warehouses. For instance, Ikea introduced the upgraded version of its stock counting drone system in the US, which has seen other autonomous drones working in conjunction with shopfloor workers since August 2024.
   
• Because of its well-developed logistical systems, Europe offers great potential for AI development in warehousing, augmented by legacy technology infrastructure. In September 2024, Dexory, a UK corporation that builds autonomous warehouse robots, raised USD 80 million in series B funding so they could begin operating in the United States.
   
• Moreover, in June 2024, Sereact, a robotics startup based in Stuttgart, was able to raise €25 million during its Series A investment round. This funding is intended to improve the company’s AI-powered robotics solutions for autonomous warehouses. This significant investment allowed Sereact to further develop its Vision Language Action Models (VLAM), which enable robots to perform complex tasks with a high degree of autonomy.
   
• Rise in e-commerce, especially in countries such as China, Japan, and India, are fueling the AI in warehousing market to grow. These nations also have a rising customer base which increases the need for automation use in warehouses. Lastly developments in AI technology contribute to the overall growth of the market.
   
• Consider, for example, the case where in early September 2024, Control One, a startup in Bangalore, launched India’s first AI-driven physical agent. During an interview during the Hong Kong-Asean summit, the chief executive officer (CEO) of Lazada, which is part of the Alibaba group, boasted of how vital AI was to their e-commerce business.
   
• Also, this technology was recently shown and it was demonstrated with rather remarkable ease that the materials are manipulated automatically with great deal of flexibility.
   
• In countries such as Brazil and Mexico, rapid growth of e-commerce and modernization efforts are driving the market to grow. In the Middle East & Africa (MEA), the market is gradually expanding due to increased investments in technology and infrastructure.
   

AI in Warehousing Market Share

• Top 7 companies of AI in warehousing industry are Amazon Web Services (AWS), Microsoft, Google LLC, IBM, Honeywell International, Siemens, and Oracle. The top companies collectively hold around 42% of the market in 2023.
   
• Through its AWS IoT and AWS RoboMaker platforms, AWS utilizes AI in warehousing to enable automation and perform real-time analytics of inventory data. Furthermore, AWS has machine learning tools such as Amazon SageMaker that optimize supply chain processes, enhance predictive maintenance, and achieve greater efficiency while driving costs down.
   
• Microsoft employs artificial intelligence within warehousing through the help of Azure IoT and Azure Machine Learning services. These services have effective features like automation and proactive forecasting which are key for effective stock management. In addition, Microsoft’s Dynamics 365 Supply Chain Management makes use of AI throughout business processes to improve efficiencies, automate decisions, and optimize warehouse structures based on real-time data.
   
• Through its Google Cloud AI Suite which encompasses TensorFlow and Vertex AI, Google utilizes artificial intelligence for warehousing. These tools allow for automation, predictive analytics, and accurate inventory control. By providing actionable data, improving demand forecasts, and supporting robotics, Google’s AI solutions boost warehouse efficiency.
   

AI in Warehousing Market Companies

Major players operating in the AI in warehousing industry are:

• ABB
• Amazon Web Services (AWS)
• Google
• Honeywell International
• IBM
• Microsoft
• Oracle
• SAP
• Siemens
• Zebra Technologies
   

Market leaders are constantly capitalizing on different market opportunities such as formations of partnerships and collaboratives, mergers and acquisitions, new launches and innovations, investment in research and development and so on. This is useful as it allows the integration of new features and technologies. Similarly, manufacturers merging or acquiring other companies in the market allowing them for improved business reach, resources, and innovation into their offerings.
 

AI in Warehousing Industry News

• In July 2024, Lucas Systems, a warehouse management software supplier, launched a revolutionary AI-based dynamic slotting module that streamlines and accelerates the warehouse re-slotting process. It enables managers and supervisors to reslot and therefore enhances productivity and efficiency.
   
• In 2024, Holman Logistics and Deloitte Consulting partnered to develop AI-enabled Warehouse Management Software WMS for Fulfilld. This agreement will advance warehouse system operations productivity with modern technologies. Fulfilld WMS combines and incorporates information from employees working in the warehouse, ERP systems, and a multiservice, multi-directional data platform for management optimization and satisfaction of end users.
   
• In June 2024, GXO Logistics partnered with Reflex Robotics and Apptronik, two robot manufacturers, on testing humanoid robots in their warehouse. This merger improved their efforts towards IoT adoption in warehouses. Reflex Robotics developed the Reflex Robot which can start working within 60 minutes of being turned on. This robot learns from human interaction and will be fully autonomous over time.
   
• In August 2024, Ikea commenced the utilization of AI drones at their Winterslag Distribution Center situated in Belgium. With the use of AI drones, human intervention is lowered while work productivity is maximized. This new method is set to be implemented in more locations across Europe and North America.
   

The AI in warehousing market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2021 to 2032, for the following segments:

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Market, by Component

• Hardware 
  • AI-powered robots
  • Sensors
  • Cameras
  • Others
• Software 
  • AI algorithms
  • Data analytics software
  • Others
• Services 
  • Professional 
  • Implementation
  • Maintenance
  • Support
• Managed

Market, by Application

• Inventory management
• Order picking & sorting
• Warehouse optimization
• Predictive maintenance
• Supply chain visibility

Market, by Deployment Mode

• Cloud
• On-premises

Market, by Organization Size

• Small and Medium-sized Enterprises (SMEs)
• Large Enterprises

Market, by End-use Industry

• Retail & E-commerce
• Logistics & transportation
• Manufacturing
• Healthcare
• Food & beverage
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA