AIoT Market Size - By Component, By Deployment, By End-use, Forecast, 2024 - 2032

AIoT Market Size

The global artificial intelligence of things market was valued at USD 10.8 billion in 2023 and is projected to grow at a CAGR of 24.6% between 2024 and 2032. Increasing government initiatives in digital transformation are anticipated to drive the market growth. Governments worldwide recognize the potential of AIoT technologies to enhance efficiency, drive innovation, and improve public services. By funding smart city projects, advanced manufacturing, and digital infrastructure, governments aim to create an environment conducive to AIoT adoption. These initiatives often focus on integrating AI and IoT to optimize resource management, transportation, and healthcare.
 

Rising focus on energy efficiency and sustainability is driving the AIoT market growth. As concerns related to climate change and resource depletion increases, businesses and governments are prioritizing technologies that reduce energy consumption and optimize resource use. AIoT solutions play a crucial role in achieving sustainability goals by enabling smarter energy management and automation. Additionally, increasing emphasis on sustainability also drives investment in AIoT technologies across various sectors, as organizations seek to enhance their operational efficiency while minimizing their ecological footprint.
 

AIoT Market Trends

The high efficiency of AIoT solution is propelling the market growth. These solutions allow for faster data processing and better resource management. With built-in AI, IoT devices can analyze large amounts of data locally, which reduces delays and the need for constant cloud connections. This leads to real-time decision-making, important for various uses such as smart manufacturing and healthcare. The ability to quickly identify patterns and anomalies enhances operational efficiency and reduces energy consumption and operational costs, making AIoT solutions more attractive to businesses looking to improve their bottom line.
 

The shortage of a skilled workforce with expertise in AIoT platforms is restraining the market growth. As companies increasingly seek to implement AIoT solutions, they face challenges in finding professionals who possess the necessary technical skills in both AI and IoT technologies. This skills gap limits the ability of organizations to fully leverage AIoT capabilities, hindering their efforts to optimize operations and innovate. Without qualified personnel, businesses may struggle to integrate AI effectively with IoT devices, resulting in underutilization of these technologies and missed opportunities for enhanced efficiency and productivity.
 

AIoT Market Analysis

Based on component, the software segment accounted for over 65% share of the market in 2023 and is expected to exceed USD 45 billion by 2032, driven by increasing need for advanced data analytics. As organizations adopt AIoT solutions, they generate vast amounts of data from interconnected devices. This data holds valuable insights that can optimize operations, enhance decision-making, and drive innovation. AIoT software equipped with sophisticated analytics capabilities allows businesses to process and analyze data in real-time, enabling them to identify patterns, trends, and anomalies. Moreover, as industries focus on becoming more data-driven, the demand for AIoT software that offer robust analytics features continues to grow.
 

Based on deployment, the cloud segment held around 67% of the market share in 2023. Increasing demand for scalable and flexible infrastructure are projected to dive demand for cloud deployment. Thses platforms offer the scalability needed to handle fluctuating workloads, allowing organizations to quickly adjust their resources based on real-time needs. Additionally, cloud deployment facilitates seamless integration of AI and IoT capabilities, enabling advanced data processing and analytics without the need for extensive on-premises infrastructure. This reduces upfront costs and simplifies maintenance, making it an better option for organizations of all sizes.
 

U.S. region domunated 80% share of the AIoT market in 2023 and is expected to reach over USD 17 billion by 2032, due to increasing emphasis on smart manufacturing and industrial automation. Smart manufacturing leverages interconnected devices and advanced analytics to optimize production processes, monitor equipment performance, and predict maintenance needs. By integrating AI with IoT systems, businesses can achieve real-time insights into their operations, allowing for faster decision-making and improved resource management. Additionally, the demand for customized products and agile supply chains support manufacturers to implement AIoT solutions that enable flexibility and responsiveness.
 

The rapid advancement of 5G technology in Europe is propelling the market growth. The rollout of 5G networks across the region enhances connectivity, enabling faster data transmission and lower latency. This improved infrastructure allows AIoT devices to communicate in real-time, significantly enhancing their functionality and effectiveness. With 5G, industries can deploy a greater number of connected devices, facilitating the integration of AI and IoT technologies across various applications. The enhanced connectivity also drives innovation in smart city initiatives, such as traffic management and public safety systems.
 

The Asia Pacific market growth is driven by the rising emphasis on data security and privacy. As more devices become interconnected, concerns related to data breaches and cyber threats have increased. This has prompted businesses and governments to prioritize robust security measures in their AIoT deployments. Organizations are increasingly investing in AIoT solutions that include advanced security features, such as encryption, real-time threat detection, and secure data management. This focus on security protects sensitive information and builds consumer trust in AIoT technologies.
 

AIoT Market Share

Microsoft, IBM, and Google collectively held approximately 15% share of the AIoT industry in 2023. Microsoft focuses on integrating AI and IoT within its Azure cloud platform, providing comprehensive tools for developers to create smart applications. By emphasizing partnerships with industries such as manufacturing and healthcare, Microsoft enables businesses to leverage AIoT solutions efficiently.
 

IBM targets enterprise clients with its Watson IoT platform, offering advanced analytics and AI capabilities tailored for specific industries. By promoting industry-specific solutions, IBM enhances operational efficiency and predictive maintenance, appealing to organizations seeking to modernize their operations.
 

Google leverages its cloud infrastructure and machine learning expertise to provide scalable AIoT solutions. Its emphasis on open-source technologies and developer-friendly platforms attracts a diverse range of businesses. Google also focuses on enhancing user experience through AI-driven insights, making its offerings appealing for smart home applications and industrial automation.
 

AIoT Market Companies

Major players operating in the AIoT industry are:

• AWS
• Baidu
• Cisco
• Google
• IBM
• Intel
• Microsoft
• Nvidia
• Oracle
• Tencent
   

AIoT Industry News

• In September 2024, SU Group Holdings Limited announced it has entered into a joint development memorandum of understanding (MOU) with UrbanChain Group.  Under the MOU, the two companies will jointly collaborate on integrated AIoT car parking, security and access control solutions in Hong Kong, Macao and other Southeast Asian markets, with EV charging used to trigger the demand for more automatic car park and fee collection systems.
   
• In March 2024, eFishery had a merger with DycodeX, an Artificial intelligence Internet-Of-Things (IoT) company. This acqui-hire now adds DycodeX’s specialism in AI & IoT solutions to eFishery’s stable, and according to the announcement, the DycodeX team will be integrated into eFishery’s AIoT business unit.
   

This  AIoT 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

• Software
• Services

Market, By Deployment

• On-premises
• Cloud

Market, By End-use

• Manufacturing
• Infrastructure
• Healthcare
• Retail
• BFSI
• Automotive
• Other

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

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Netherlands
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Singapore
• Latin America
  • Brazil
  • Mexico
• MEA
  • GCC
  • South Africa