AI in Education Market Size - By Component (Solution, Service), By Deployment (On-premise, Cloud), By Technology (Machine Learning, Deep Learning, Natural Language Processing), Application, End-use & Forecast, 2023-2032

AI in Education Market Size

Artificial Intelligence (AI) in Education Market size reached USD 4 billion in 2022 and is projected to expand at over 10% CAGR from 2023 to 2032, owing to the growing inclination towards personalized learning.
 

Increasing reliance on technological reinforcement and conventional techniques has rendered traditional education models no longer sufficient to sustain the sector. In order to fulfill the evolving demands of students and educators, edtech startups are transforming and improving the education sphere by disrupting traditional technologies and advancing existing learning methods. As of January 2023, there are 30 EdTech Unicorns worth $89 billion worldwide.
 

AI in Education Market Trends

Scaling enhanced teaching efficiency requirements

The increasing burden of administrative tasks has steered the higher need for teachers to provide individual attention to each student. To that end, AI tools are increasingly employed to automate routine administrative tasks, such as grading and lesson planning while freeing up valuable time for educators to focus on high-impact activities, including student support, mentoring, and facilitating discussions. Moreover, AI-powered virtual assistants also provide real-time assistance to teachers, helping them in addressing student queries and concerns more effectively.
 

Rising importance of data-driven decision making

Data-driven decision making helps educators in making informed decisions regarding curriculum development, resource allocation, and instructional strategies, ultimately improving the overall quality of education. Subsequently, the adoption of AI in education market is growing as it enables comprehensive data collection and analysis for offering valuable insights to educators, administrators, and policymakers. Through the aggregation and analysis of vast amounts of student data, AI systems also help to identify patterns, trends, and learning gaps.

Increasing demand for intelligent tutoring systems

The demand for intelligent tutoring systems is poised to observe significant growth as educators are recognizing their potential in enhancing the student outcomes. These systems are witnessing widespread adoption as they help to leverage AI to provide one-on-one tutoring experiences to students. These systems assess student knowledge and provide targeted guidance as well as immediate feedback. Moreover, AI-powered tutors easily adapt to individual learning styles and pace to foster a more efficient and effective learning process.

Rising penetration of virtual reality (VR) and augmented reality (AR) in education

The deployment of AI with VR and AR technologies helps in creating immersive and interactive learning experiences, further assisting students to explore historical sites, conduct virtual science experiments, and participate in realistic simulations. AI algorithms not only analyse student interactions within virtual environments, but also provide real-time feedback while adjusting the experiences for optimizing the learning outcomes. Furthermore, the integration of AI, VR, and AR is expected to open new opportunities for engaging and experiential education which in turn fueling the AI in education market demand.

Higher adoption of intelligent assessment and adaptive testing

The demand for intelligent assessment systems is considerably rising as they reduce the reliance on standardized tests to offer more accurate representation of students' abilities for fostering a more inclusive evaluation process. To that end, AI is increasingly deployed as it helps transform the assessment process by providing intelligent and adaptive testing mechanisms. Furthermore, AI algorithms aid in analysing student responses, identifying learning gaps, and generating tailored questions to evaluate comprehension and critical thinking skills.
 

AI in Education Market Analysis

The solution segment of AI in education market is poised to grow at 20% CAGR through 2032, as a result of the ongoing development of sophisticated platforms and massive investments in portfolio expansion by several technology companies to address the growing need for AI-powered educational software solutions, including adaptive learning technology tools, virtual learning assistants, and so on. For instance, in September 2021, educational technology developer Blackboard and Anthology, a leading software company, inked a deal to expedite the transformation of educational institutions and learning environments to promote student success rates.
 

The AI in education market from the cloud deployment is set to record 30% CAGR during 2023 to 2032, attributed to the prevalent adoption of cloud computing technologies due to their simplicity & flexibility. Notably, many higher education institutions in key regions are implementing cloud technology to improve information sharing across campuses worldwide. Additionally, the growing preference for virtual cloud classrooms to run a class or course remotely is likely to support industry growth.
 

The natural language processing technology is predicted to reach USD 20 billion valuation by 2032. Advancements in educational technologies and access to previously unprecedented amounts of educational text and speech are fostering the adoption of NLP to meet the demands of both students and educators. Moreover, the growing use of NLP to automate the assessment of student texts based on linguistic parameters, such as grammatical accuracy or organizational structure.
 

The smart AI education content market is slated to showcase more than 25% CAGR between 2023 and 2032. AI smart content creation stimulates the real-life experience of graphical web-based study environments and improves learning experiences using robots, audio & video, and 2D -3D visualization. The surging incorporation of IoT in education and services in order to make the most of this technology while making education more engaging and collaborative is projected to increase the demand for smart content.
 

The artificial intelligence in higher education market captured around USD 2 billion revenue in 2022. The soaring adoption of AI by numerous universities globally since the COVID-19 outbreak to bridge learning gaps and improve the learning pace, coupled with significant government efforts to enhance educational standards. For instance, in August 2022, India’s Ministry of Electronics and Information Technology collaborated with the University Grant Commission to offer specialized digital courses through the e-resources portal to millions of students in rural areas.