Artificial Intelligence Market Size Worth $2,172.63 Billion, Globally, by 2031 Growing at 39.1% CAGR | Exclusive Report by The Insight Partners

NEW YORK, Feb. 20, 2025 /PRNewswire/ -- The global artificial intelligence market share is set for explosive growth with a CAGR of 39.1% during 2025–2031, it was valued at $199.47 billion in 2024, with projections indicating a surge to $2,172.63 billion by 2031. This remarkable expansion is driven by growing demand for generative Al.

According to a new comprehensive report from The Insight Partners, "Artificial Intelligence Market Size and Forecast (2021 - 2031), Global and Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Component, Technology, Industry Vertical, and Geography", the global artificial intelligence market is observing healthy growth owing to the adoption of artificial intelligence technology by numerous industries across different regions.

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The artificial intelligence market was valued at US$ 199.47 billion in 2024 and is projected to reach US$ 2,172.63 billion by 2031; it is expected to register a CAGR of 39.1% during 2025–2031.

The report runs an in-depth analysis of market trends, key players, and future opportunities. Trade shows are a robust platform that allows companies to showcase their entire business at one booth, raising company awareness among customers. This is further boosting the market growth.

Market Overview and Growth Trajectory:

Artificial intelligence is used for various purposes across industries such as healthcare, retail and e-commerce, and manufacturing. These industries use AI technology to automate repetitive tasks, enhance accuracy, and accelerate job completion. As a result, it allows staff members to focus on more complex activities alongside increasing their efficiency and production outputs.

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Growing Demand for Multimodal Al: Multimodal Al is one of the most popular artificial intelligence tools used by businesses in Europe. It leverages machine learning algorithms on modalities such as speech, images, video, audio, text, and traditional numerical data sets. This approach creates a more holistic and human-like cognitive experience. Businesses in Europe are investing in building intelligent systems (BIS) and creating awareness of multimodal Al that improve natural language understanding and analyze diverse data streams, visual perception, and voice recognition to enhance user experiences. For instance, in June 2024, the University of Sheffield organized a Second Workshop on Multimodal AI to bring together researchers and practitioners from AI, data science, and various scientific and application domains to create awareness of multimodal AI. This workshop will feature four keynote speakers from academia and industry—Maria Liakata (Professor of NLP, Queen Mary University of London, Turing AI Fellow), Tian Xie (Principal Research Manager, Microsoft Research AI4Science), Nataliya Tkachenko (Generative AI Ethics & Assurance Lead, Lloyds Banking Group), and Adam Steventon (Director of Data Platforms, Our Future Health)—to discuss problems and difficulties, share experiences and solutions, and explore collaborations and future directions for multimodal AI.

Rising Adoption in the Healthcare Industry: Artificial intelligence is transforming the healthcare sector by improving diagnostics, personalizing treatment regimens, streamlining processes, and lowering costs. Healthcare organizations are using image-based AI models as diagnostic tools, which can speed up interpretation and lead to early disease identification. For instance, in September 2023, Paige AI, Inc. collaborated with Microsoft to develop the world's largest image-based AI models for digital pathology and oncology to fight cancer. The companies are engaged in developing a new AI model that is larger than any other image-based AI model existing today. Configured with billions of parameters, this model would assist in capturing the subtle complexities of cancer and serve as the foundation of next-generation clinical applications and computational biomarkers pushing the boundaries of oncology and pathology. Further, as stated in July 2024, the European Academies Science Advisory Council (EASAC) and the Federation of European Academies of Medicine (FEAM) are jointly working on projects and case studies to evaluate AI-incorporated healthcare products and services. Hence, a growing number of research and development activities related to the use of AI in the healthcare industry are fueling the market.

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Government Initiatives and Investments to Support Adoption of AI: Government initiatives toward the adoption of AI technology are driving the market. For instance, in January 2024, the European Commission (EU) announced the AI innovation package, which contains numerous initiatives to help entrepreneurs and SMEs in the region create trustworthy AI that adheres to EU principles and standards. EU also set the main GenAI4EU initiative that aims to increase the adoption of generative AI across the Union's key strategic industrial ecosystems. The initiative encourages the development of large open innovation ecosystems that foster collaboration between AI startups and deployers in the industrial and public sectors. Moreover, government and private organizations are increasingly investing in raising AI adoption in Europe. According to the European Parliamentary Research Service of March 2024, the EU and the UK attracted €9 billion (~US$ 9.35 billion) in private investment in AI technology. EU-based AI firms observed an investment of ~€32.5 billion (US$ 33.78 billion) from 2018 to the third quarter of 2023. These investments provide support to AI companies to assist them in developing and upgrading their AI solutions to expand their customer base in Europe. Similarly, the EU's Digital Europe program offers a total of €2.1 billion (approximately US$ 2.18 billion) in funding for AI-related projects during 2021–2027.

Geographical Insights: In 2024, North America led the market with a substantial revenue share, followed by Europe and Asia Pacific, respectively. Asia Pacific is expected to register the highest CAGR during the forecast period.

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Artificial Intelligence Market Segmentation, Applications, Geographical Insights:

• Based on component, the global artificial intelligence market is segmented into hardware, software, and services. The software segment held the largest market share in 2024.
• On the basis of organization size, the global artificial intelligence market is segmented into large enterprises and SMEs. The large enterprises segment held the largest market share in 2024.
• By industry vertically, the global artificial intelligence market is segmented into automotive, healthcare, manufacturing, retail and e-commerce, IT and telecommunications, BFSI, and others. The IT and telecom segment held a larger share of the market in 2024.

Key Players and Competitive Landscape:

The Artificial Intelligence Market is characterized by the presence of several major players, including:

• Accenture Plc
• Advanced Micro Devices Inc
• Google LLC
• International Business Machines Corp
• Intel Corp
• Microsoft Corp
• NVIDIA Corp
• Amazon Web Services Inc
• SAP SE
• SAS Institute Inc.

These companies are adopting strategies such as new product launches, joint ventures, and geographical expansion to maintain their competitive edge in the market.

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Artificial Intelligence Market Recent Developments and Innovations:

• SoftBank Corp. has entered into a strategic partnership with generative AI search startup Perplexity AI
• India's Advance in AI Regulation
• The Arm AI Partner Program brings partners together to collaborate and innovate solutions that help simplify AI deployment across multiple segments.

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Conclusion:

The global artificial intelligence market size is mainly supported by the rise in adoption across various industries, government initiatives, and investment to support the adoption of AI technology, and the burgeoning demand for multimodal AI are a few of the significant factors driving the global artificial intelligence market. Furthermore, increasing investments in industrial automation solutions and the growing popularity of agentic Al is likely to propel the demand for the artificial intelligence market in the future. Technological advancements and integration of advanced technologies such as machine learning, natural language processing (NLP), and robotic process automation (RPA); demand for generative Al; and development of explainable AI (XAI) and AI-powered cybersecurity solutions that reduce operating costs are expected to create opportunities for the market growth during the forecast period.

Asia Pacific region is likely to register the fastest growing CAGR during 2025-2031. This is mainly due to an upsurge in the need for customized AI-based solutions, manufacturers' focus on developing small language models and open source advancements, and an increase in research and development activities that also benefit the global artificial intelligence market. Moreover, significant benefits offered by AI include 24 × 7 availability, repetitive task automation, fewer human errors, more and faster data insights, reduced physical risks, and enhanced decision-making.

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