AI-as-a-Service Market Size (2024 - 2029)

Artificial Intelligence as a Service (AIaaS) Market Analysis

The AI-as-a-Service Market size is estimated at USD 15.09 billion in 2024, and is expected to reach USD 72.22 billion by 2029, growing at a CAGR of 36.78% during the forecast period (2024-2029).

With the increasing number of enterprises and competition, companies are rigorously trying to integrate artificial intelligence (AI) technology into their application, business, analytics, and services. Moreover, companies are trying to reduce their operational cost to increase profit margins, due to which Artificial Intelligence-as-a-Service (AIaaS) is gaining more prominence over the cloud. Notably, companies are more interested in cloud-based machine learning, which helps in experimenting with their offerings.

• The rising trend of multi-cloud functioning and the growing need for cloud-based intelligence services are also increasing the demand for AI as a service. According to IBM, by 2021, 98% of the organization's plans will adopt multi-cloud architectures, with only 41% having a multi-cloud management strategy and just 38% having procedures and tools to operate a multi-cloud environment. This creates a massive opportunity for AI services.
• Furthermore, the IBM AI adoption index 2022 states, " A tipping point has been reached in using artificial intelligence (AI) and its effects on businesses and society. The adoption rate of AI globally increased significantly and is at 35%, up four points from the previous year. And the usage of AI is nearly universal in several sectors and nations. 
• Organizations worldwide are quickly gaining new advantages and efficiencies from AI thanks to new automation capabilities, improved usability and accessibility, and a more comprehensive range of tried-and-true use cases. Virtual assistants and other ready-made corporate solutions like IT incorporate AI into their operations. The fact that 44% of firms are working to integrate AI into current apps and processes supports the argument that accessibility is important.
• Many government organizations, especially in emerging economies, also understand the benefits and power of AI; hence, they are extensively promoting AI-based infrastructure development. For instance, Niti Aayog in India launched a national program on AI, including R&D, with increased budget allocation for Digital India to promote AI, machine learning, 3D printing, and other technologies.

Artificial Intelligence as a Service (AIaaS) Industry Segmentation

Artificial Intelligence-as-a-Service (AIaaS) accounts for a third-party offering to outsource artificial intelligence. It allows companies or end-users to experiment with AI for various purposes by limiting initial investment and lowering risk.

The artificial intelligence-as-a-service (AIaaS) market is segmented by type of cloud (public, private, hybrid), by organization size (small and medium enterprises, large enterprises), by end-user industry (BFSI, retail, healthcare, IT and telecommunications, manufacturing, energy), and by geography (North America, Europe, Asia-Pacific, Latin America, the Middle East, and Africa). The market sizes and forecasts are provided in terms of value in USD for all the above segments.