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The artificial intelligence (AI) in IoT market is estimated to grow by USD 27.08 billion at a CAGR of 30.59% between 2023 and 2028. The ability to analyze IoT data faster, using advanced analytics and machine learning algorithms, is driving market growth by enabling organizations to derive valuable insights and make informed decisions. The large-scale benefits of using IoT devices, such as improved efficiency, cost savings, and enhanced customer experiences, are also boosting market expansion by encouraging more organizations to adopt IoT solutions. Additionally, the potential for increased employee productivity through the automation of routine tasks and the provision of real-time data and insights is driving demand for IoT devices and applications. Overall, these factors are driving the widespread adoption of IoT technology across various industries and applications.
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The market share growth of the BFSI segment will be significant during the forecast period. IoT in BFSI allows devices to connect to the internet and one another. The adoption of AI in IoT in banks also enhances the traditional banking model and provides access to real-time data. The implementation of AI in IoT in financial companies saves a lot of time and money by gathering and transferring data. They also helps financial institutions improve their customer experience and better detect any fraudulent activity. Therefore, the abovementioned benefits will fuel the market growth during the forecast period.
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The BFSI segment was valued at USD 1.29 billion in 2018. The use of AI in IoT helps banks to leverage digitalization and sustain competition with FinTech players. These solutions are revolutionizing banking processes and the relationship between banks and customers. AI is expected to shape the future of the BFSI sector as it provides the power of advanced data analytics to fight against fraudulent transactions and improve compliance, all within seconds. These solutions helps banks manage huge volumes of data with speed and derive valuable insights for decision-making. Thus, the BFSI segment of the market is expected to witness steady growth during the forecast period.
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APAC is estimated to contribute 43% to the growth of the global market during the forecast period. Another region offering significant growth opportunities to companies is North America. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
In 2021, North America has the largest market share in the market. Being a pioneer in the early adoption of technologies across industries, North America is an attractive region for the market. It is brimming with some of the world's most advanced economies leading in data generation and consumption. The US will lead the North American region in terms of AI spending. As the investment and business communities deepen their understanding of AI, the AI investment and financing market becomes more rational, with reduced investment and financing frequency and increased investment amounts.
In North America, AI-based cybersecurity solutions are highly adopted by countries such as the US and Canada. With the increase in technological advances, there has been a rise in the number of cyberattacks in industries, such as retail, IT and telecom, and BFSI. This leads to an increase in the adoption of these solutions by industries. The increase in the number of connected devices and growth in the market has led to massive amounts of security-related data. The adoption of AI-based cybersecurity solutions has increased to protect such forms of data, thereby increasing AI in IoT solutions adoption in the region.
Artificial Intelligence (AI) in the Internet of Things (IoT) market is an evolving intersection of computer science and technology, where AI systems and algorithms are integrated with interconnected networks of physical devices. This integration enables models to learn from patterns in data generated by various processes and activities within the IoT ecosystem. Narrow AI, which focuses on specific tasks, is currently dominating this market, while General AI, capable of understanding and learning any intellectual task, is an upcoming evolutionary step. The AI in IoT market spans across various sectors, including Agriculture, Health, Buildings, Smart Cities, and People's lives. In Agriculture, AI is used for predictive analysis of crop yields, while in Health, it aids in remote patient monitoring and diagnosis. In Buildings, AI optimizes energy usage, and in Smart Cities, it enhances traffic management and public safety. Components of AI in IoT include hardware, software, and services. Hardware includes AI chips and sensors, while software includes AI algorithms and models. Services include AI consulting and implementation. The technology sector is adopting AI in IoT to enhance corporate strategies, improve work environments, and streamline processes. The integration of AI and IoT is a significant development in the Technology sector, with wireless networks and devices playing a crucial role in facilitating this connection. This intersection is set to revolutionize various industries and improve people's lives in numerous ways.
Analyzing IoT data faster is one of the key drivers notably driving market growth. The Internet of Things (IoT) refers to a network of devices, including vehicles and home appliances, equipped with electronics, software, sensors, actuators, and connectivity to connect, interact, and exchange data. This technology extends Internet connectivity beyond standard devices like desktops, laptops, smartphones, and tablets to a variety of standalone or non-connected physical devices and everyday objects. This expansion brings with it challenges related to managing large volumes of data, ensuring security and privacy, addressing interoperability issues, integrating with various business functions, leveraging edge computing, utilizing cloud analytic engines, and implementing AI technology and machine learning. IoT devices produce large volumes of data. Artificial Intelligence (AI) is particularly valuable in this context as it can help quickly derive insights from IoT data. It can identify flaws in sensors or devices to facilitate timely repairs or replacements. Sensors provide extensive information on various parameters like temperature, humidity, air quality, vibration, and sound. Machine learning can automatically recognize patterns and detect anomalies in the data generated by IoT devices. Leading AI companies in IoT solutions now offer integrated AI capabilities, including machine learning-based analytics
The growth in industrial automation is the primary trend in the market. The industrial environment is currently witnessing evolutionary changes with the rising automation of processes. The combination of physical and digital systems has improved Human Machine Interface (HMI) and enabled M2M communication. Industry 4.0 defines the entire life cycle of products where the manufacturing processes by smart machines are carried out on their own, smart robots coordinate with humans to assemble products, and driverless transport vehicles have started to operate logistics on their own. This requires a high degree of automation including control systems, networking technologies, and software. IoT devices fall under the category of control systems, and with the emerging trend of industrial automation, the demand for such devices is expected to only grow. Hence, such factors are expected to fuel the growth of artificial intelligence in IoT market during the forecast period.
The rise in privacy and security issues is the major challenge impeding market growth. Security is the foremost concern for individual consumers and enterprises purchasing IoT devices. Connecting the physical world to the digital world requires the highest security standards to minimize the impact of cybersecurity hacks. This is a major deterrent for the market as most people are not totally confident about integrating such technologies into the different devices they own. For instance, hacking smart meters within an energy grid can result in major blackouts. A case of a hacked refrigerator was registered in the US. This hack exposed the e-mail accounts and credentials of the owners and affected more than 1,000 other devices. Thus, the vulnerability of devices connected to the Internet, in terms of privacy and security concerns, must be dealt with before the large-scale commercialization of IoT devices.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
SAS Institute Inc. - The company offers AI in IoT solutions such as Uptake Federal. They offer advanced software services for a wide range of industries, such as healthcare, education, insurance, life science, and others.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
Artificial Intelligence (AI) is revolutionizing the Internet of Things (IoT) market by enabling advanced functionalities in interconnected networks of physical devices. AI systems use algorithms and models to identify patterns in real-time data from sensors and process them for various applications. Two main types of AI are used in IoT: Narrow AI, which is designed to perform specific tasks, and General AI, which can learn and adapt to various situations. AI in IoT relies on machine learning paradigms such as supervised learning, unsupervised learning, and reinforcement learning. Machine learning algorithms analyze historical usage patterns to detect anomalies and improve system performance. AI models can be trained on raw data and stored in cloud-based platforms for data processing. Computer science tools like Total Phase's USB, eSPI, and host adapters, as well as protocol analyzers like Aardvark I2C, Promira Serial Platform, Beagle I2C, and CAN tools, are essential for developing and testing AI systems in IoT. These tools enable embedded engineers to analyze data exchange between devices and ensure seamless communication. In summary, AI is transforming the IoT market by providing advanced functionality, real-time data processing, and anomaly detection. Computer science tools and algorithms play a crucial role in developing and implementing AI systems in IoT applications.
Market Scope |
|
Report Coverage |
Details |
Page number |
171 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 30.59% |
Market growth 2024-2028 |
USD 27.08 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
23.51 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
APAC at 43% |
Key countries |
US, China, Germany, Japan, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AIKairos Pvt. Ltd., Alphabet Inc., Amazon.com Inc., Arundo Analytics Inc., Autoplant System India Pvt. Ltd., Avnet Inc., C3.ai Inc, General Electric Co., Hitachi Ltd., Imagimob AB, International Business Machines Corp., Microsoft Corp., Oracle Corp., PTC Inc., Renesas Electronics Corp., Salesforce Inc., SAP SE, SAS Institute Inc., Thingstel Tech Solutions India Pvt. Ltd., and Uptake Technologies Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for Market forecasting period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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