Artificial Intelligence (AI) Market in the Education Sector by End-user, Learning Method and Geography-Forecast and Analysis 2023-2027

Artificial Intelligence (AI) Market in the Education Sector Forecast 2023-2027

The Artificial Intelligence (AI) Market in the Education Sector size is forecast to increase by USD 1.10 billion at a CAGR of 41.14% between 2022 and 2027. The market's expansion hinges on multiple factors, notably the rising focus on personalized learning trajectories facilitated by Artificial Intelligence (AI). There is a burgeoning need for Intelligent Tutoring Systems (ITS) driven by technological advancements and educational trends. The extensive array of artificial intelligence applications further amplifies market growth, encompassing sectors beyond education. These include healthcare, finance, retail, and more. The adaptability and scalability of artificial intelligence solutions contribute significantly to its widespread adoption. Additionally, artificial intelligence's ability to analyze vast datasets and derive actionable insights enhances decision-making processes across industries. As organizations increasingly recognize AI's transformative potential, investments and innovations in AI technologies continue to surge, fostering a dynamic and thriving market landscape.

What will be the size of the Artificial Intelligence Market In The Education Sector Market During the Forecast Period?

Request Free Sample in PDF

Market Segmentation

It also extensively covers market segmentation by end-user (higher education and K-12), learning (learner model, pedagogical model, and domain model), and geography (North America, Europe, APAC, South America, and Middle East and Africa). This report also includes an in-depth analysis of drivers, trends, and challenges.

Who are the Major Artificial Intelligence Market in the Education Sector Companies?

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.

2U Inc. - The company offers artificial intelligence in education through its subsidiary Querium.

The artificial intelligence market in the education sector market report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:

• Alphabet Inc.
• Amazon.com Inc.
• Brainly
• Carnegie Learning Inc.
• Century Tech Ltd.
• Cognii Inc.
• Cognizant Technology Solutions Corp.
• DreamBox Learning Inc.
• Fishtree Inc.
• International Business Machines Corp.
• Jenzabar Inc.
• John Wiley and Sons Inc.
• Kaltura Inc.
• LAIX Inc.

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.

Regional Insight

North America is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. 

View the Bestselling Market Report Instantly

The market in North America is anticipated to rise steadily during the forecast period, owing to technological advancements and the continuous implementation of technology in the education sector. The US and Canada dominate the artificial intelligence market for education in the region. Multiple universities in the US are continuously opting for research on artificial intelligence such as Stanford University and Duke University. Universities in the US also receive adequate funding for research on AI.  However, Technological advancements in AI such as ITS, adaptive studying, and virtual tutors are increasing the growth of the market. Universities are opting for in-house research to understand ways in which AI can be practically implemented in the education sector. For instance, the Institute for Creative Technologies at the University of Southern California (USC) has several projects exploring the implementation of Captivating Virtual Instruction for Training (CVIT). It is a distributive coaching strategy that aims at integrating live classroom methods with appropriate virtual technologies that include virtual facilitators, augmented reality, intelligent tutors, and other remote coaching technologies. In Canada, extensive research on AI technology has paved the way for the growth of the market. Therefore, the regional market in this region is expected to grow during the forecast period.

Market Segmentation by End-User

The market is revolutionizing traditional learning methods. Big data analytics and Machine learning techniques enable personalized learning experiences tailored to individual student needs. Robotics and AI art generators enhance creativity and problem-solving skills among students. The Internet of Things (IoT) facilitates smart classrooms and interactive learning environments. ChatGPT and Natural language processing tools aid in language learning and communication skills development. Educational institutions leverage AI Licensing and Intellectual Property vendors for innovative AI solutions and AI Technical Consulting vendors for seamless integration. Algorithms and Deep learning techniques power adaptive learning platforms, while Data availability and Data quality ensure accurate insights for educational improvement. Addressing Bias and Inaccurate output is crucial for ethical AI adoption in education. Software providers and Cloud providers offer AI-powered educational platforms, while Hardware and devices providers deliver cutting-edge technologies for interactive learning experiences. Network providers and Security providers safeguard data privacy and cybersecurity.

The market share growth by the higher education segment will be significant during the forecast period. The artificial intelligence market in the higher education sector is expected to record a steady growth rate globally during the forecast period. 

Get a glance at the market contribution of various segments View PDF Sample

The higher education segment was valued at USD 47.26 million in 2017 and continued to grow until 2021. Colleges and universities globally are increasingly opting for tools that improve the quality of education and ensure that students are provided with an experiential studying environment. Universities are increasingly offering personalized coaching to students by delivering content using artificial intelligence solutions. However, to provide experiential educating environments, universities are increasingly using artificial intelligence solutions such as Watson by IBM to automate various administrative tasks at a lower cost and with fewer errors. Universities and institutions are focusing on the use of artificial intelligence as virtual assistants that can tutor and guide students and teachers respectively.

For instance, Carnegie Mellon University has been working on artificial intelligence-based cognitive tutors for several years as part of its Open Learning Initiative (OLI). The increase in federal funding toward R&D in the field of artificial intelligence, the increase in the number of partnerships and collaborations across the world, and the increasing emphasis on chatbots and artificial intelligence as virtual assistants and ITS in universities will drive the growth of the market in the education sector during the forecast period.

Market Dynamics

The market is driven by Big data analytics for personalized learning, Machine learning techniques for adaptive platforms, and Natural language processing for communication enhancement. Trends include Robotics for interactive learning, ChatGPT for language skills, and AI art generators for creative expression. Challenges like Data availability and Quality, along with addressing Bias and Inaccurate output, are key areas. Providers such as Software, Service, and Cloud vendors play pivotal roles amid the evolving market and advancements in Computer science and AI algorithms. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The growing emphasis on customized learning paths using artificial intelligence is notably driving the market growth. The use of chatbots is becoming more and more popular in schools and universities. In addition to storing, processing, and exchanging information with students, Chatbots uses advanced artificial intelligence, machine learning, and deep learning technologies. They are capable of performing a wide range of tasks, such as talking to students and replying to questions. They'll be able to perform a wide range of tasks. They might also be used for the purpose of evaluating and correcting assessments made by students.

However, chatbots can keep track of the subjects learned by students using deep learning technology, identify the time during which a student may have forgotten the learned concepts, and repeat the old lessons in varied time intervals. They are increasingly being used in some colleges and universities to identify the study patterns of students and enable the teacher to offer personalized learning pathways to students. Such factors will increase the demand for chatbots in the education sector during the forecast period.

Significant Market Trends

The increased emphasis on chatbots is the key trend shaping the artificial intelligence market in the education sector. The use of chatbots is being promoted more and more by schools and universities. The chatbots use artificial intelligence, machine learning, and deep learning technology for the storage, processing, and transmission of information to students. A Chatbot might function in numerous ways, including talking with students and answering questions. They have a broad range of tasks to perform. They may also be used as a way of assessing and correcting the assessment made by students. 

However, chatbots can assist students in learning at spaced intervals. It can also keep track of the subjects learned by students using deep learning technology, identify the time during which a student may have forgotten the learned concepts, and repeat the old lessons in varied time intervals. Chatbots are increasingly being used in some colleges and universities to identify the study patterns of students and enable the teacher to offer personalized learning pathways to students. They function as virtual assistants to both students and teachers. Hence, these factors will increase the demand for chatbots in the education sector during the forecast period.

Major Market Challenge

The high cost associated with AI may hinder market growth. As new technologies emerge, budgets will have to increase to cover expenses. Apart from the installation of artificial intelligence software, schools and colleges will need to consider the cost of maintaining the software. Therefore, for installation, these institutions require significant funding and investments and extensive research on its applicability. However, there is steady growth in the availability of artificial intelligence solutions, and the high cost of developing and implementing them hinders their adoption in many public schools and colleges.

Moreover, a few government initiatives and the steady decline of state and local government funding further aggravate the problem. The high cost associated with artificial intelligence restricts schools from providing students with better learning environments and resources. artificial intelligence-based education materials, such as smart content and IAL systems are also costly to procure. The high R&D costs associated with the development of AI solutions, high capital expenditure, and the risk of product sustainability limit the demand for artificial intelligence solutions, thereby restricting the entry of companies into the market. Thus, the high cost of AI is expected to hamper the growth of the market in the education sector during the forecast period.

Customer Landscape

The report includes the adoption lifecycle of the market, from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on market 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

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook 
  • Higher education
  • K-12
• Learning method Outlook 
  • Learner model
  • Pedagogical model
  • Domain model
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile

Market Analyst Overview

The market is experiencing significant growth and transformation due to advancements in various technologies such as Big data analytics, Robotics, and the Internet of Things (IoT). Educational institutions are integrating AI-driven solutions like ChatGPT for interactive learning experiences and leveraging AI art generators for creative content development. A comprehensive technology roadmap is essential for the successful implementation of AI in education, incorporating Generative AI tools, ethical considerations, and regulatory compliance. AI vendors specializing in AI Licensing and Intellectual Property and AI Technical Consulting are crucial partners in shaping AI strategies for educational institutions.

Moreover, cloud providers offer scalable and flexible infrastructure for AI applications, while hardware and device providers deliver advanced AI systems. Network providers ensure reliable connectivity, and security providers address concerns related to data protection and privacy. The global artificial intelligence market continues to influence the education sector, with AI advancements in computer science, artificial intelligence algorithms, and emerging technologies like supercomputers and quantum computers. AI's deep learning techniques and machine learning algorithms enhance learning experiences and educational outcomes.

Furthermore, ethical and regulatory concerns, including privacy issues, are carefully addressed in AI deployments. Porter’s five forces analysis aids in understanding market dynamics, while enterprise size, business function, and industry vertical dictate AI adoption strategies. AI applications in education span across computer vision, IT & telecommunication, retail & e-commerce, BFSI, manufacturing, agriculture, and media & entertainment industries. Collaborations with tech giants like Netflix and Amazon demonstrate AI's anthropic potential in fostering collaboration and innovation in the education sector.

Moreover, the adoption of autonomous artificial intelligence and sophisticated algorithms empowers educators with valuable insights into student performance through machine learning techniques and natural language processing. However, challenges such as data availability, data quality, and addressing bias to avoid inaccurate output remain key focal points. AI solutions cater to various educational functions, from AI-driven automation in administrative tasks to enhancing customer service and personalized learning experiences. Technologies like Edge AI and Edge computing enable efficient data processing and analytics, ensuring privacy and security in educational environments. The market is driven by various factors, such as innovative business models and partnerships with AI Licensing and Intellectual Property vendors. AI Technical Consulting vendors play a crucial role in implementing AI solutions tailored to educational needs. Educational institutions rely on AI-powered software providers and service providers for seamless integration and management of AI technologies.

Market Scope
Report Coverage	Details
Page number	165
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 41.14%
Market growth 2023-2027	USD 1.10 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	33.25
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 43%
Key countries	US, Canada, China, UK, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	2U Inc., Alphabet Inc., Amazon.com Inc., Brainly, Carnegie Learning Inc., Century Tech Ltd., Cognii Inc., Cognizant Technology Solutions Corp., DreamBox Learning Inc., Fishtree Inc., International Business Machines Corp., Jenzabar Inc., John Wiley and Sons Inc., Kaltura Inc., LAIX Inc., McGraw Hill LLC, Microsoft Corp., n2y LLC, Pearson Plc, and Quantum Adaptive Learning LLC
Market dynamics	Parent market analysis, Market forecasting, market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast 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.

View PDF Sample

What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market  size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough market forecast analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market growth and forecasting analysis of factors that will challenge the growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements. Get in touch