Artificial Intelligence Market in the Industrial Sector Analysis North America, APAC, Europe, Middle East and Africa, South America - US, Saudi Arabia, China, Germany, UK - Size and Forecast 2024-2028

Artificial Intelligence Market in the Industrial Sector Forecast 2024-2028

The artificial intelligence market in the industrial sector size is forecast to increase by USD 29.29 billion, at a CAGR of 38.86% between 2023 and 2028. The market's growth hinges on numerous factors, with significant contributions from the burgeoning adoption of digital twin technology across industries. This trend is complemented by the continuous evolution of industrial IoT and the seamless integration of big data, fostering a data-driven approach in various sectors. Additionally, the increasing demand for predictive maintenance solutions is reshaping industrial practices and enhancing operational efficiencies. These trends collectively underscore the pivotal role of advanced technologies in shaping the market landscape, driving innovation, and enabling businesses to make data-informed decisions for sustainable growth and competitive advantage in today's dynamic business environment. Our report examines historic data from 2018 - 2022, besides analyzing the current and forecasts market scenario.

Moreover, the market in North America is fuelled by the reshoring of manufacturing from overseas back to the US and Mexico. Alphabet Inc. offers AI through Google Cloud to provide organizations with the best infrastructure, platform, industry solutions, and expertise to enable them to use new digital technologies and information to transform their businesses. Amazon.com Inc. offers artificial intelligence services such as SageMaker and Rekognition for industrial sectors, enabling tasks such as predictive maintenance and quality control through machine learning and image analysis.

Market Forecasting and Size

Market  Forecast 2024-2028

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Market Dynamic

The market is driven by several key factors. Big Data and machine learning technologies enable organizations to analyze vast amounts of data for actionable insights. The Internet of Things (IoT) integration with AI enhances operational efficiency through real-time monitoring and optimization. Natural Language Processing (NLP) and speech processing technologies improve communication and decision-making processes. Robotics and computer vision systems are revolutionizing industrial automation. However, challenges such as data privacy concerns, AI bias, and the complexity of integrating artificial intelligence with existing systems remain significant hurdles for widespread adoption in the industrial sector. Our researchers studied the market research and growth data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.

Key Market Driver - Digital twin technology gaining traction in industries

Digital twin technology, which generates virtual replicas of physical assets or processes, is gaining popularity in the industrial sector.  In addition, artificial intelligence-powered digital twins leverage real-time data and simulation capabilities to model and optimize industrial systems, predict behavior, and enable better decision-making and performance optimization. Furthermore, digital twins facilitate product development and innovation by providing insights into product performance, behavior, and usage.

Moreover, artificial intelligence algorithms analyze data from digital twins to identify opportunities for product optimization, customization, and innovation. In addition, by simulating product designs and testing different configurations virtually, companies can accelerate the development process, reduce costs, and bring new products to market faster. In the automotive industry, digital twins are employed to simulate and optimize vehicle designs before physical prototypes are built. Furthermore, automotive OEMs create digital twins of vehicle models, components, and systems to assess their performance, functionality, and manufacturing feasibility. Hence, such factors are driving the market during the forecast period.

Significant Market Trends - Emergence of IIoT

The development of IIoT and technological improvements will fuel the adoption of artificial intelligence in the industrial sector. In addition, the high demand and use of smart devices, wireless, and cloud technology will influence the future of industrial robots, such as collaborative robots, in terms of the range of utility and mode of operation.

Moreover, with rising competition, vendors are offering attractive options, such as services and control modules, through smart devices and Wi-Fi technology for controlling equipment from remote locations. In addition, these devices offer flexibility in use and have a user-friendly graphical user interface (GUI). Furthermore, they allow a single human operator to guide and control various operations simultaneously. Hence, such factors are driving the market during the forecast period.

Major Market Challenge - Privacy and security issues

AI software processes huge volumes of data that are extracted using different software applications. In addition, as the data collected is highly sensitive, data ownership, sharing, and security are of high importance. Furthermore, this implies that it is essential that market vendors incorporate proper authorization techniques to ensure that the privacy and security of the information that is uploaded remain intact.

Moreover, industrial artificial intelligence systems are susceptible to cybersecurity threats such as data breaches, ransomware attacks, and malware installations. In addition, attackers may exploit vulnerabilities in AI algorithms, data pipelines, or communication networks either to gain unauthorized access to industrial systems or to disrupt their operations. Furthermore, industrial AI systems may be subject to industry-specific regulations and standards that govern data privacy, cybersecurity, and product safety. Hence, such factors are hindering the market during the forecast period.

Market Segmentation by Application, End-user and Geography

The market is experiencing rapid growth and innovation, driven by key technologies such as Big Data, the Internet of Things (IoT), machine learning, natural language processing (NLP), speech processing, generative AI, robotics, and computer vision. These technologies are revolutionizing various aspects of industrial operations, including planning, scheduling & optimization, technology and communication, and real-time monitoring. AI is extensively used for quality control, supply chain optimization, intelligent robotics, and big data analytics in industrial settings. Advanced AI models like ChatGPT and AI art generators are contributing to content creation and creative processes. Techniques such as Federated Learning and Explainable AI are enhancing decision-making processes, while Edge AI is bringing intelligence to the edge of networks, enabling faster and more efficient operations. The integration of AI in the Industrial Sector is driving significant advancements in automation, efficiency, and innovation, making businesses more competitive and capable of addressing complex challenges in today's dynamic market landscape.

Application Segment Analysis:

The remote monitoring and predictive maintenance segment is estimated to witness significant growth during the forecast period. Remote monitoring leverages AI to enable safer working environments in industrial facilities by facilitating operators to monitor hazardous conditions or potentially dangerous equipment from a distance. In addition, this reduces the need for personnel to be physically present in high-risk areas, mitigating safety hazards and minimizing the risk of accidents or injuries.

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The remote monitoring and predictive maintenance segment was the largest segment and was valued at USD 472.80 million in 2018. Moreover, AI-powered remote monitoring systems enable the real-time monitoring of equipment, processes, and facilities from any location. In addition, this allows operators to identify issues promptly, assess performance, and make informed decisions without the need to be present physically. Furthermore, it is expected that more manufacturers will adopt AI solutions for the efficient prediction and prevention of machine failure, using machine log data from multiple sources, which, in turn, will help reduce maintenance costs. Hence, such factors are fuelling the growth of this segment which in turn drives the market during the forecast period.

End-user Segment Analysis:

Based on the end-user, the market has been segmented into process industries and discrete industries. The process industries segment will account for the largest share of this segment. One of the main process industries is the oil and gas and power sectors are expected to see a surge in the adoption of AI for the management of the supply chain, design team, production, and quality control while ensuring minimal environmental impact. In addition, players in these sectors are increasingly adopting technologies that can ensure a sustainable energy ecosystem with an appropriate mix of renewable energy sources and fossil fuels. Moreover,  the AI software uses predictive algorithms to ensure that players in these sectors can conduct demand management by using data from solar panel sensors and wind turbines, along with atmospheric data to improve equipment efficiency and forecasting. Furthermore, AI algorithms analyze seismic data to identify potential drilling locations more accurately and efficiently, reducing exploration costs and risks. Hence, such factors are fuelling the growth of this segment which in turn drives the market during the forecast period.

Regional Analysis

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North America is estimated to contribute 37% to the growth by 2028.  Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. The growth of the market in North America has been sluggish, and the key reasons are that the goods manufactured in the US have always been more expensive for the foreign market due to the strong currency rates, along with the presence of major cutbacks in the energy sector. In addition, the market in North America is expected to gain traction as the reshoring of manufacturing from overseas back to the US and Mexico is expected to take place in the coming years. Moreover, another factor that will drive the market is the increased propensity of manufacturers in other markets to establish smart factories in North America to ensure that they are closer to the end-user market and can undertake better customization of products as per end-user preferences. Furthermore, the automotive industry is stabilizing in the US, and automotive OEMs are focusing on integrating new features in their EVs, which is increasing the demand for AI. Hence, such factors are driving the market in North America during the forecast period.

Who are the Major Market 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.

H2O.ai Inc: The company offers Artificial Intelligence to various industries such as Human System Interaction, Knowledge Management and Big Data, Computer Vision, Machine Learning, and others.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:

Aquant, Automation Anywhere Inc., FANUC Corp., Intel Corp., International Business Machines Corp., Landing AI, Micron Technology Inc., Microsoft Corp., Mitsubishi Electric Corp., NVIDIA Corp., Oracle Corp., Rockwell Automation Inc., SAP SE, Siemens AG, Sight Machine, Wipro Ltd., and General Electric Co. 

Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Segment Overview

The market analysis and report forecasts market growth by revenue at global, regional & country levels and provides a market growth analysis of the latest trends and growth opportunities from 2018 to 2028. 

• Application Outlook
  • Remote monitoring and predictive maintenance
  • Supply chain management
  • Production planning
  • Quality control
  • Others
• End-user Outlook 
  • Process industries
  • Discrete industries
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is experiencing a transformative wave driven by Artificial Intelligence (AI), the Internet of Things (IoT), and advanced technologies like Natural Language Processing (NLP), Robotics, and Generative AI. These innovations are optimizing operations in planning, scheduling & optimization, transportation, logistics, healthcare, and financial services. Intelligent systems such as virtual assistants, deep learning, and recommendation systems are enhancing productivity and decision-making. Companies are leveraging big data analytics and cutting-edge AI algorithms for supply chain optimization, energy management, and autonomous vehicles. AI art generators and content creation tools are reshaping creative industries, while Federated Learning and Explainable AI are driving advancements in AI governance and ethical AI practices. The sector also witnesses innovations in Edge AI, cybersecurity, and real-time monitoring, reinforcing the importance of AI-driven decision-making, quality control, and machine learning techniques.

Moreover, industry-wide collaborations for data sharing and adherence to digital data standards are fostering exponential growth and industry-wide standards in AI adoption, making AI a cornerstone of future industrial advancements. The market is witnessing a profound transformation driven by Artificial Intelligence (AI). Speech processing, technology and communication, and transportation and logistics are being revolutionized by AI-powered solutions. In travel and hospitality, AI is enhancing customer experiences through personalized recommendations and efficient operations. Search algorithms and ad tech networks are leveraging AI for targeted advertising and improved user engagement. Advanced technologies from companies like Advanced Micro Devices are powering industrial machines, smart machines, and intelligent robotics. AI-driven guided systems and human-machine interfaces are optimizing processes in packaging, food processing, mining, and semiconductor manufacturing. The proliferation of IoT devices and advancements in AI algorithms are enabling process optimization and cost-efficiency improvements. Tools like ChatGPT are aiding in content generation and enhancing communication.

Market Scope
Report Coverage	Details
Page number	187
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 38.86%
Market Growth 2024-2028	USD 29.29 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	35.89
Regional analysis	North America, APAC, Europe, Middle East and Africa, and South America
Performing market contribution	North America at 37%
Key countries	US, Saudi Arabia, China, Germany, and UK
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Alphabet Inc., Amazon.com Inc., Aquant, Automation Anywhere Inc., FANUC Corp., H2O.ai Inc., Intel Corp., International Business Machines Corp., Landing AI, Micron Technology Inc., Microsoft Corp., Mitsubishi Electric Corp., NVIDIA Corp., Oracle Corp., Rockwell Automation Inc., SAP SE, Siemens AG, Sight Machine, Wipro Ltd., and General Electric Co.
Market dynamics	Parent market 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.

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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 2028
• Precise estimation of the market growth and trends and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Market growth and forecasting across North America, APAC, Europe, Middle East and Africa, and South America
• A thorough market analysis and report of the market’s competitive landscape and detailed information about companies
• Comprehensive market report analysis of factors that will challenge the growth of market  companies

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