AI Governance Market Size, Share & Trends Analysis Report By Component (Solution, Services), By Deployment (On-Premises, Cloud), By Organizational Size (Large Enterprise, SMEs), By Vertical, By Region, And Segment Forecasts, 2023 - 2030

AI Governance Market Size & Trends

The global AI governance market size was valued at USD 124.3 million in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 35.6% from 2023 to 2030. The market for artificial intelligence (AI) governance is expanding due to several factors, including rising regulatory and legal requirements, industry-specific considerations, the emergence of AI governance consulting services, and rising demand for explainable AI. These factors also include rising awareness of AI’s potential risks and challenges. As its usage spreads across sectors, there is rising awareness of the possible hazards and difficulties connected with AI, such as algorithmic bias, privacy problems, and safety risks. To ensure the appropriate and ethical development and use of AI, businesses, and governments are spending more and more on AI governance.

There is a rising need for AI governance solutions to handle AI systems' ethical, legal, and societal ramifications as it becomes more common in many industries. As a result, platforms, and tools for AI governance have increased, including explainable AI (XAI) solutions, tools for bias detection and reduction, and frameworks for AI ethics. Several organizations are integrating AI governance into their business risk management frameworks to address the potential risks and liabilities of AI systems. It entails identifying and evaluating the risks associated with AI, putting controls and governance mechanisms in place, monitoring risk levels associated with AI, and reporting those risks.

The application of AI to reduce gender inequality and discrimination opens attractive potential in the global AI governance Market. The growing number of government attempts to utilize AI technology, modernize data warehouse architecture and bridge the ethical-accountability gap are the few significant factors propelling the growth of the global AI governance market. The proactive customer experience provided by AI-assisted backend process automation, which eliminates human errors, propels AI growth in the BFSI industry. Using chatbots and robot advisers for financial products and smart wallets is one of the additional factors impacting the industry's growth.

Component Insights

The solution segment dominated the market in 2022 with a market share of 65.03%. Owing to the existence of well-diversified market competitors, the solution sector is also expected to dominate the segment market throughout the projection period. To meet the increasing customer demand across several end-user industry verticals, such suppliers are concentrating on offering fresh, creative solutions continuously in step with technological advancement. For instance, in October 2021, Datatron announced an improvement to their MLOps and Al governance solution, which makes it simple for businesses to catalog, operationalize, monitor, and control Al/ML models.

Owing to the rising demand for Al governance solutions, which has increased demand for software integration services, installation services, deployment, maintenance, and upgrade services, the service segment also have considerable growth soon. The complexity of implementing Al governance systems and software and the demand for integrating them into customers' IT infrastructures will fuel the expansion of integration services. Businesses are developing new AI governance training and education programs to assist individuals and organizations in understanding AI's ethical and legal consequences. For instance, in 2021, Intel unveiled its educational program in collaboration with the Central Board of Secondary Education (CBSE) for the basic understanding of Artificial intelligence (AI) for Citizens, which offers free online courses on AI ethics and ethical AI development.

Deployment Type Insights

The on-premises segment dominated the market in 2022 with a market share of 53.8%. Data governance, explainable AI, edge computing, integration with DevOps workflows, scalability, and flexibility are some of the main trends in the on-premises AI governance market that are driving the industry's growth. These developments show the rising significance of AI governance and the requirement for businesses to manage the governance of their AI systems in a scalable, adaptable, and open way. Additionally, the need for a traditional on-premises environment that offers a single monolithic network with suitable security measures is projected to soon lead to considerable development in the on-premises category. Although the use of cloud solutions has grown over time, effective security measures are still required to safeguard user data and applications.

There are numerous benefits of employing, the cloud is predicted to drive the global market during the forecast period. Implementation of Al governance in the cloud and accurate asset allocation are some of the significant advantages of cloud-based services. With the help of this, users may remotely audit and check on the adherence to current policies and IT standards outlined in contracts for services with Cloud service providers. Cloud service providers rapidly include AI governance tools into their platforms to fulfill the rising need for moral and responsible AI. For instance, In December 2021, Microsoft announced the introduction of responsible AI capabilities in its Azure cloud platform, which include tools for bias detection and model interpretability.

Organization Size Insights

The large enterprise segment dominated 2022 with a market share of 71.6%. Businesses are focusing more on data privacy and security as they want to ensure that their AI systems protect sensitive information. Furthermore, as large organizations become more susceptible to cyberattacks and other security issues, integrating AI governance to reduce risk is projected to rise, promoting market growth in this sector. Consulting companies have teamed with AI governance solution vendors to deliver complete AI governance services to their clients. Large enterprises have been acquiring smaller AI governance startups to expand their capabilities in this area. For Instance, in July 2020, IBM acquired WDG Automation, a firm specializing in AI governance and compliance. With this acquisition, IBM's extensive AI-infused automation capabilities, which span business processes and IT operations, are further advanced.

The market for AI governance in small- and medium-sized businesses (SMEs) is anticipated to develop quickly throughout the anticipated period. Some reasons in the SME market that drive the category's growth include the rising desire for scalable, inexpensive solutions that may assist SMEs in ensuring responsible, ethical, and transparent usage of artificial intelligence. SMEs might also require additional resources to create and maintain their AI governance frameworks. Cloud-based solutions from AGaaS providers let SMEs apply best practices in AI governance without making significant infrastructure expenditures.

Vertical Insights

The Government and Defense segment dominated the market in 2022 with a share of approximately 19%. Several trends in assuring the appropriate, ethical, and transparent use of AI in different areas, including healthcare & life sciences, are propelling market expansion. AI use in healthcare and life sciences presents privacy and data security issues since these sectors deal with sensitive patient data. Therefore, there is an increasing focus on ensuring that AI systems in these industries abide by data privacy laws and are protected from potential cyber threats. Healthcare professionals also employ AI to help with diagnosis and therapy. However, applying AI in these situations raises questions about bias and accuracy, so it's crucial to ensure the systems are properly validated and trained before being applied in clinical settings.

Autonomous cars are one of the domains where AI governance solutions are expected to be necessary. The fact that several projects are working on creating self-driving cars is a crucial factor propelling the growth of this market. Like the emergence of AI-enabled hardware, specialized GPUs have significantly increased the potential to enable and improve self-driving technologies and AI algorithms. Additionally, crucial AI characteristics, including enhanced processing and decision-making capabilities, have strengthened self-control, self-regulation, and self-actuation, which have expanded the usage of AI in the defense, military, and government sectors. Some advantages of AI techniques include their development to increase the accuracy of target recognition in complex conflict circumstances.

Regional Insights

The North American region accounted for the highest share of the market at 31.93% in 2022. North America is expected to capture a significant share due to the increased use of artificial intelligence (Al) by commercial and governmental organizations is responsible is one of the main factors propelling the market growth. In the last several years, American legislators and government organizations have been creating Al and automated systems plans and regulations to balance limiting the negative effects of Al technology and promoting healthy competition and advances. Additionally, early adoption of technologies like machine learning by developed countries like the U.S. and Canadian businesses is anticipated to fuel market expansion in the North American area.

Europe is another critical market for AI regulation, with a heavy emphasis on data privacy and ethical AI. The General Data Protection Regulation (GDPR) and the AI Act, which aim to address data privacy, prejudice and discrimination, and algorithmic transparency, are some recent rules of the EU that have been adopted or proposed. Additionally, there has been an increased emphasis on creating frameworks and norms for AI ethics, with groups like the European Alliance and the high-level expert group on AI leading the charge. Moreover, Several European nations have created AI governance ethical frameworks. For instance, the UK government has released an AI Code of Conduct that outlines a few principles for the moral use of AI, such as justice, accountability, and openness.

Key Companies & Market Share Insights

The industry is highly competitive due to the large number of major competitors. Agreements, expansions, partnerships, and joint ventures are all used by players. They are developing new products at faster speeds and enhanced features to diversify their product line and keep a commanding market share. For instance, in December 2021, Amazon Web Services, Inc. partnered with Meta, an American multinational technology corporation, to supply cloud services to AWS. Through this partnership, both businesses would work to improve how users of PyTorch on AWS operate their instances as well as how developers build, train, deploy, and use machine learning and artificial intelligence models.

In another instance,In February 2023, Accenture and Google Cloud collaborated to assist merchants in modernizing their operations. Customers will benefit from this partnership's improved data organization and real-time access to their most critical supply chain indicators, such as sales, inventory, logistics, and procurement. Retailers will have the ability to do demand forecasting, enhance inventory planning, and create supply chain segmentation strategies. Some prominent players in the global AI governance market include:

• ABB Ltd

• DXC Technology Company

• IBM Corporation

• Infosys Ltd

• Microsoft Corporation

• NTT Data

• Oracle Inc

• SAP SE

• Siemens SA

• Tata Communication Services (TCS) Ltd

• TIBCO

AI Governance Market Report Scope

Global AI Governance Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global AI governance market based on component, deployment, organization size, vertical, and regions.

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Solution

  • Services

• Deployment Type Outlook (Revenue, USD Million, 2017 - 2030)

  • On-Premises

  • Cloud

• Organization Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprise

  • SMEs

• Vertical Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • Government and Defense

  • Healthcare and life sciences

  • Media and Entertainment

  • Retail

  • IT and Telecommunication

  • Automotive

  • Others (Education, Travel and Tourism, Manufacturing and Etc)

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Mexico

    • Brazil

  • Middle East and Africa

    • Kingdom of Saudi Arabia (KSA)

    • UAE

    • South Africa