Artificial Intelligence of Things (AIoT) Market Size, Share & Trend Analysis Report By Component (Hardware, Services), By Application, By End Use, By Deployment, By Vertical, By Region, And Segment Forecasts, 2025 - 2030

Market Size & Trend

The global artificial intelligence of things (AIoT) market size was estimated at USD 171.40 billion in 2024 and is projected to grow at a CAGR of 31.7% from 2025 to 2030. This growth is driven by integrating AI with IoT, which enhances device capabilities, automates complex processes, and improves efficiency across industries such as manufacturing, healthcare, and smart cities. The demand for real-time data-driven decision-making and predictive analytics is increasing, supported by advancements in machine learning, edge computing, and 5G connectivity. Government policies and investments in R&D are further boosting the adoption of AIoT technologies. For instance, in August 2024, SEALSQ Corp unveiled its entry into the AI chip market, highlighting its AIoT strategy, which integrates the capabilities of AI with the vast opportunities of IoT technologies. This strategic move places SEALSQ Corp at the forefront of innovation, where the fusion of AI and IoT is poised to propel digital transformation and revolutionize industries.

The adoption of AIoT is being accelerated by advancements in cloud and edge computing, expanding the scalability, cost efficiency, and real-time performance of AIoT applications. Cloud platforms provide the necessary infrastructure for managing and analyzing vast IoT data, while edge computing minimizes latency and enhances security by processing data closer to the source. The growing IoT ecosystem, with a proliferation of connected devices and emerging interoperability standards, creates new opportunities for AI integration across various sectors. For instance, in November 2024, HTEC, a company specializing in end-to-end digital product development and engineering services, announced the acquisition of easy-innovation, an embedded hardware and software engineering firm located in Granada, Spain, and Munich, Germany. This acquisition is a key part of HTEC’s strategy to strengthen its expertise in IoT technologies, embedded systems, and AI solutions further, ultimately creating more value for clients and offering growth opportunities for the talent within both companies.

Technological convergence with emerging technologies such as blockchain, AR/VR, and the potential of quantum computing is set to expand AIoT capabilities further, enabling more complex and immersive applications. AIoT is also being leveraged for sustainability, with smart energy management and green IoT solutions promoting efficient resource utilization. Consumer IoT applications, such as wearables and connected automobiles, are gaining traction, while modular AIoT solutions and pay-as-you-go models make the technology accessible to businesses of all sizes. In addition, AIoT plays a significant role in disaster management and public safety, enhancing real-time monitoring and predictive capabilities for improved societal outcomes.

Deployment Insights

The cloud segment accounted for the largest market revenue share in 2024 due to its scalability, flexibility, and cost-efficiency, enabling businesses to scale AIoT deployments while avoiding high infrastructure costs effortlessly. Cloud platforms support large-scale AIoT networks, offer pay-as-you-go models, and provide advanced AI and IoT integration for real-time data analysis and insights. They enhance collaboration and remote accessibility, allowing users to manage IoT devices and share insights from any location. Cloud-edge integration enables efficient AI model training and real-time decision-making at the edge. Furthermore, cloud platforms ensure advanced security and compliance and offer AIoT services through SaaS and PaaS models for faster deployment.

The on-premises segment is expected to grow significantly due to the need for greater data security, privacy, and control, mainly in industries such as healthcare, defense, and finance, which handle sensitive information. On-premises AIoT solutions offer low-latency real-time processing, making them useful for immediate decision-making applications, such as manufacturing and energy. They provide greater customization, allowing organizations to tailor solutions and integrate with legacy systems while maintaining full ownership of infrastructure. These systems also avoid reliance on cloud outages and reduce bandwidth and data transfer costs by processing large volumes of data locally.

Component Insights

The hardware segment led the market and accounted for over 61% of the global revenue in 2024. The widespread deployment of IoT devices, such as smart sensors and industrial machines, across diverse applications drives them. Advancements in AI-optimized chips and edge computing devices have increased demand for hardware capable of real-time data processing, especially in areas like autonomous vehicles and industrial automation. Despite high initial costs, the trend of integrating AI capabilities into existing IoT infrastructure and the growing adoption of smart home and wearable devices are boosting hardware sales. Significant investments in smart city projects and the rollout of 5G infrastructure are further propelling the need for AIoT hardware. In August 2024, Golioth, Inc., an IoT development platform, introduced its AI-ready IoT infrastructure for microcontrollers. This new solution is designed to simplify AI deployment, training, and model execution using IoT data, both in the cloud and on devices. Through this release and strategic partnerships, Golioth enables enterprise customers to seamlessly incorporate AI into their operations via AIoT, driving innovation and accelerating product improvement.

The AIoT services segment is growing rapidly due to the increasing complexity of AIoT deployments, driving demand for integration, customization, and managed services. Businesses require ongoing maintenance, data management, and consulting services to optimize AIoT systems and ensure security, compliance, and ROI. Specialized training and support services are in high demand to address skill gaps, while AIoT-as-a-service models provide scalable, subscription-based solutions. Industry-specific services are also rising, with tailored offerings for sectors such as manufacturing, healthcare, and smart cities.

End Use Insights

The B2B segment led the AIoT market in 2024, driven by strong industrial and enterprise demand for solutions that enhance operational efficiency, automation, and predictive maintenance. Businesses undergoing digital transformation leverage AIoT to streamline processes, improve decision-making, and optimize supply chains. AIoT enables real-time monitoring, predictive analytics, and automation across industries, helping reduce downtime, maintenance costs, and inefficiencies. The adoption of AIoT is also growing in smart infrastructure, healthcare, and retail, where it enhances customer experiences and ensures efficient operations.

The B2G segment is experiencing significant growth due to adopting AIoT solutions in smart city initiatives, public safety, and infrastructure management. Governments are leveraging AIoT technologies to optimize urban mobility, energy management, and environmental sustainability by using real-time data analytics and AI-powered sensors. AIoT also enhances public safety through AI-driven surveillance systems and improves disaster response with early detection and emergency management tools. In smart utilities, AIoT supports energy efficiency and renewable energy integration through smart grids and real-time monitoring.

Vertical Insights

The manufacturing segment accounted for the largest market revenue share in 2024, driven by integrating AIoT technologies that enhance operational efficiency and cost reduction. AIoT facilitates predictive maintenance, enabling manufacturers to monitor equipment health and minimize unplanned downtimes, thus extending machine lifespans. In addition, AIoT optimizes production processes through real-time data analysis, improving energy efficiency and quality control. The transition to smart factories is a key aspect of Industry 4.0, where interconnected systems automate production and enhance supply chain management. In March 2024, the IoT Community, the world's one of the largest, first and longest-standing independent IoT communities with over 49,000 IoT practitioner members, announced the launch of GenAIoT. This new industry solution category merges Generative Artificial Intelligence (Gen AI) with AIoT to enhance the operationalization of Industrial and Enterprise IoT.

The healthcare segment is expected to grow significantly through the advancement of remote patient monitoring and telehealth services. AIoT devices, including wearables and connected medical tools, facilitate continuous health monitoring, enabling effective chronic disease management and timely interventions. Enhanced diagnostic capabilities powered by AI improve the accuracy of early disease detection, while personalized medicine approaches tailor treatment plans to individual patient needs. Moreover, AIoT streamlines operational processes and supply chain management, reducing costs and increasing efficiency in healthcare facilities.

Application Insights

The video surveillance segment led the AIoT market in 2024, driven by rising security concerns, smart city initiatives, and post-pandemic health monitoring needs. AI-powered video analytics enable real-time monitoring, facial recognition, and automated threat detection, making surveillance systems more efficient across retail, industrial, and residential sectors. Edge AI reduces latency and bandwidth usage, while integration with other IoT devices enhances monitoring capabilities. Growing adoption of facial recognition, behavioral analysis, and 5G networks further boost the effectiveness and scalability of these systems. Moreover, cloud-based video surveillance as a service (VSaaS) provides cost-effective, scalable solutions for businesses. For instance, in October 2024, addressing the rising occurrence of natural disasters, FETC International, in partnership with FETC, introduced the AIoT Highway Maintenance Decision Support System. This system is developed to ETC (safeguard electronic toll collection) infrastructure and enhance the safety of O&M (operations and maintenance) personnel during severe weather conditions.

The predictive maintenance segment is experiencing significant growth due to its ability to minimize equipment downtime and reduce maintenance costs through real-time monitoring and AI-driven failure prediction. By optimizing maintenance schedules and extending equipment lifespan, businesses can save on operational expenses and increase productivity. AI-enabled data analytics and edge computing provide real-time insights, improving decision-making across manufacturing, energy, and transportation industries. Integrating digital twin technology and remote monitoring further enhances equipment efficiency, while the rise of cloud-based Predictive Maintenance as a Service (PMaaS) offers scalable, accessible solutions.

Regional Insights

North America represented a significant market share of over 41% in 2024, driven by its strong technological infrastructure, including advanced IT systems and high-performance computing resources. The region hosts leading technology giants such as Google LLC and Microsoft alongside a vibrant start-up ecosystem that fuels innovation in AI and IoT. Significant investments in research and development, associated with collaborations with academic institutions, enhance the advancement of cutting-edge AIoT solutions. The robust healthcare sector is rapidly adopting AIoT technologies, supported by government initiatives promoting telehealth and digital health solutions.

U.S. Artificial Internet of Things (AIoT) Market Trends

The AIoT industry in the U.S. is expected to grow significantly over the forecast period; the AIoT market in the U.S. is expected to grow significantly over the forecast period due to rapid advancements in AI algorithms, machine learning, and IoT technologies, which enhance the capabilities of AIoT solutions. The expansion of 5G networks improves connectivity, enabling real-time data exchange and more robust applications. Rising consumer demand for smart devices, such as home automation tools and health monitors, further drives the adoption of AIoT technologies as consumers seek greater convenience and personalized experiences.

Europe Artificial Internet of Things (AIoT) Market Trends

The AIoT industry in Europe is gaining significant traction, mainly in countries such as Germany, France, and the United Kingdom. Germany is in charge of its Industry 4.0 initiatives, integrating AIoT technologies in manufacturing to boost automation and efficiency, supported by government investments in digitalization. In France, cities such as Paris are implementing smart city projects that utilize AIoT for urban management and healthcare innovations, driven by the increased demand for telehealth solutions post-COVID-19. The UK benefits from a strong regulatory framework that fosters trust in AIoT solutions through GDPR compliance, encouraging business investment in the sector.

Asia Pacific Artificial Internet of Things (AIoT) Market Trends

The Asia Pacific AIoT industry is poised for significant growth driven by rapid urbanization and significant investments in smart city initiatives in countries such as India and China. These projects focus on enhancing urban infrastructure and public services through AIoT technologies, addressing challenges in resource management and traffic control. Government support for digitalization, as seen in initiatives like India's "Digital India," along with favorable regulatory frameworks, encourages businesses to adopt AIoT solutions. Furthermore, the region's robust manufacturing sector is integrating AIoT for automation and predictive maintenance, promoting efficiency in production processes.

Key Artificial Intelligence of Things (AIoT) Company Insights:

Some key companies in the SWIR market include Google LLC, IBM Corporation, Salesforce, Inc., Microsoft, and Oracle.

• Microsoft is a major player in the AIoT industry, leveraging its robust cloud infrastructure, Azure. Its Azure IoT platform provides tools for connecting, monitoring, and managing IoT devices, while Azure AI enhances these capabilities by enabling the development of intelligent applications. This integration allows businesses to collect, analyze, and act on data from IoT devices, automating processes and driving actionable insights. Microsoft also focuses on edge computing to bring AI capabilities closer to IoT devices, reducing latency and improving performance in real-time scenarios. Its AIoT solutions are widely adopted across industries like manufacturing, healthcare, and smart cities, emphasizing scalability, security, and interoperability.

• Oracle is a key player in the AIoT industry, leveraging its Oracle Cloud Infrastructure (OCI) to provide powerful AI and IoT solutions. OCI offers high-performance computing, data management, and analytics tools that are essential for deploying AI models in IoT environments. Oracle’s AI-powered IoT applications help businesses optimize operations by connecting devices, analyzing data, and automating processes. Oracle’s AIoT solutions are widely used in manufacturing, logistics, and energy industries, focusing on predictive maintenance, supply chain optimization, and operational efficiency.

Recent Developments

• In May 2024, ASUSTeK Computer Inc. introduced its full suite of AIoT solutions at the Intel Tech Tour event. ASUS IoT, a global provider of AIoT solutions, presented its advanced innovations across multiple industries, including smart manufacturing, smart retail, smart cities, and smart healthcare. Held at ASUS headquarters, the event attracted over 100 media representatives, offering a firsthand look at how ASUS AIoT solutions are transforming these sectors.

• In April 2024, the Industrial Technology Research Institute (ITRI) partnered with Arm Limited to establish the ITR Arm SystemReady Lab in Taipei. This certification center is the fourth globally, following similar facilities in Europe, the U.S., and India. The lab integrates ITRI's R&D expertise with the Arm SystemReady compliance program to provide comprehensive certification services for the AIoT industry, aiming to strengthen Taiwan's integration of AI and IoT ecosystems.

• In March 2024, IoT Community, Ltd, the world’s first, largest, and longest-standing independent IoT community with over 49,000 practitioner members, announced the launch of GenAIoT. This new industry solution category combines Generative AI with AIoT to enhance the operationalization of Industrial and Enterprise IoT systems.

Artificial Intelligence of Things (AIoT) Market Report Scope

Global Artificial Intelligence of Things (AIoT) 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 artificial intelligence of things (AIoT) market report based on component, application, deployment, end use, vertical, and region.

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

  • Hardware

  • Software

  • Services

• Application Outlook (Revenue, USD Billion, 2017 - 2030)

  • Video Surveillance

  • Inventory Management

  • Predictive Maintenance

  • Supply Chain Management

  • Others

• Deployment Outlook (Revenue, USD Billion, 2017 - 2030)

  • Cloud

  • On-Premises

• End Use Outlook (Revenue, USD Billion, 2017 - 2030)

  • B2B

  • B2G

  • B2C

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

  • Retail

  • Agriculture

  • Logistics

  • BFSI

  • Automotive

  • Healthcare

  • Manufacturing

  • Others

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

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • South Korea

  • Latin America

    • Brazil

  • MEA

    • UAE

    • South Africa

    • KSA