Cloud AI Market Size, Share & Trends Analysis Report By Technology (Machine Learning, NLP), By Type (Solution, Services), By Vertical (Government, IT & Telecommunication), By Region (Asia Pacific, North America), And Segment Forecasts, 2023 - 2030

Report Overview

The global cloud AI market size was valued at USD 44.97 billion in 2022 and is estimated to grow at a compound annual growth rate (CAGR) of 39.6% from 2023 to 2030. Cloud AI combines the power of cloud computing with AI algorithms to provide businesses with benefits, including faster processing, improved efficiency, and cost savings. One of the key drivers of the industry growth is the increasing adoption of AI and machine learning technologies by businesses across various sectors. As these technologies become more prevalent, organizations seek ways to leverage them to gain a competitive advantage, and cloud AI provides an accessible and scalable way of executing.

One of the key factors contributing to the growth of the market is the increasing availability of cloud-based AI services from major tech companies, such as Amazon, Microsoft, and Google. These companies invest heavily in developing cloud AI platforms and offering them as a service to businesses of all sizes, making it easier for organizations to access and implement artificial intelligence solutions without investing in costly infrastructure and expertise. Overall, the demand for cloud AI solutions is expected to grow as businesses increasingly seek to harness the power of AI and machine learning to drive innovation and growth.The increasing use of hybrid cloud opens new prospects in the cloud AI sector.

With the deployment of 5G and the growth of mobile usage, cloud computing, and traffic are likely to rise. As a result, the potential for cloud AI services is growing. Technological improvements, growing digitization, and an increased need for virtualization, storage, and analytics drive market growth. Companies are also boosting their investments in cloud AI. For instance, in August 2020, Wiserfunding, a fintech company based in the U.K., announced the launch of cloud-based AI-enhanced credit risk assessment solutions in India. The company plans to spend approximately USD 5 million to create specialized and precise credit risk models to predict potential borrowers’ creditworthiness to greater than 80%.

Technology Insights

The deep learning segment dominated the industry in 2022 with a revenue share of 36.47%. Voice assistants, chatbots, and other conversational interfaces are becoming popular among businesses. Natural Language Processing(NLP) technology enables these interfaces to understand and respond to natural language input, making them more user-friendly and effective. Recent advances in deep learning have enabled NLP models to achieve advanced performance in tasks, such as language translation and sentiment analysis. These models necessitate a large amount of data and computing power, which cloud AI services can provide. Cloud AI services, such as Amazon Web Services (AWS) and Microsoft Azure, have made it easier for businesses of all sizes to access NLP technology without large investments in hardware and expertise.

Deep learning is becoming increasingly popular for various applications, including NLP, picture & speech recognition, and predictive analytics. Cloud service providers make deep learning platforms and tools available, allowing data scientists and developers to create and train their neural networks. As businesses seek to automate procedures and gain insights from their data, the need for deep-learning solutions is anticipated to increase. Moreover, there is a growing trend toward using specialized hardware, such as Graphics Processing Units (GPUs) and Tensor Processing Units (TPUs), to accelerate the training of deep learning models in the cloud. This has led to the development of cloud-based deep learning platforms that leverage these hardware accelerators to provide faster and more efficient training.

Type Insights

The solution segment dominated the industry in 2022 with a share of 63.8%. The increased availability of cloud-based AI services from big tech companies like Amazon, Microsoft, and Google is a major driver boosting the market. These businesses make significant investments in creating cloud AI platforms and providing them as a service to companies of all kinds, making it simpler for businesses to access and use AI solutions without making expensive infrastructure and personnel investments. In general, as businesses increasingly leverage the potential of AI and machine learning to spur innovation and growth, the demand for cloud AI solutions is anticipated to increase.

The service segment is estimated to register the highest CAGR over the forecast period.The need for Al services is projected to increase as smart technology adoption increases significantly. These services use solution capabilities to accelerate business operations, and AI services are used by businesses to lower total operating expenses, boosting revenues. Artificial Intelligence As A Service, or AIAAS, is used by businesses to outperform cloud AI services, including integration, maintenance, and support.

Vertical Insights

The IT & telecommunications segment dominated the industry in 2022 with a share of around 19% of the overall revenue. Tremendous capabilities of the platform, which allow government organizations to scale massive tasks, including data mining, and directly impact public challenges, drive the use of cloud AI in government agencies. Also, the initial barriers to using cloud computing due to data privacy concerns are being removed. With the rise and acceptance of the cloud, AI, and many other technologies, the implementation of cloud AI has advanced in recent years. Several governmental organizations have taken advantage of the competition among Microsoft Azure, Amazon Web Services, and Google Cloud Platform to set up sizable server clusters, implement Hadoop and data lakes, and hire many data scientists.

Retailers are using AI to analyze customer data and provide personalized shopping experiences. Retailers can store and process massive amounts of customer data using cloud computing, allowing them to create targeted marketing campaigns and personalized product recommendations. Retailers use AI-powered inventory management solutions to optimize their supply chain, reduce waste, and improve product availability. Cloud-based AI solutions provide retailers with real-time data analysis, allowing them to predict demand, manage inventory levels, and automate order fulfillment.

Regional Insights

The North America region accounted for the highest revenue share of 34.67% in 2022. The region has many leading players, such as Apple Inc., Google Inc., IBM Corp., Intel Corp., and Microsoft Corp. High growth in the region is attributed to businesses across various industries that are early adopters of AI and machine learning technologies. It includes industries, such as healthcare, finance, and retail, using AI to improveoperational efficiency, reducecosts, and drive innovation. North America has a large and highly skilled workforce, which is equipped to develop and implement AI solutions. Many universities and research institutions in North America are at the forefront of AI research and development, producing a steady stream of talented individuals driving innovation in the market.

Asia Pacific is expected to emerge as the fastest-growing region over the forecast period. The region’s growthis mainlyattributed to heavy investments in cloud and AI technologies. The demand for increased operational effectiveness in the manufacturing sector and the use of cloud-based apps and services across multiple industries are growing in the APAC region. For instance, in October 2019, Amazon Web Services trained relevant government employees in India to develop a cloud-first approach to digital transformation and enhanced skill sets as part of the Indian government’s initiatives to deploy machine learning and AI-driven cloud models to make understanding of massive amounts of data.

Key Companies & Market Share Insights

Owing to numerous prominent players, the market is highly competitive. Companiesundertake strategies, such as agreements, expansions, collaborations, and joint ventures, to strengthen their industry position. Companies develop new products with faster speeds and improved features to expand their product portfolio and gainhigher market shares. For instance, in August 2020, Google Cloud announced an agreement with Best Buy to expand its partnership.

The collaboration is expected to provide a better technological experience by utilizing AI and analytics to create more personalized shopping experiences for the latter’s customers.In another instance,in October 2022, Oracle and Nvidia signed an expanded agreement at Oracle Cloud World to support clients’ accelerated adoption of AI. Through this partnership, Nvidia’s entire computing stack, software, and GPUs, are all available to Oracle Cloud Infrastructure. Some of the prominent players in the global cloud AI market are

• Apple Inc.

• Google, Inc.

• IBM Corp.

• Intel Corp.

• Microsoft Corp.

• MicroStrategy, Inc

• NVIDIA Corp.

• Oracle Corp.

• Qlik Technologies, Inc.

• Salesforce.com Inc.

• ZTE Corp.

Cloud AI Market Report Scope 

Global Cloud AI 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 the purpose of this study, Grand View Research has segmented the global cloud AI market report based on technology, type, vertical, and region:

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

  • Deep Learning

  • Machine Learning

  • Natural Language Processing

  • Others

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

  • Solution

  • Services

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

  • Healthcare

  • Retail

  • BFSI

  • IT & Telecommunication

  • Government

  • Manufacturing

  • Automotive & Transportation

  • Others

• 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