Embedded AI Market Size, Share & Trends Analysis Report By Offering (Hardware, Software), By Data Type (Sensor Data, Image And Video Data), By Vertical (BSFI, Retail), By Region, And Segment Forecasts, 2024 - 2030

Embedded AI Market Size & Trends

The global embedded AI market size was estimated at USD 8.79 billion in 2023 and is estimated to reach USD 21.93 billion by 2030, registering a CAGR of 14.0% from 2024 to 2030. The increasing demand for more powerful and energy-efficient processors is driven by the need to effectively manage complex AI algorithms and integrate with Image & Video Data-based AI services, enhancing scalability and providing users with opportunities to utilize embedded AI solutions. In addition, the rising need for intelligent and autonomous systems that offer personalized experiences and the expansion of connected devices and IoT ecosystems for improved communication will further stimulate global market growth.

The growing demand for advanced technologies that deliver personalized and adaptive experiences drives market acceptance. The push for personalized interactions has led to incorporating AI capabilities into several embedded systems. By utilizing embedded AI, devices and applications can analyze user data, preferences, and behaviors to offer customized recommendations, suggestions, and responses, thereby boosting user satisfaction and engagement. Moreover, embedded AI solutions can facilitate autonomous behavior in devices and systems, minimizing the need for continuous user input. This is especially valuable in areas like autonomous vehicles, smart home automation, and industrial automation, where AI algorithms can support intelligent decision-making and automated actions.

Offering Insights

Hardware led the market, accounting for 42.02% revenue share in 2023. This growth is driven by the increasing demand for more powerful and energy-efficient processors capable of handling complex AI algorithms. As AI applications become more sophisticated and resource-intensive, the need for advanced hardware solutions, such as high-performance CPUs, GPUs, and specialized AI accelerators, is surging. This trend is further fueled by the growing adoption of autonomous and intelligent systems that require tailored experiences, prompting manufacturers to innovate and enhance their hardware offerings. Furthermore, the rise of edge computing is reshaping the landscape as devices increasingly process data locally, reducing reliance on Image & Video Data services and enabling faster decision-making.

Software is predicted to foresee significant growth over the forecast period. Embedded AI software is vital in the market, offering essential algorithms, frameworks, and libraries that empower AI capabilities within embedded systems. This software harnesses the potential of AI in embedded devices, facilitating intelligent decision-making, real-time data analysis, and improved functionality across diverse industries. By enabling local data processing and interpretation, embedded AI software enhances device autonomy, boosts performance, and enriches user experiences. Moreover, The proliferation of connected devices and the rising demand for real-time data processing fuel the need for sophisticated embedded AI solutions. This trend is evident in automotive, healthcare, and industrial automation sectors, where embedded AI software revolutionizes operations and user interactions. As technology evolves, the market is expected to grow rapidly, driven by innovations enabling smarter, more adaptable, cost-effective solutions.

Vertical Insights

Automotive accounted for a significant share of the global revenue in 2023. The automotive industry is experiencing a surge in the adoption of embedded AI technologies, driven by the rapid advancements in autonomous driving, electric vehicles, and connected car features. Autonomous driving is a key application area where embedded AI is revolutionizing the automotive industry. AI algorithms, combined with sensors like cameras, radar, and lidar, enable vehicles to perceive their surroundings, identify potential hazards, and make real-time decisions to ensure safe navigation. Advanced driver assistance systems (ADAS) powered by embedded AI are becoming increasingly sophisticated, offering features like lane-keeping, adaptive cruise control, and automatic emergency braking.

Healthcare is estimated to grow significantly over the forecast period. This growth is driven by the increasing demand for advanced diagnostic tools, personalized treatment options, and enhanced patient care. This surge is fueled by significant investments from both private and government sectors aimed at integrating AI solutions into medical devices and healthcare systems. Embedded AI is being utilized to analyze vast amounts of medical data, enabling healthcare professionals to make more accurate diagnoses and develop tailored treatment plans for patients. Furthermore, the rise of telemedicine and remote monitoring solutions has accelerated the need for AI-driven tools to process and analyze data in real-time, further enhancing patient outcomes. As healthcare providers increasingly recognize the potential of embedded AI to improve operational efficiency and patient satisfaction, the growth trajectory for this segment is expected to remain strong over the forecast period.

Data Type Insights

Numeric data led the market and accounted for 24.93% of the global revenue in 2023. Numeric data is the backbone for training and optimizing AI models, enabling systems to make data-driven decisions across various applications, including smart cities, healthcare, and industrial automation. As organizations seek to enhance operational efficiency and resource utilization, the ability to analyze historical patterns and trends using numeric data is becoming vital. The competence to analyze data locally in real-time reduces latency and reliance on Image & Video Data-based processing, further boosting performance and responsiveness. This focus on numeric data enhances operational efficiency and contributes to significant cost savings, solidifying its position as a dominant force in the market.

Sensor data is estimated to grow significantly over the forecast period. The rise of smart devices, such as fitness trackers and home automation systems, exemplifies the utility of sensor data, which collects vital information like heart rates, sleep patterns, and environmental conditions to provide tailored recommendations and enhance user experiences. Moreover, incorporating sensor data into embedded AI systems improves operational efficiency, cost savings, and enhanced safety across various industries. As the demand for intelligent and autonomous systems grows, the ability to process and analyze sensor data locally will become increasingly critical, positioning this segment for robust growth in the coming years. Overall, integrating sensor data with embedded AI technologies is set to play a pivotal role in shaping the future of smart applications and systems.

Regional Insights

North America accounted for a significant market share and held a 32.45% share in 2023. The region's growth in this sector is fueled by its presence of leading AI technology firms, strong R&D capabilities, and a well-established market ecosystem. In recent years, there has been a steady increase in embedded AI adoption in North America, spurred by advancements in AI technologies, rising demand for intelligent edge devices, and the widespread use of IoT applications. Overall, the adoption of embedded AI in North America is accelerating across various industries, driven by technological progress, the expansion of IoT, a supportive infrastructure, and growing awareness of its benefits.

U.S. Embedded AI Market Trends

The embedded AI market in the U.S. holds the highest market share over the forecast period. The U.S. has established itself as a leader in technological innovation, fostering a collaborative ecosystem of research institutions, universities, and technology companies that push the boundaries of AI capabilities. The emphasis on enhancing operational efficiency, improving decision-making processes, and delivering personalized customer experiences propels the adoption of embedded AI solutions. In addition, the rise of IoT devices and the demand for intelligent systems that can process and analyze data locally further contribute to the growth of embedded AI in the region.

Europe Embedded AI Market Trends

The embedded AI market in Europe is expected to grow at the second-fastest rate from 2024 to 2030. This growth is driven by the automotive industry, which significantly contributes to the growth of embedded AI in Europe, with applications such as gesture recognition, object identification, voice assistants, and predictive maintenance. Automakers and AI technology providers are forming partnerships to offer AI-driven solutions that enhance convenience, customer experience, and safety.

Asia Pacific Embedded AI Market Trends

The embedded AI market in Asia Pacific is experiencing rapid growth over the forecast period. This surge is primarily driven by the rapid expansion of e-commerce and digital transformation in the retail sector across the region. Embedded AI technologies are playing a crucial role in enabling personalized recommendations, supply chain optimization, and fraud detection in e-commerce platforms. Moreover, emphasizing smart city initiatives and urban development projects in the Asia-Pacific region is another key driver for embedded AI growth. As countries invest in building sustainable and technologically advanced cities, embedded AI technologies are being integrated to enhance intelligent infrastructure, efficient energy management, and improved public services.

Key Embedded AI Company Insights

Prominent firms have used product launches and developments, followed by expansions, mergers and acquisitions, partnerships, and collaboration contracts and agreements, as their primary business strategy to increase their market share. The companies have used various techniques to enhance market penetration and boost their position in the competitive industry. For instance, in April 2023, IBM unveiled Watson Edge for Financial Services, a solution designed to enable financial institutions to deploy AI at the edge. This new offering aims to enhance customer service, improve fraud detection, and strengthen risk management. Similarly, in March 2023, Arrow Electronics, Inc. and Qualcomm Technologies International, Ltd. expanded their strategic partnership by launching Edge Labs, a center of excellence under Arrow. Edge Labs is designed to support customers in fast-tracking the development of connected, intelligent edge devices utilizing Qualcomm Technologies' solutions. The initiative aims to address IoT development challenges and promote the widespread adoption of Edge AI across diverse IoT applications and use cases.

Recent Developments

• In August 2023, IBM announced the completion of its acquisition of Apptio Inc. To meet the growing demand for AI and foundational models among its clients and partners, IBM plans to enhance its watsonx AI and data platform by integrating Apptio's anonymized IT spend data. This integration will drive innovation, provide deeper insights, and create additional value. Combining Apptio's products with IBM's IT automation portfolio will offer businesses a comprehensive technology management platform, enabling them to optimize and automate decisions across their entire IT landscape.

• In April 2024, Google introduced its new Axion processors, an advanced line of Arm-based CPUs tailored for its data centers. These processors are set to deliver a 30% performance boost over the fastest existing Arm-based cloud instances. Additionally, they offer up to 50% better performance and up to 60% greater energy efficiency compared to current-generation x86-based instances.

Embedded AI Market Report Scope

Global Embedded 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 2018 to 2030. For this study, Grand View Research has segmented the global embedded AI market report based on offering, data type, vertical, and region.

• Offering Outlook (Revenue, USD Million, 2018 - 2030)

  • Hardware

  • Software

  • Services

• Data Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Sensor Data

  • Image & Video Data

  • Numeric Data

  • Categorial Data

  • Others

• Vertical Outlook (Revenue, USD Million, 2018 - 2030)

  • Healthcare

  • BFSI

  • IT & ITES

  • Retail

  • Media & Entertainment

  • Automotive

  • Telecom

  • Manufacturing

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • Kingdom of Saudi Arabia

    • UAE

    • South Africa