Quantum AI Market Size, Share & Trends Analysis Report By Component, By Deployment Model, By Application, By Region, And Segment Forecasts, 2024 - 2030

Quantum AI Market Size & Trends

The global quantum AI market size was estimated at USD 256.0 million in 2023 and is projected to grow at a CAGR of 34.4% from 2024 to 2030. The market is growing rapidly, driven by advancements in quantum computing and its potential to solve problems that classical computers struggle with. Quantum computing enhances machine learning algorithms, enabling them to process vast datasets and uncover patterns that were previously unreachable. The combination of AI and quantum technologies is set to transform industries such as finance, healthcare, logistics, and manufacturing by enabling more precise predictions, optimizations, and real-time decision-making capabilities.         

Companies and research institutions are investing heavily in developing quantum algorithms and integrating them into AI systems. As a result, early adopters are already exploring quantum-enhanced AI solutions, especially in optimization and data processing tasks that demand higher computational power. The growing need for speed, accuracy, and efficiency is pushing businesses to explore Quantum AI as a transformative solution. These early-stage investments and experiments are setting the stage for future commercial applications across various sectors.

Quantum cryptography and security are key drivers of market growth, as the impending threat of quantum computers breaking classical cryptographic systems looms large. With the development of quantum-safe encryption and quantum key distribution (QKD), Quantum AI is enhancing data security and privacy protection. Governments and corporations are recognizing the importance of quantum-resistant systems, especially in sectors such as banking, defense, and telecommunications, where data protection is paramount. Moreover, Quantum AI’s ability to detect and mitigate cyber threats in real-time by analyzing vast amounts of data positions it as a crucial tool in enhancing cybersecurity. Quantum cryptography is no longer a theoretical concept but is slowly transitioning into real-world applications as companies build quantum-secure solutions. As the world moves towards quantum computing, security solutions powered by Quantum AI are expected to become essential. This sector is likely to see a surge in demand over the next decade.

Advancements in quantum hardware and algorithms are making quantum computing increasingly practical. New developments in quantum processors are improving their performance and stability, allowing for more complex calculations. Enhanced quantum algorithms are being designed to solve specific problems more efficiently. These improvements are crucial for integrating quantum computing with AI, as they enable more sophisticated data processing and analysis. As quantum systems become more accessible, their potential applications in AI grow. This integration is expected to lead to breakthroughs in areas such as optimization and predictive modeling. The ongoing progress in both fields is paving the way for innovative solutions and applications.

Component Insights

The hardware segment led the market and accounted for 38.0% of the global revenue in 2023. The segment is currently dominant due to the essential role of specialized quantum processors and supporting infrastructure. Significant investments are being made in developing and refining quantum computing hardware, including quantum chips and cryogenic systems, which are crucial for enhanced performance and stability. Major tech companies and research institutions are focusing their efforts on advancing quantum hardware to boost computational power. The complexity and high cost of building and maintaining quantum hardware create substantial barriers to entry, solidifying its leading position in the market. Consequently, advancements in hardware are driving much of the current growth and innovation in the quantum AI sector.

The software segment is predicted to foresee significant growth during the forecast period as innovations in quantum algorithms and applications evolve. Advances in quantum programming languages and development tools are making it easier to create and implement quantum algorithms. As quantum hardware becomes more available, there is a growing demand for software solutions that can effectively utilize this technology. Increased interest in quantum AI applications is driving significant investment in software development, expanding its potential uses and capabilities. This momentum is expected to continue, with software becoming a key driver in realizing the full potential of quantum AI technologies.

Deployment Model Insights

The on-premises segment accounted for the largest revenue share in 2023. The on-premises model leads the market because it provides a high degree of control over IT infrastructure. Organizations can customize their systems extensively to fit specific needs, providing customized solutions that enhance operational efficiency. This model also offers robust security and compliance measures, which are crucial for industries with strict regulatory requirements. The ability to manage hardware and software directly allows for greater oversight and data sovereignty. Despite the significant upfront investment and ongoing maintenance costs, the control and customization benefits make On-Premises solutions a preferred choice for many businesses.

The cloud-based segment is predicted to foresee significant growth over the forecast period. The cloud-based model is experiencing rapid growth due to its scalability and flexibility. Businesses can easily adjust their resources based on demand, which supports efficient operations and cost management. Cloud solutions also facilitate remote work and collaboration, making them ideal for modern, distributed teams. By reducing the need for extensive in-house infrastructure, cloud services lower total IT costs and provide greater agility. As organizations seek more adaptable and economically feasible solutions, the Cloud-Based model is becoming an increasingly popular choice.

Application Insights

The machine learning & optimization segment accounted for the largest market revenue share in 2023. Machine Learning and optimization enhance decision-making and operational efficiency across various industries. These technologies utilize vast amounts of data to identify patterns, make predictions, and optimize processes, leading to more informed and effective business strategies. The continuous advancements in algorithms and computational power have expanded their applications, from improving customer experiences to simplifying supply chains. As businesses aim to utilize data for a competitive edge, machine learning and optimization offer essential insights and automation capabilities. Their transformative impact on industries such as finance, healthcare, and manufacturing underscores their dominant role in the current market.

The quantum security and cryptography segment is projected to grow significantly over the forecast period due to the increasing integration of AI technologies in vehicles. Quantum security and cryptography are experiencing rapid growth as organizations recognize the need to protect sensitive data against emerging threats. With the potential to break traditional encryption methods, quantum computing poses a significant risk, driving the demand for advanced cryptographic solutions. Quantum-resistant algorithms are being developed to safeguard information in a post-quantum world, ensuring that data remains secure even as computational capabilities evolve. The field is expanding as researchers and companies work to stay ahead of potential vulnerabilities and maintain data integrity.

Regional Insights

North America dominated the market and accounted for 39.5% share in 2023. In North America, the Quantum AI market is surging due to the region's strong investment in technology infrastructure and research. The presence of major tech companies and leading research institutions drives rapid advancements in quantum computing applications. Robust government funding and initiatives support the development and commercialization of quantum technologies. North America's strategic focus on innovation and its well-established tech ecosystem position it as a global leader in the market.

U.S. Quantum AI Market Trends

The U.S. stands out in the Quantum AI market due to its significant technological advancements and extensive government support. The country is home to some of the world’s leading tech companies and research organizations, which are heavily investing in quantum computing. Federal initiatives, such as the National Quantum Initiative Act, shows the strategic importance of quantum technology for national security and economic growth. The U.S. is also a major player in global quantum research collaborations, enhancing its position in the market.

Europe Quantum AI Market Trends

European countries are forming partnerships and consortia to accelerate the development and application of quantum technologies. The European Union's Horizon Europe program and various national research grants are pivotal in supporting quantum research. Europe's emphasis on cross-border collaboration and innovation is fostering a dynamic environment for Quantum AI advancements. As European institutions and companies enhance their quantum capabilities, the region is making notable strides in the global Quantum AI arena.

Asia Pacific Quantum AI Trends

Asia Pacific is anticipated to register the fastest CAGR over the forecast period. The Asia Pacific region is rapidly advancing in the Quantum AI market, driven by significant investments from both governmental and private sectors. Countries such as China and Japan are leading in quantum research and development, with extensive funding allocated to technological innovation.  Asia-Pacific's focus on integrating quantum technologies across various industries is contributing to its growing influence in the market. The rapid pace of technological adoption and development in the region shows its emerging prominence in the global Quantum AI field.

Key Quantum AI Company Insights

Prominent firms have used product launches and developments, followed by expansions, mergers and acquisitions, contracts, agreements, partnerships, and collaborations 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 July 2024, Zapata Computing Holdings Inc., a U.S.-based software company, has broadened its collaboration with D-Wave Quantum Inc. to expedite the advancement of integrated quantum and generative AI solutions. This collaboration aims to enhance model training efficiency and performance, combining generative AI with quantum optimization to advance enterprise applications and drive sustainability and operational efficiency.

Recent Developments

• In June 2024, SandboxAQ, an enterprise SaaS company in the U.S., launched AQNav. This new multi-domain navigation technology combines AI algorithms, quantum sensors, and Earth's magnetic field to provide an alternative to GPS in cases of interference. This innovation aims to enhance navigation across various industries and has already completed over 200 flight hours and 40 missions on multiple aircraft models.

• In June 2024, Microsoft introduced two new features for its Azure Quantum Elements platform, Generative Chemistry and Accelerated DFT, to advance research in chemistry and materials science with AI and quantum computing. These updates aim to simplify molecular discovery and speed up quantum mechanical simulations, significantly advancing scientific research and enabling the development of a future quantum supercomputer for complex simulations.

• In January 2024, International Business Machines Corporation (IBM), a U.S.-based technology company, partnered with Korea Quantum Computing (KQC) to incorporate IBM's quantum computing infrastructure and advanced AI software into South Korea's tech sector. This partnership will enable KQC to access IBM Watsonx for advanced AI model development and deploy IBM's next-generation quantum systems, including an IBM Quantum System Two.

• In January 2024, Accenture, an IT company in Ireland, and SandboxAQ are partnering to deliver AI and quantum computing solutions to identify and mitigate cybersecurity vulnerabilities, utilizing SandboxAQ's Security Suite for comprehensive cryptographic management. This collaboration aims to help organizations secure data against advanced AI-enabled cyberattacks and emerging quantum computing threats, enhancing their overall cybersecurity posture.

Quantum AI Market Report Scope

Global Quantum 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 Quantum AI market report based on component, deployment model, application, and region:

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

  • Software

  • Hardware

  • Services

• Deployment Model Outlook (Revenue, USD Million, 2018 - 2030)

  • Cloud-Based

  • On-Premises

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

  • Machine Learning & Optimization

  • Quantum Security & Cryptography

  • Simulation & Modeling

  • Others

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

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • KSA

    • UAE

    • South Africa