Explainable AI Market Size To Reach $21.06 Billion By 2030

May 2025 | Report Format: Electronic (PDF)

Explainable AI Market Growth & Trends

The global explainable AI market size is anticipated to reach USD 21.06 billion by 2030, registering a CAGR of 18.0% from 2025 to 2030, according to a new report by Grand View Research, Inc. Explainable AI refers to the development of artificial intelligence (AI) systems that can provide understandable and transparent explanations for their decision-making processes. While AI models have achieved remarkable performance in various domains, their inherent complexity often makes it challenging to understand why and how they arrive at particular conclusions or predictions. Explainable AI aims to bridge this gap and enhance trust, accountability, and interpretability in AI systems. It is closely tied to broader growth and advancements in technology. As technology continues to evolve and improve, explainable AI enables the development and implementation of more sophisticated and transparent AI systems.

The exponential growth in computing power, driven by advancements in hardware and parallel processing, has facilitated the training and deployment of complex AI models. High-performance computing resources likesupercomputers and high-performance clusters enable the exploration of larger and more interpretable models, as well as the efficient analysis of their decision-making processes. Moreover, advancements in NLP have enabled the development of conversational interfaces and chatbot systems that can provide explanations in human-readable formats. NLP techniques, such as text generation and sentiment analysis, contribute to the development of intuitive and understandable explanations for AI decisions. These significant developments in technologies are fueling the explainable AI industry’s growth.

The growing interest in explainable AI has led to the emergence of startups likeAlation,EXPAI, and Fiddler Labs focused on developing and commercializing explainability solutions. Venture capital firms and angel investors are actively investing in these startups to support their research, development, and market adoption. Startups often receive funding to refine their explainability algorithms, build user-friendly interfaces, and create scalable products for various industries.

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Explainable AI Market Report Highlights

The solution segment accounted for the largest revenue share of 81.2 % in 2024. This strong share is driven by increased demand for AI tools and platforms that help organizations make AI decisions more transparent and understandable.
The on-premises segment held the largest revenue share in 2024. Using on-premises explainable AI can provide several benefits, such as improved data security, reduced latency, and increased control over the AI system.
The fraud and anomaly detection segment accounted for the largest revenue share in 2024, due to its critical role in enhancing security across various industries, especially in financial services.
The IT & telecommunication sector accounted for the highest revenue share in 2024. The rollout of 5G and the Internet of Things (IoT) is enabling organizations and individuals to collect more real-world data in real time.
North America dominated the explainable AI market with a share of 40.7% in 2024.