PUBLISHER: Fortune Business Insights Pvt. Ltd. | PRODUCT CODE: 1930104
PUBLISHER: Fortune Business Insights Pvt. Ltd. | PRODUCT CODE: 1930104
The global AI in diagnostics market is witnessing exponential growth due to rapid digital transformation in healthcare, increasing disease burden, and shortages of skilled medical professionals. According to Fortune Business Insights, the market was valued at USD 7.03 billion in 2025 and is projected to grow to USD 10.12 billion in 2026. By 2034, the market is expected to reach USD 209.64 billion, registering an exceptional CAGR of 46.06% during 2026-2034. North America dominated the market in 2025 with a 50.84% share, supported by strong AI adoption, advanced healthcare infrastructure, and the presence of leading technology players.
Market Overview
Artificial intelligence in diagnostics integrates machine learning (ML), deep learning, and natural language processing (NLP) to analyze large volumes of medical data, including imaging scans, laboratory results, electronic health records, and genomic information. AI significantly reduces diagnostic time, improves accuracy, and enables early detection of diseases such as cancer, cardiovascular disorders, and neurological conditions. These advantages are driving widespread adoption of AI-based diagnostic solutions across hospitals, imaging centers, and research institutions.
The rising prevalence of chronic diseases and the global shortage of healthcare professionals, particularly radiologists and pathologists, are key contributors to market growth. For instance, the UK reported a 33% shortage of consultant radiologists, expected to worsen by 2025, reinforcing the need for AI-driven diagnostic support systems.
Market Drivers
A major growth driver is the increasing burden of chronic diseases worldwide. According to data published in 2024, over 310,000 women and 2,800 men in the U.S. are expected to be diagnosed with invasive breast cancer, highlighting the need for early and precise diagnostics. AI-powered tools assist clinicians by identifying subtle disease patterns that may be missed by conventional methods.
Additionally, AI helps mitigate workforce shortages by automating routine tasks, reducing clinician workload, and improving diagnostic efficiency. This is especially critical in radiology and pathology, where demand continues to exceed supply.
Market Restraints
Despite strong growth prospects, reluctance among medical practitioners remains a key restraint. Concerns related to job displacement, lack of transparency in AI decision-making, and doubts about diagnostic reliability slow adoption. Building trust through training, validation studies, and regulatory clarity is essential to overcome these barriers.
Market Opportunities
The expansion of AI into untapped specialty areas, such as ophthalmology, autoimmune diseases, and infectious disease diagnostics, presents significant opportunities. In May 2024, Lumibird Medical launched an AI-enabled dry eye diagnostic platform, highlighting how AI adoption beyond traditional radiology and oncology can unlock new revenue streams.
Market Challenges
Regulatory compliance and data privacy pose major challenges. AI diagnostic tools must comply with stringent regulations such as HIPAA and GDPR, ensuring data security, transparency, and ethical use. Rising cyber threats and data breaches further increase compliance costs and implementation complexity.
Market Trends
A prominent trend is increasing funding and government initiatives to accelerate AI adoption in diagnostics. In October 2024, Ataraxis AI secured USD 4.0 million in seed funding to develop precision diagnostic tools. Similarly, the UK NHS allocated USD 26.8 million to deploy AI imaging technologies for faster diagnosis of cancer, stroke, and heart disease.
Competitive Landscape
Key players include Microsoft Corporation, Google, NVIDIA, Siemens Healthineers, Aidoc, PathAI, Digital Diagnostics, Tempus AI, and Qure.ai. These companies focus on strategic partnerships, cloud-based AI platforms, and advanced diagnostic algorithms to strengthen their market position.
Conclusion
The global AI in diagnostics market is set for transformative expansion, growing from USD 7.03 billion in 2025 to USD 209.64 billion by 2034. Driven by rising chronic disease prevalence, workforce shortages, and rapid technological advancements, AI is reshaping diagnostic accuracy and efficiency. While regulatory challenges and practitioner hesitancy remain, increasing investments, government initiatives, and expanding applications across specialties will ensure sustained growth. North America leads the market, while Asia Pacific offers the fastest growth potential, making AI in diagnostics a critical pillar of future healthcare systems.
Segmentation By Component
By Technology
By Specialty
By End-user
By Region
Figure 57: Global AI in Diagnostics Market Share (%), By Company, 2025