PUBLISHER: Roots Analysis | PRODUCT CODE: 1787842
PUBLISHER: Roots Analysis | PRODUCT CODE: 1787842
As per Roots Analysis, the global explainable AI market size is estimated to grow from USD 8.01 million in the current year to USD 53.92 million by 2035, at a CAGR of 18.93% during the forecast period, till 2035.
The opportunity for explainable AI market has been distributed across the following segments:
Type of Component
Type of Deployment
Type of Application
End-User
Type of Enterprise
Geographical Regions
As of now, the number of AI users has more than doubled since 2020, reaching approximately 300 million worldwide. This marks a significant milestone in the combination of explainable computing and transparency in artificial intelligence. It is important to note that explainable AI is set to transform various sectors by utilizing techniques that allow AI algorithms to be understood, enabling stakeholders to grasp the reasoning behind decisions made. Some of the key benefits of explainable AI include model-agnostic approaches and interactive visualizations that facilitate user comprehension and speed up drug discovery within the healthcare field.
Moreover, explainable AI has changed how businesses operate by offering deeper insights and more effective solutions to urgent challenges across multiple industries such as finance, healthcare, energy, and manufacturing. It should be emphasized that the use of AI in key sectors is increasing rapidly due to the widespread availability of the internet and growing public awareness.
The explainable AI is becoming crucial in the global transition towards innovation and digital transformation aimed at achieving greater work efficiency. Natural language processing and interpretable machine learning have been crucial in realizing the full potential of the explainable AI market, which contributes to improved energy efficiency and faster responses. Additionally, techniques like SHAP and LIME are enhancing the interpretability of intricate AI models, thereby fostering greater trust in AI systems and paving the way for improved decision-making processes across various sectors, indicating a significant modern development. As a result, with ongoing technological progress and increased investment interest, the explainable AI market is expected to experience significant growth during the forecast period.
Based on type of component, the global explainable AI market is segmented into software and services. According to our estimates, currently, software segment captures the majority share of the market. This can be attributed to the rising demand for transparency and accountability in AI systems, prompting organizations to adopt XAI solutions.
This helps to clarify the decision-making process, especially in critical areas like healthcare and finance, where compliance with explainable AI regulations is essential.
Based on type of deployment, the explainable AI market is segmented into cloud and on-premise. According to our estimates, currently, the cloud computing segment captures the majority of the market. This can be attributed to its flexibility and scalability, which makes it appealing for businesses eager to utilize XAI without significant initial infrastructure costs.
However, the on-premise segment is expected to grow at a relatively higher CAGR during the forecast period. This can be attributed to its ability to enable businesses to retain full control over their sensitive data, thereby reducing the risks tied to data breaches that may occur with cloud solutions. Further, on-premise systems provide opportunities for customization and scalability, allowing organizations to adapt their AI frameworks to align with specific operational requirements.
Based on type of application, the explainable AI market is segmented into drug discovery & diagnostics, fraud and anomaly detection, identity and access management, predictive maintenance, supply chain management and others. According to our estimates, currently, fraud detection segment captures the majority share of the market. This can be attributed to the growing demand for transparency and trust in automated decision-making, particularly in the realm of explainable AI in cybersecurity, where understanding AI-generated decisions is essential.
However, the drug discovery and diagnostics segment is expected to grow at a relatively higher CAGR during the forecast period. This can be attributed to the rising demand for AI technologies that improve diagnostic precision and facilitate personalized medicine. Such growth is driven by advancements in machine learning that optimize drug development procedures and enhance treatment results.
Based on end-user, the explainable AI market is segmented into aerospace & defense, automotive, healthcare, IT & telecommunication, public sector & utilities and retail and e-commerce. According to our estimates, currently, the IT & telecommunication segment captures the majority share of the market. This growth can be attributed to the extensive data produced from various sources, which is crucial for training AI models and generating valuable insights.
However, the aerospace & defense sector is expected to grow at a relatively higher CAGR during the forecast period, owing to the rising demand for clarity and responsibility in decision-making, especially in critical contexts where AI plays a role in national security and public safety.
Based on type of enterprise, the explainable AI market is segmented into large and small and medium enterprise. According to our estimates, currently, the large enterprise segment captures the majority share of the market. Additionally, this segment is expected to grow at a higher CAGR during the forecast period. This can be attributed to their ability to invest in explainable AI technologies, leverage significant resources, enhance economies of scale, and foster business growth.
Based on geographical regions, the explainable AI market is segmented into North America, Europe, Asia, Latin America, Middle East and North Africa, and the rest of the world. According to our estimates, currently, North America captures the majority share of the market. However, the market in Asia is expected to grow at a higher CAGR during the forecast period. This can be attributed to the significant investments, government initiatives, and an increasing demand for explainable AI in countries like China and India.
The report on the explainable AI market features insights on various sections, including: