PUBLISHER: The Business Research Company | PRODUCT CODE: 1852279
PUBLISHER: The Business Research Company | PRODUCT CODE: 1852279
Artificial intelligence (AI)-powered simulation and digital twins involve using AI algorithms and machine learning techniques to create virtual representations (digital twins) of physical assets, systems, or processes, and to run simulations on these models to predict, optimize, and monitor real-world performance.
The main components of AI-powered simulation and digital twins are solutions and services. Solutions consist of software platforms and tools used to create, manage, and analyze digital twins. Types of digital twins include product, process, system, human, city and infrastructure, and others. Deployment models include cloud-based and on-premises digital twins. These solutions are applied across multiple industry verticals, including manufacturing and industrial automation, healthcare and pharmaceuticals, automotive and transportation, aerospace and defense, energy and utilities, retail and e-commerce, and others.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the information technology sector, particularly in hardware manufacturing, data infrastructure, and software deployment. Higher duties on imported semiconductors, circuit boards, and networking equipment have raised production and operational costs for tech firms, cloud service providers, and data centers. Companies relying on globally sourced components for laptops, servers, and consumer electronics are facing longer lead times and increased pricing pressures. In parallel, tariffs on specialized software tools and retaliatory measures from key international markets have disrupted global IT supply chains and reduced overseas demand for U.S.-developed technologies. To navigate these challenges, the sector is accelerating investments in domestic chip fabrication, diversifying supplier bases, and adopting AI-driven automation to enhance operational resilience and cost efficiency.
The artificial intelligence (AI)-powered simulation and digital twins market research report is one of a series of new reports from The Business Research Company that provides artificial intelligence (AI)-powered simulation and digital twins market statistics, including the artificial intelligence (AI)-powered simulation and digital twins industry global market size, regional shares, competitors with the artificial intelligence (AI)-powered simulation and digital twins market share, detailed artificial intelligence (AI)-powered simulation and digital twins market segments, market trends, and opportunities, and any further data you may need to thrive in the artificial intelligence (AI)-powered simulation and digital twins industry. This artificial intelligence (AI)-powered simulation and digital twins market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.
The artificial intelligence (AI)-powered simulation and digital twins market size has grown exponentially in recent years. It will grow from $3.89 billion in 2024 to $5.43 billion in 2025 at a compound annual growth rate (CAGR) of 39.6%. The growth during the historical period was driven by rising demand for system-level simulation, increasing complexity in product design, growing adoption of predictive maintenance, expansion of industrial automation, and a higher need for virtual prototyping.
The artificial intelligence (AI)-powered simulation and digital twins market size is expected to see exponential growth in the next few years. It will grow to $20.36 billion in 2029 at a compound annual growth rate (CAGR) of 39.2%. The growth during the forecast period is expected to be driven by increasing implementation of smart manufacturing, rising adoption of real-time data analytics, growing use in the energy and utilities sector, expansion of digital transformation strategies, and a stronger focus on operational efficiency. Key trends in this period include technological advancements, continuous innovation in AI models, development of integrated digital twin ecosystems, increased research and development investments, and progress in generative design technologies.
The growing trend of digitization in manufacturing is driving the growth of the artificial intelligence (AI)-powered simulation and digital twins market due to increasing efficiency demands and technological advancements. Digitization converts physical processes and information into digital formats, enabling real-time monitoring, analysis, and optimization of manufacturing operations. AI-powered simulation and digital twins enhance operational efficiency by enabling predictive maintenance, process optimization, and reduced downtime. For instance, by July 2025, the Information Technology and Innovation Foundation reported that South Korea plans to invest $2.2 billion in manufacturing and service robotics by 2028, targeting the deployment of one million robots worldwide by 2030.
Technological advancements in real-time edge AI are further enhancing on-site industrial decision-making. Industrial copilot solutions process data locally within manufacturing networks to deliver actionable insights, enabling faster decisions and more efficient operations. For example, in January 2025, Siemens AG launched a suite of AI-powered tools, including Industrial Copilot for real-time decision-making, integration with Nvidia Omniverse for 3D digital twin simulation, and a mixed reality system developed with Sony, all aimed at accelerating smart, efficient, and sustainable manufacturing processes.
In March 2025, Siemens AG acquired Altair Engineering Inc. for $10 billion to integrate its advanced simulation, high-performance computing, and AI technologies into Siemens' Xcelerator platform. This acquisition aims to create a comprehensive industrial software portfolio, enhance digital twin capabilities, and drive sustainable industrial transformation globally. Altair Engineering is a US-based provider of AI-powered simulation, digital twin, and high-performance computing solutions for advanced product design and engineering.
Major players in the artificial intelligence (AI)-powered simulation and digital twins market are SAP SE, ABB Ltd., Siemens AG, Autodesk Inc., SymphonyAI LLC, Rescale Inc., OroraTech GmbH, Sight Machine Inc., Travancore Analytics Pvt. Ltd., Cosmo Tech SAS, Treedis Ltd., Duality AI Inc., Geminus.AI Inc., Twyn Reality Technologies Pvt. Ltd., Cloudworx Inc., TwinThread Inc., Basetwo AI Inc., BOOM Interactive Inc., Twinit Technologies Private Limited, and Xaba Inc.
North America was the largest region in the artificial intelligence (AI)-powered simulation and digital twins market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in artificial intelligence (AI)-powered simulation and digital twins report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the artificial intelligence (AI)-powered simulation and digital twins market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The artificial intelligence (AI)-powered simulation and digital twins market consists of revenues earned by entities by providing services such as real-time modeling, virtual system replication, predictive analytics, data-driven simulation, and performance optimization. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI)-powered simulation and digital twins market also includes sales of edge computing devices, 3D scanning equipment, augmented and virtual reality headsets, automation controllers, and visualization display systems. Values in this market are 'factory gate' values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Artificial Intelligence (AI)-Powered Simulation And Digital Twins Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on artificial intelligence (ai)-powered simulation and digital twins market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for artificial intelligence (ai)-powered simulation and digital twins ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The artificial intelligence (ai)-powered simulation and digital twins market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.