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AI as a Service Market Size - By Deployment Type (Public, Private, Hybrid), By Organization Size (SMEs, Large Enterprises), By End-use (Automotive & Transportation, Manufacturing, Government, BFSI, Healthcare, IT & Telecom, Others) & Forecast, 2023 – 2032

  • Report ID: GMI5714
  • Published Date: May 2023
  • Report Format: PDF

AI as a Service Market Size

AI as a Service Market size was valued at USD 6.4 billion in 2022 and is anticipated to grow at a CAGR of 25% between 2023 and 2032. The growing number of innovative startups worldwide is expected to drive the market growth. Government initiatives worldwide for promoting AI-based infrastructure can contribute to market size.

AI as a Service Market

For instance, in June 2022, Data Tech Labs Inc. launched the ‘AI for India’ campaign. The campaign is supported by the All-India Council for Technical Education (AICTE) and the Ministry of Education, India. Under this campaign, the company plans to upskill 25 lakh Indians free of cost. The rising demand for Machine Learning (ML) services in various forms including APIs and SDKs is also contributing to market demand.

AI as a Service refers to off-the-shelf tools that help companies use and scale AI techniques at a lower cost. It is a third-party service that offers AI outsourcing. It allows businesses and individuals to try out AI for various tasks & purposes with reduced risks and investments.

The limited availability of skilled employees to integrate AI and ML into their businesses is a major factor restraining AI as a service market value. The unavailability of skilled workforce to handle analytics projects involving complicated techniques is hampering market expansion. Businesses are focused on recruiting and retaining technical resources. Also, experienced & skilled professionals demand high salaries, making it difficult for SMEs, and in some cases, large enterprises to recruit them.

AI as a Service Market Trends

The growing adoption of AI & technological advancements for enhancing business processes is increasing the demand for AI services. Also, the expanding application areas and the growing demand for IoT are set to offer growth opportunities for the market. The increased acceptance of multi-cloud functioning and the rising demand for cloud-based services are further contributing to industry demand. According to HashiCorp’s State of Cloud Strategy Survey in 2021, 76% of 3,205 respondents worked on multi-cloud environments. The survey also reported that 86% of respondents will use multi-cloud environments by the end of 2023.

AI as a Service Market Analysis

AI as a Service Market Revenue, By Organization Size, 2020 – 2032, (USD Billion)

The AI as a service market from SMEs segment is poised to expand at 30% CAGR through 2032 due to the growing digitalization and adoption of AI solutions by SMEs for enhancing their business operations. SMEs are focused on reducing risks and improving asset management efficiency. The growing usage of predictive analytics by SMEs for automating business forecasts enables a broader market segmentation, providing new opportunities for innovations.

Global AI as a Service Market Share, By Deployment Model, 2022

The public cloud segment held a major AI as a service market share of over USD 3 billion in 2022, attributed to several benefits offered by the public cloud such as its ability to support vast data storage and scalable processing capabilities. The range of services offered by the public cloud including ML, NLP, and computer vision helps organizations build & deploy AI services. Also, the public cloud offers a wide range of data storage options including data warehouses, data lakes, and serverless databases. Public cloud deployment offers organizations freedom and innovations as operating workloads on the public cloud suit client needs and regulatory requirements.

The AI as a service market from manufacturing segment accounted for 22% revenue share and will observe around 26% CAGR during the forecast period, owing to the increasing adoption of AI services by manufacturers to search for defects in production lines and detect them more quickly & accurately. Manufacturers are also using AI for analyzing sensor data and predicting breakdowns. The use of AI services in manufacturing facilities also offers various benefits including increased productivity among engineers, predictive maintenance, 24/7 operation, enhanced inventory management, and demand forecasting.

U.S. AI as a Service Market Revenue, 2020 -2032, (USD Billion)

The U.S. AI as a service market size dominated more than USD 1.2 billion in 2022, credited to the abundance of large enterprises and the IT infrastructure. Leading AI companies including Google, Amazon, IBM, and Microsoft invest heavily in the research & development of AI technology and help large businesses & SMEs to take advantage of AI, further contributing to the regional market growth. The continuous research & development in the AI field by research institutions in U.S. is also a major factor propelling the industry growth in the region.

AI as a Service Market Share

Some major players operating in the AI as a Service market are :

  • Alibaba.Com
  • Alphabet Inc. (Google LLC)
  • Amazon Web Services, Inc.
  • Baidu
  • CognitiveScale, Inc.
  • Craft.AI
  • IBM Corporation
  • Intel Corporation
  • Microsoft Corporation
  • Oracle Corporation
  • Salesforce.com Inc
  • SAP SE.

These companies are implementing both organic and inorganic growth strategies with a major focus on strategic partnerships, new product launches, and mergers & acquisitions for market expansion and product innovations. These companies are heavily investing in research to introduce innovative products and garner maximum revenue in the market.

AI as a Service Industry News:

  • In December 2022, NICE launched ElevateAI, a new AI as a Service solution that provides the power of Enlighten AI and CX AI to developers. The company is expanding its AI and analytics capabilities beyond the software market with AI services. The new service offers creators access to data at all times. It supports the growing demand for AI to enhance CX.
  • In September 2022, OrionVM, an IaaS provider, partnered with Blaize, an AI computing provider of edge computing, to launch AI as a Service offering. The service is built to enable organizations across various industries to efficiently launch their AI solutions including ML across vast data sets.

This AI as a Service market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD Million from 2018 to 2032, for the following segments:

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Market, By Deployment Type

  • Public
  • Private
  • Hybrid

Market, By Organization Size

  • Large enterprises
  • SMEs

Market, By End-Use

  • Automotive & transportation
  • Manufacturing
  • Government
  • BFSI
  • Healthcare
  • IT & telecom
  • Others

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Spain
    • Italy
    • Netherlands
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea 
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • Middle East & Africa
    • UAE
    • Saudi Arabia
    • South Africa


Authors: Preeti Wadhwani

Frequently Asked Questions (FAQ) :

The AI as a service industry size was worth USD 6.4 billion in 2022 and is set to register 25% CAGR between 2023 and 2032.

The SMEs segment will record over 30% CAGR from 2023 to 2032, due to the growing digitalization and adoption of AI solutions by SMEs for enhancing their business operations.

The U.S. market size exceeded USD 1.2 billion in 2022 and will expand at a significant pace from 2023-2032, attributed to the abundance of large enterprises and the IT infrastructure.

Alibaba.Com, Alphabet Inc. (Google LLC), Amazon Web Services, Inc., Baidu, CognitiveScale, Inc., Craft.AI, DATAIKU SAS, IBM Corporation, Intel Corporation, Microsoft Corporation, Oracle Corporation, Salesforce.com Inc., and SAP SE.

AI as a Service Market Scope

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 15
  • Tables & Figures: 266
  • Countries covered: 19
  • Pages: 300
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