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Natural Language Processing (NLP) Market size valued at USD 25 billion in 2022 and is expected to grow at a CAGR of 35% from 2023 to 2032.
The adoption of innovative technologies and increasing digital transformation are predicted to boost the industry growth. Artificial Intelligence (AI) is currently playing a significant role in both the public & private sectors. In the public sector, Natural Language Processing (NLP) and more sophisticated AI technologies enhance accuracy, speed up response times, deliver a valuable customer experience, and free up staff members to focus on customer-centered tasks. The market is set to expand owing to the increasing document backlogs in the government sector, declining response times, improved data quality, and faster data access facilitation. Natural Language Processing (NLP) has been gaining popularity in recent years as a result of improvements in computer-human interaction and the scaling of other language-related activities. For instance, NLP enables computers to read text, hear & analyze voice, gauge mood, and identify key points. Machine Learning (ML) and Artificial Intelligence (AI) work together to identify and index the photographs submitted with passport applications, and the deep learning-powered applications may generate captions for photos.
The internet and the ever-expanding channels for communication, consumption, and engagement have given consumers more power. Therefore, businesses are being compelled to review their branding & operating strategies. Businesses need to develop customer-focused experience to attract customers away from competitors in today's competitive market. For instance, a chatbot powered by AI that can answer questions can be enabled by businesses through a distinct number of channels. Customer engagement vendors are incorporating AI capabilities into their platforms to let users build scalable & customized customer experiences without the need for human coding or logic creation.
NLP uses algorithms that were created for a given goal to assist computers in understanding human language. Nevertheless, growing connection issues, such as accessibility issues and non-contextual responses, are limiting industry expansion. Additionally, the inability to understand the distinction between machines and humans or complex & grammatically incorrect statements is also a restraining factor. This is probably going to make things more complicated, which will be an obstacle for major market participants.
Smart devices are being used more often to support smart environments, driving market development. The Natural Language Processing market is also expanding owing to the increased interest in complex text analytics as well as expanding internet & connected device usage. Moreover, NLP-based apps are being employed more often across sectors to enhance user experience. The rising healthcare & automotive industry investments are expected to provide considerable potential opportunities in the market.
The on-premises NLP implementation offers full control, visibility, and authentication security controls over data. This market is also growing since it is simple to scale up to meet the company demand and improve efficiency with built-in redundancy. The Natural Language Processing (NLP) market is anticipated to grow in the coming years but the cloud sector is anticipated to account for the largest growth owing to the rising use of cloud-based NLP due to its lower cost & maintenance.
The machine learning segment accounted for the largest market revenue share in 2022. Rule-based & machine learning-based approaches are included in the Natural Language Processing (NLP) market. Rule-based NLP focuses mostly on pattern matching, which is widely used in the healthcare industry as it improves the Electronic Health Record (EHR) process by making it easier to find random words and increasing the efficiency of data administration.
The Natural Language Processing market is poised to be dominated by North America. Fast innovations and improvements in AI technologies are the main reasons supporting the market growth. The region's expanding supply of NLP products & services is anticipated to further fuel market expansion in North America. Moreover, several developments in top firms including Google, Microsoft, IBM, and Meta NLP Technology have seen improvements in accuracy, speed, and even techniques that computer scientists use to tackle challenging problems.
The top players in the Natural Language Processing market are IBM, Microsoft, Google, AWS, Meta, 3M, Apple, SAS, Oracle, and Health Fidelity. To get a competitive edge, the major industry providers concentrate on growing their clientele. As a result, major corporations engage in a variety of strategic measures such as mergers & acquisitions, joint ventures for the development of new products & technologies, and collaborations. Stakeholders may also highlight technical breakthroughs and product difference. For instance, in July 2022, SAP SE acquired Askdata, a platform for data engagement & collaboration. With the help of this platform, SAP will be able to make intelligent judgements for clients using AI-driven natural language searches, which is the core objective of the acquisition.
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