Explainable AI Market By Component (Solution, Services) , By Deployment (Cloud, Ob-Premise) By Application (Fraud and Anomaly Detection, Drug Discovery & Diagnostics, Predictive Maintenance, Supply Chain Management, Identity and Access Management, Others) By End-Use (Healthcare, BFSI, Aerospace & Defense, Retail and Ecommerce, Public Sector & Utilities, IT & Telecommunication, Automotive) : Global Opportunity Analysis and Industry Forecast, 2024-2033
Explainable AI Market
The explainable AI market was valued at $6.2 billion in 2023 and is projected to reach $39.6 billion by 2033, growing at a CAGR of 20.3% from 2024 to 2033.
Explainable AI (XAI) is a process that elaborates on the output provided by AI or ML algorithms, along with their potential impact or biases. It helps users to characterize the precision and transparency of AI models. Organizations utilize XAI to address the challenges and limitations associated with the AI models integrated into their operations. XAI is crucial to enhance the trust of users toward AI/ML algorithms and reduce potential risk & liabilities for the organizations.
Increase in the penetration of AI into crucial public sectors such as finance and healthcare is boosting the adoption of XAI, thereby driving the growth of the explainable AI market. In addition, rise in concerns pertaining to data privacy is promoting the utility of XAI for users to understand the potential use cases of data. The trend of integrating interactive models within XAI is anticipated to acquire notable traction in coming years. This integration is expected to enable users to connect with AI systems to ask questions, offer feedback, and ask for further details in the provided explanation. The interactive feature is poised to enhance the potential of AI algorithms by enhancing the trust of users upon the underlying logical explanations.
However, susceptibility of the critical information present in AI algorithms regarding unauthorized access deters several organizations from assimilating the models into their operations. This reduces the applicability of XAI and hampers the growth of the explainable AI market. Furthermore, limited awareness among several small-scale organizations regarding the potential of XAI restrains the market development. On the contrary, the rapidly expanding AI infrastructure is anticipated to present remunerative opportunities for the explainable AI market in the future. As per “The State of AI Infrastructure at Scale 2024” survey conducted by ClearML—an open-source model for AI/ML and LLM models—approximately 96% of the participants planned to expand their AI infrastructure. This result is an indicator of the bright future of the explainable AI market.
Segment ReviewThe explainable AI market is segmented into component, deployment, application, end use, and region. On the basis of component, the market is bifurcated into solution and services. Depending on deployment, it is classified into cloud and on-premise. As per application, it is divided into fraud & anomaly detection, drug discovery & diagnostics, predictive maintenance, supply chain management, identity & access management, and others. According to end use, it is categorized into healthcare, BFSI, aerospace & defense, retail & e-commerce, public sector & utilities, IT & telecommunication, and automotive. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Key FindingsOn the basis of component, the solution segment held a high share of the market in 2023.
Depending on deployment, the cloud segment acquired a high stake in the market in 2023.
As per application, the fraud & anomaly detection segment accounted for a high market share in 2023.
According to end use, the IT & telecommunication segment dominated the market in 2023.
Region wise, North America was the highest revenue generator in 2023.
Competition AnalysisThe major players of the global explainable AI market include IBM Corporation, Microsoft Corporation, Amelia US LLC, Google LLC, Arthur.ai, Ditto.ai, Intel Corporation, Amazon Web Services Inc., NVIDIA Corporation, Mphasis Limited, and Alteryx, Inc. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships, to strengthen their foothold in the competitive market.
Key Market SegmentsBy ComponentSolution
Services
By DeploymentCloud
Ob-Premise
By ApplicationFraud and Anomaly Detection
Drug Discovery Diagnostics
Predictive Maintenance
Supply Chain Management
Identity and Access Management
Others
By End-UseHealthcare
BFSI
Aerospace Defense
Retail and Ecommerce
Public Sector Utilities
IT Telecommunication
Automotive
By RegionNorth America
U.S.
Canada
Europe
France
Germany
Italy
Spain
UK
Rest of Europe
Asia-Pacific
China
Japan
India
South Korea
Australia
Rest of Asia-Pacific
LAMEA
Latin America
Middle East
Africa
Key Market PlayersIBM Corporation
Microsoft Corporation
Amelia US LLC
Google LLC
Arthur.ai
Ditto.ai
Intel Corporation
Amazon Web Services Inc.
NVIDIA Corporation
Mphasis Limited
Alteryx, Inc.