Natural Language Processing (NLP) Market by Offering (Solutions, Services), Type (Rule-based, Statistical, Hybrid), Application (Sentiment Analysis, Social Media Monitoring), Technology (IVR, OCR, Auto Coding), Vertical & Region - Global Forecast to 2028

Natural Language Processing (NLP) Market by Offering (Solutions, Services), Type (Rule-based, Statistical, Hybrid), Application (Sentiment Analysis, Social Media Monitoring), Technology (IVR, OCR, Auto Coding), Vertical & Region - Global Forecast to 2028

The global natural language processing market is valued at USD 18.9 billion in 2023 and is estimated to reach USD 68.1 billion by 2028, registering a CAGR of 29.3% during the forecast period. Businesses gather a vast amount of complex data from various sources, such as social media sites and customer interactions. However, this data is often unstructured, making it difficult to derive meaning from it. NLP technology offers machines the ability to understand human languages, enabling companies to transform unstructured data into structured formats. By using sentiment analytics techniques, NLP can also understand the sentiment behind human texts or voice. This technology has enabled businesses to better understand their customers and improve their approaches to customer service. Many companies have even been able to create their own voice-driven interfaces using NLP's advanced tools and applications. This has helped them understand customer queries and provide timely and automated responses. NLP technology has also allowed organizations to expand the use of business intelligence software across different departments and receive important data insights.

The Solution segment is projected to hold the largest market size during the forecast period

The adoption of AI solutions is increasing worldwide, as people become more aware of their potential benefits. NLP is a branch of AI that deals with unstructured data processing and mining. It is commonly used to analyze text, voice, and video content, enabling AI agents to understand the nuances and contexts of human language. Companies like IBM, Microsoft, and Google offer NLP solutions with innovative features, such as sentiment analysis, text classification, summarization, and speech recognition. Some vendors provide sophisticated NLP software tools or APIs with customized features tailored to individual user demands in the market.

By Type, Hybrid Segment is registered to grow at the highest CAGR during the forecast period

Hybrid NLP is an advanced approach that combines the strengths of rule-based and statistical NLP methods to provide more accurate language understanding and processing. This fusion integrates predefined linguistic rules with statistical models and ML techniques, enabling for better analysis of vast amounts of data. Hybrid NLP provides several advantages, especially when users do not have proper datasets and need to implement the statistical method with the least dataset. For instance, in the grammar correction system, a module identifies multi-word expressions and then uses the rule-based method to identify incorrect patterns and generate correct ones. Hybrid NLP is particularly effective in scenarios where precise rule-based processing is essential but also benefits from the flexibility and adaptability of statistical approaches. Hybrid NLP is widely used in various NLP applications, such as chatbots, virtual assistants, sentiment analysis, and text classification, providing a versatile solution to tackle the diverse challenges of language understanding and generation. It is also used in eCRM, sentiment analysis, machine translation, and report generation.

By solutions, Software tools segment is anticipated to account for the largest market size during the forecast period

Software tools offered in the NLP market in the form of SDKs, APIs, and frameworks that enable users to integrate NLP capabilities with their existing software. The NLP market witnesses significant developments due to flexible software and SDK kits. Such software tools are used with other solutions to carry out different tasks, such as text and speech analytics. NLU-based business applications are also finding the increased use of Interactive Voice Response (IVR) and virtual assistants in telecommunications and other verticals for enabling users to interact with such systems in their natural language without constraining a set of fixed responses. With statistical techniques, vendors integrate self-learning capabilities to ensure systems keep learning based on user commands and act accordingly in the future. Such techniques have also improved accuracy and helped systems deliver relevant responses. For instance, Google offers Cloud Natural Language APIs, which emphasize entity extraction, sentiment analysis, syntax analysis, and categorization applications.

Asia Pacific is projected to witness the highest CAGR during the forecast period.

The Asia Pacific Natural Language Processing Market includes countries such as China, Japan, India, ASEAN Countries, and Rest of Asia Pacific, which comprises countries like Sri Lanka, Bangladesh, and Myanmar. The region is expected to experience significant growth in the adoption of NLP software and services due to government initiatives, policies, and investments, along with the commercialization of AI and ML technologies. As the region holds more than 50% of the world's population, any technological shifts like those being heralded by AI are expected to shape the future of the region. Many Asian countries such as China, India, Japan, and others are leveraging information-intensive AI technologies, with conversational AI being one of the leading technology trends.

Breakdown of primaries

In-depth interviews were conducted with Chief Executive Officers (CEOs), innovation and technology directors, system integrators, and executives from various key organizations operating in the natural language processing market.

By Company: Tier I: 35%, Tier II: 45%, and Tier III: 20%

By Designation: C-Level Executives: 35%, Directors: 25%, and Others: 40%

By Region: North America: 45%, Asia Pacific: 30%, Europe: 20%, RoW: 5%

Major vendors offering natural language processing solutions and services across the globe are IBM (US), Microsoft (US), Google (US), AWS (US), Meta (US), 3M (US), Baidu (China), Apple (US), SAS Institute (US), IQVIA (UK), Oracle (US), Salesforce (US), OpenAI (US), Inbenta (US), LivePerson (US), SoundHound AI (US), MindMeld (US), Veritone (US), Dolbey (US), Automated Insights (US), Bitext (US), Conversica (US), UiPath (US), Addepto (US), RaGaVeRa (India), Observe.ai (US), Eigen (US), Gnani.ai (India), Crayon Data (Singapore), Narrativa (US), deepset (US), Ellipsis Health (US), DheeYantra (US), Verbit.ai (US), Rasa (US), MonkeyLearn (US), TextRazor (England), and Cohere (Canada).

Research Coverage

The market study covers natural language processing across segments. It aims at estimating the market size and the growth potential across different segments, such as offering, type, application, technology, vertical, and region. It includes an in-depth competitive analysis of the key players in the market, along with their company profiles, key observations related to product and business offerings, recent developments, and key market strategies.

Key Benefits of Buying the Report

The report would provide the market leaders/new entrants in this market with information on the closest approximations of the revenue numbers for the overall market for natural language processing and its subsegments. It would help stakeholders understand the competitive landscape and gain more insights better to position their business and plan suitable go-to-market strategies. It also helps stakeholders understand the pulse of the market and provides them with information on key market drivers, restraints, challenges, and opportunities.

The report provides insights on the following pointers:

Analysis of key drivers (Advancements in text-analyzing computer programs, Rising need for enterprise solutions to streamline business operations for better customer experience, Surging demand for cloud-based NLP solutions to reduce overall costs and enhance scalability and Demand for predictive analytics to reduce risks and identify growth opportunities), restraints (Lack of contextual understanding leading to ambiguity, Complexities due to code-mixed language usage while implementing NLP solutions and Limitations in developing NLP technology using neural networks), opportunities (Generative AI acting as catalyst for transforming NLP Market, Need for developing big data technology for actionable business intelligence and Increasing demand for effective data management and advanced data analytics across healthcare), and challenges (Lack of multilingual proficiency and Regulatory and privacy concerns over data security and Interoperability and reliability issues while deploying NLP algorithms) influencing the growth of the natural language processing market

Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the natural language processing market.

Market Development: Comprehensive information about lucrative markets – the report analyses the natural language processing market across varied regions.

Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in natural language processing market strategies; the report also helps stakeholders understand the pulse of the natural language processing market and provides them with information on key market drivers, restraints, challenges, and opportunities.

Competitive Assessment: In-depth assessment of market shares, growth strategies and service offerings of leading players such as IBM (US), Microsoft (US), Google (US), AWS (US), Meta (US) and 3M (US) among others in the natural language processing market.