Global Artificial Intelligence-as-a-Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Global Artificial Intelligence-as-a-Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global artificial intelligence-as-a-service market is expected to register a CAGR of 48.9 % during the forecast period (2022 - 2027). With the increasing number of enterprises and competition, companies are rigorously trying to integrate artificial intelligence (AI) technology into their application, business, analytics, and services. Moreover, companies are trying to reduce their operational cost to increase profit margins, due to which Artificial Intelligence-as-a-Service (AIaaS) is gaining more prominence over the cloud. Notably, companies are more interested in cloud-based machine learning, which helps in experimenting with their offerings.

Key Highlights

• The rising trend of multi-cloud functioning and the growing need for cloud-based intelligence services are also increasing the demand for AI as a service. According to IBM, by 2021, 98% of the organization's plans will adopt multi-cloud architectures, with only 41% having a multi-cloud management strategy and just 38% having procedures and tools to operate a multi-cloud environment. This creates a massive opportunity for AI services.
• Furthermore, the IBM AI adoption index 2022 states, " A tipping point has been reached in using artificial intelligence (AI) and its effects on businesses and society. The adoption rate of AI globally increased significantly and is at 35%, up four points from the previous year. And the usage of AI is nearly universal in several sectors and nations. Organizations worldwide are quickly gaining new advantages and efficiencies from AI thanks to new automation capabilities, improved usability and accessibility, and a more comprehensive range of tried-and-true use cases. Virtual assistants and other ready-made corporate solutions like IT incorporate AI into their operations. The fact that 44% of firms are working to integrate AI into current apps and processes supports the argument that accessibility is important.
• Many government organizations, especially in emerging economies, also understand the benefits and power of AI; hence, they are extensively promoting AI-based infrastructure development. For instance, Niti Aayog in India launched a national program on AI, including R&D, with increased budget allocation for Digital India to promote AI, machine learning, 3D printing, and other technologies.
• The need for AI services has grown, and many cloud providers offer AIaaS and MLaaS. As a result, the global cloud market recorded significant growth in the healthcare segment in 2020. AI and ML technology is being used considerably to fight COVID-19. For instance, several researchers are using machine learning to create a smart monitoring system that tracks and detects suspected COVID-19 infected persons. One proposed system is a new framework integrating machine learning, cloud, fog, and Internet of Things (IoT) technologies to create a COVID-19 disease monitoring and prognosis system.
• O'Reilly's 2021 AI Adoption in the Enterprise report, which surveyed more than 3,500 business leaders, found that a lack of skilled people and difficulty hiring topped the list of challenges in AI, with 19% of respondents citing it as a "significant" barrier. The O'Reilly report suggests that the second-most significant barrier to AI adoption is a lack of quality data, with 18% of respondents saying their organization is only beginning to realize the importance of high-quality data.

Key Market TrendsHealthcare is One of the Segment that is Significantly Adopting AI

• Artificial intelligence as a service in the medical field is driven by several factors, including the need to manage data more effectively and optimize healthcare costs, the growth of public-private partnerships, and the increased regional spending on healthcare. Additionally, the market for artificial intelligence in the medical sector is anticipated to grow as opportunities in geriatric population care with the aid of AI technology and imaging & diagnostics to generate data for research development arise.
• According to National Centre for Biotechnology Information survey 2021, Every year, 7,000-9,000 Americans die as a result of a medication error. Each year, the United States spends about USD 40 billion on patients who have had drug mishaps. Artificial intelligence can assist providers in various patient care and intelligent health systems. Artificial intelligence techniques ranging from machine learning to deep learning are prevalent in healthcare for disease diagnosis, drug discovery, and patient risk identification, avoiding inefficiencies caused by care delivery failures, overtreatment, and improper care delivery.
• Small-molecule drug discovery can benefit from AI in four ways: access to new biology, improved or unique chemistry, higher success rates, and speedier and less expensive discovery procedures. For instance, the FDA's Center for Drug Evaluation and Research (CDER) approved 50 brand-new pharmaceutical and biological products in 2021. 33 of the 50 novel medications and biological products approved for use had tiny molecules, while 17 were monoclonal antibodies and other large molecules. However, biologic approvals have continuously risen during the past few years. Such huge approvals for drugs will drive the studied market.
• According to the Artificial index report, 2022 by Sandford university states that 29% of Healthcare/ Pharma industries adopt AI for Product/ service development, 17% for service operation, 14% for marketing and sales, and 13% for risk management. The pharma companies have met intelligent medical technologies (iAI-powered) with greater interest partly because it enables a 4P model of medicine (Predictive, Preventive, Personalized, and Participatory) and, therefore, patient autonomy in ways that could not be possible.
• In December 2021, Rheumatoid arthritis treatment choices frequently relied on trial and error. Researchers at the Mayo Clinic are currently investigating pharmacogenomics and artificial intelligence (AI) use to anticipate how patients will respond to medicines and tailor care. Results were released in the journal Arthritis Care & Research. The study aimed to anticipate how patients would react to methotrexate, one of the most widely used treatments for rheumatoid arthritis. AI was utilized to assess the initial response to methotrexate in patients with early-stage rheumatoid arthritis using patient data that comprised genomic, clinical, and demographic details. The Mayo Clinic and the Pharmacogenetics of Methotrexate in Rheumatoid Arthritis (PAMERA) consortium collaborated to conduct early genome-wide association studies, which provided the data for the study.

North America Holds the Major Share of the Market

• The United States has a robust innovation ecosystem fueled by strategic federal investments into advanced technology, complemented by the presence of visionary scientists and entrepreneurs coming together from across the world, and renowned research institutions, which have propelled the development of AI in the North American region.
• According to National Security Commission on Artificial Intelligence, In its final report, it proposed Congress increase federal R&D funding for AI by a factor of two annually, up to a total of USD32 billion in fiscal 2026. The federal R&D budget will be increased by 28% from FY 2021 authorized levels to more than USD 204 billion under the Biden administration's fiscal 2023 budget plan. The National AI Research Institutes, both new and established, would get some of that funds. To address the difficulties of AI research and workforce development, these institutes bring together the commercial sector, organizations, academics, and federal, state, and municipal authorities. Such government initiatives for the development of AI will drive the studied market.
• Further, In Feb 2022, A recent study by LXT found that mid-to-large U.S. firms are heavily investing in artificial intelligence (AI), and 40% of those organizations rate themselves at the three highest levels of AI maturity, having previously completed operational to revolutionary implementations. AI training data, in terms of both quality and investment, is a critical factor in success for all enterprises. The study discovered that seven in ten enterprises spend USD1 million or more of their budget on AI and that over a third of high-revenue companies spend between USD51 million and USD100 million on it.
• Further, in January 2021, FDA released an action plan to build a coordinated approach to enhance the focus on AI. This was mainly fueled by the strategically advancing science and evidence for digital health technologies. To do so, the FDA outlined plans to build supporting developments for AI to evaluate and improve algorithms for the healthcare sector. Such initiatives could trigger the launch of startups in the country.
• In November 2021, NuEnergy.ai announced the launch of their hosted Machine Trust Platform (MTP) software designed to support the ethical and transparent governance and measurement of artificial intelligence (AI) deployments. The software platform will launch through a pilot with the Royal Canadian Mounted Police (RCMP), which is the first testing department approved through Innovation, Science and Economic Development Canada (ISED) and the Innovative Solutions Canada (ISC) program to test the R&D innovation.

Competitive Landscape

The Artificial Intelligence-as-a-Service market is fragmented, with most companies focusing on a silo approach to developing solutions. In the future, AI will be increasingly embedded within many systems and applications in everything from data management to retail shopping. The fragmented market has a vast number of players who have been making efforts to increase its market footprint by concentrating on product diversification and development. Some of the recent developments in the market are:

• August 2022: CornerstoneAI announced cooperation, a provider of ethical and responsible AI services and solutions, and Carahsoft Technology Corp., a reputable government IT solutions provider. Through its reseller partners, contracts with NASA Solutions for Enterprise-Wide Procurement (SEWP) V, OMNIA Partners, and the National Cooperative Purchasing Alliance (NCPA), Carahsoft will act as CornerstoneAI's Master Government Aggregator, making their artificial intelligence (AI) and machine learning (ML) solutions accessible to the public sector.
• June 2022: A strategic relationship between Wipro and the media giant Eros Investments has been established to scale a machine learning and artificial intelligence-based content localization solution globally. For international media companies and over-the-top (OTT) streaming platforms, the technology will automate the labor-intensive process of subtitling and dubbing with accuracy close to that of a human.

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