Explainable AI Market by Offering (Solutions and Services), by Deployment Mode (Cloud-Based and On-Premise), by Application (Medical, Industrial, Cyber Security, Financial Services, Customer Service, and Other Applications), and by End-User Industry (BFSI

Explainable AI Market by Offering (Solutions and Services), by Deployment Mode (Cloud-Based and On-Premise), by Application (Medical, Industrial, Cyber Security, Financial Services, Customer Service, and Other Applications), and by End-User Industry (BFSI, Healthcare & Biotechnology, Retail & E-Commerce, Manufacturing, Telecommunications, Public Sector, Military & Defence, and Other Industries) – Global Opportunity Analysis and Industry Forecast, 2023–2030

Explainable AI Market
Domain - ICT & Media
Sub Domain - Cloud
The Explainable AI Market size was valued at USD 5.10 billion in 2022, and is predicted to reach USD 24.58 billion by 2030, with a CAGR of 21.5% during the forecast period, 2023–2030.

The surge of Industry 4.0, characterized by the convergence of advanced technologies and digital transformation across different industries, is pivotal in propelling the demand for explainable AI (XAI). In June 2022, the World Economic Forum and McKinsey conducted a collaborative survey, identifying 103 sites worldwide as great examples of Industry 4.0. These companies have successfully transformed their factories by embracing digital technologies. Through Industry 4.0, these organizations have become more agile and customer-focused than before by leveraging digital tools to enhance their operations. Moreover, integrating AI and XAI methods with Industry 4.0 technologies offers a wide range of accurate and high-quality applications.

In addition, with the growing adoption of deep learning and neural networks for critical decision-making processes, there is a growing need to understand and explain the underlying mechanisms of these models. For instance, in March 2023, Shopify and Google Cloud collaborated to showcase an integration that empowers retailers utilizing Shopify's Commerce Components with advanced AI and Google-quality search capabilities.

However, the lack of individuals equipped with the essential knowledge and training in data ethics, bias mitigation, transparency, and interpretability presents a significant restraint. Without the necessary skills and training, there is a risk of developing AI models that are biased, uninterpretable, or lack transparency, undermining trust and hindering the wider adoption of XAI solutions. On the other hand, the regulatory requirements by the government organizations will create opportunities for the deployment of explainable AI solutions as businesses and organizations seek to comply with the regulations and ensure transparency in their AI-driven decision-making processes.

Segment Overview
The global explainable AI market is segmented on the basis of offering, deployment mode, application, end-user industry, and region.
 By offering, the market is classified into solutions and services.
 By deployment mode, the market is segmented into cloud-based and on-premise.
 By application, the market is categorized into medical, industrial, cyber security, financial services, customer service, and other applications.
 By end-user industry, the market is divided into BFSI, healthcare & biotechnology, retail & e-commerce, manufacturing, telecommunications, public sector, military & defence, and other industries.
 Region-wise, the market is segmented into North America, Europe, Asia-Pacific, and rest of the world (RoW).

Regional Analysis
North America is projected to hold a dominant share of the market
North America dominates the explainable AI market, and is expected to remain dominant throughout the forecast period. This is attributed to the various regulations and standards set by market giants such as Google, Microsoft, IBM, and others to meet the demand for transparency and interpretability in AI algorithms. This call for responsible regulation creates a favorable environment for developing and adopting XAI solutions in the region. Moreover, the increasing number of frauds and cyber-attacks across various industry verticals is a significant factor driving the growth of the explainable AI industry. The Mexican Cybersecurity Association (AMECI) reported a staggering 85 billion attempted cyber-attacks in Mexico during the first half of 2022, representing a notable 40% increase compared to the same period in 2021. Furthermore, Fortinet, a cybersecurity company, highlights that Mexico had the highest level of ransomware distribution activity in the region during that period, detecting over 18,000 instances. Implementing XAI in cybersecurity enables organizations and security experts to understand and uncover the underlying mechanisms behind attacks, facilitating proactive defensive measures and mitigating potential vulnerabilities.

Key Market Players
The key players operating in the explainable AI industry include companies such as:
• IBM Corporation
• Alphabet, Inc. (Google)
• Microsoft Corporation
• Intel Corporation
• SAS
• C3 AI
• Equifax
• FICO
• Salesforce
• H2O.ai

Recent Developments
May 2023
IBM introduced Watsonx, a groundbreaking AI platform designed to enable businesses to fully leverage the capabilities of AI. With a strong emphasis on ethics and accountability, Watsonx.governance serves as a robust framework for developing a responsible and transparent AI workforce. By providing guidelines for XAI, this component ensures that organizations can comprehend the reasoning behind AI model decisions, fostering trust and confidence among their valued customers.

October 2022
Azure Machine Learning announced public preview updates, bringing new enhancements and features to the platform. The updates include improved model explainability capabilities, allowing users to gain insights into how AI models make predictions and decisions. With these advancements, Azure Machine Learning continues to empower organizations to build and deploy XAI solutions at scale.

May 2023
Salesforce announced the release of OmniXAI version 1.3.0. This new release introduces several enhancements and features to improve the interpretability and transparency of AI models. With OmniXAI, developers can gain insights into how AI models make predictions, enabling them to understand the decision-making process and address potential biases or errors. The release of version 1.3.0 demonstrates Salesforce's commitment to advancing XAI and empowering developers to build more trustworthy and responsible AI systems.

KEY BENEFITS
• The explainable AI market report provides a quantitative analysis of the current market and estimations from 2023 to 2030. This analysis assists in identifying the prevailing market opportunities.
• The study comprises a detailed analysis of the explainable AI market trends, including current and future trends for depicting prevalent investment pockets in the market.
• The information related to key drivers, restraints, and opportunities and their impact on the explainable AI market is provided in the report.
• The competitive analysis of the market players along with their market share in the explainable AI market is provided in the report.
• The SWOT analysis and Porter’s Five Forces model are elaborated in the study.
• The value chain analysis in the market study provides a clear picture of the role of stakeholders.