Artificial Intelligence of Things [AIoT] Market Size, Share, By Component, Deployment, Application, Industry, and Region - Trends, Analysis, and Forecast till 2035

• In 2024, the artificial intelligence of things [AIoT] market size is expected to increase at a rate of USD 170.6 Billion.
• By 2035, the target market was worth USD 18.37 Billion.
• The market is expanding at a CAGR of 27.7%.

Artificial intelligence of things [AIoT] represents the convergence of artificial intelligence (AI) with the internet of things (IoT), enabling smarter, more efficient systems through intelligent decision making and automation. The target market is experiencing significant growth as industries increasingly adopt intelligent connected systems to enhance efficiency and customer experiences.

For instance, in June 2023, Dahua Technology, a world-leading video-centric AIoT solution and service provider, held the Smart Building Global Summit on June 7 to 8 2023, at its global headquarter in Hangzhou. The event brought together more than 50 senior executives and industry leaders from world-renowned real estate companies to share current challenges, insights into the latest trends, and their own industry experiences and practices.

Key Takeaways:

• North America held the largest share of the market in 2024 due to the significant investments in AI and IoT initiatives and a thriving ecosystem of leading technology companies and startups across the region.
• Asia Pacific is expected to be the fastest-growing market during the forecast period owing to the increasing deployment of IoT devices and advancements in connectivity technologies that contribute to the rising demand for AIoT applications across diverse industries in the region.
• By component, the hardware segment is expected to account for the largest share of the artificial intelligence of things [AIoT] market in the upcoming years. The growth is attributed to the implementation of AIoT solutions across a range of industries depends on these hardware components since they are necessary for connectivity and data collecting.

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Key Drivers of Target Market:

Rising Cloud Computing Adoption is Expected to Boost Market Growth

Expanding use of cloud infrastructure fuels the focused market growth by offering scalable, real-time data processing and storage capabilities.

• For Instance, in May 2024, Bharti Airtel and Google Cloud entered into a long-term collaboration to deliver cloud solutions to Indian businesses. The strategic collaboration will offer a suite of cutting-edge cloud solutions from Google Cloud to fast-track cloud adoption and modernization for Airtel’s customers.

Increasing 5G Network Expansion to Speed Up Market Expansion

The deployment of 5G technology is expected to enhance artificial intelligence of things applications with faster data transfer rates and lower latency, further enhancing the artificial intelligence of things [AIoT] market growth. This is critical for applications such as autonomous vehicles, smart cities, and also industrial automation. 

• For Instance, in October 2023, According to chief technology officer of Vodafone Idea (Vi), Vodafone Idea (Vi) has received equity funding, plans to launch next generation (5G) commercial services by March 2025 in 17 circles, beginning with Delhi and Mumbai. By June of the same year, the company hopes to have 4G coverage in at least 90% of India.

Restraints:

Data Privacy and Security Challenges Can Hamper Target Market Growth

Large volumes of sensitive data must be handled when AI and IoT are integrated, which raises questions about cyber security threats and illegal access. Ensuring strong security frameworks becomes more difficult as the number of networked devices grows.    

• Counterbalance Statement: While data privacy and security challenges pose significant risks in the target market, the integration of advanced security measures can mitigate these risks. Organizations are increasingly implementing robust encryption, strong authentication protocols, and continuous monitoring systems to protect sensitive data from unauthorized access and cyber threats. 

Opportunities & Market Trends:

Advancements in Edge Computing: 

• The integration of edge computing with AIoT solutions enable real time data processing closer to the source, which reduce latency and bandwidth requirements. This capability enhances operational responsiveness and privacy by minimizing data transfer to centralized cloud systems.
• For instance, in May 2024, Tata Communications unveiled CloudLyte, a fully-automated edge computing platform, for enterprises as businesses become even more hyper connected. Low latency applications and intelligent decision-making are becoming vital for real-time data processing, essentially edge computing enabled by 5G and IoT.

The artificial intelligence of things [AIoT] market is classified into component, deployment, application, industry, and region.

Component:

Artificial intelligence of things [AIoT] market by component is categorized into hardware, software, and services. The hardware segment is expected to dominate over the forecast period as it includes AI-enabled devices, such as IoT sensors, gateways, and edge computing devices that form the foundation of AIoT systems by enabling data collection and connectivity.

Deployment:

By deployment, the artificial intelligence of things [AIoT] market is segmented into cloud based, and on-premise. The cloud based segment dominates the focused market share as it is boosting by advantages of cloud computing such as scalability, cost-effectiveness, and the ability to manage and process large volumes of data efficiently.

• For instance, in November 2023, ST AIoT Craft, a new web-based tool, simplifies developing and provisioning node-to-cloud AIoT (Artificial Intelligence of Things) projects that use the machine learning core (MLC) of ST’s smart MEMS sensors. The MLC is unique to the ST MEMS portfolio and enable decision-tree learning models to run directly in the sensor.

Application:

By application, the Artificial intelligence of things [AIoT] market is segmented into inventory management, energy consumption management, predictive maintenance, video surveillance, robust asset management, supply chain management, and others. The video surveillance segment dominates the focused market share as it is driven by increasing concerns over security and the need for enhanced monitoring solutions across various sectors.

• For instance, in April 2024, Lumana has launched its next-generation video security platform that uses artificial intelligence (AI) and distributed hybrid cloud architecture. The video surveillance enterprise, which is expected to more than triple in the next ten years, might undergo a significant transformation due to Lumana's AI technology. According to Lumana, its technology enables businesses to improve operational effectiveness, expedite incident response, and strengthen security and safety protocols.  

Industry:

By Industry, the artificial intelligence of things [AIoT] market is segmented into healthcare, agriculture, manufacturing, BFSI, automotive & transportation, retail, logistics, and others. The manufacturing segment dominates the focused market share as the integration of AI with IoT devices allows manufacturers to enhance automation, improve efficiency and reduce operational costs through predictive maintenance and optimized supply chain management.

Region:

Geographically, the market is studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

North America: This region is accounted to have a largest artificial intelligence of things [AIoT] market share driven by advanced technological infrastructure, robust research and development activities, and high adoption rates by the industries. This region is further enhanced by the presence of major AIoT technology providers and startups boosting a competitive and innovative ecosystem.

Asia Pacific: This is largest and fastest-growing region in target market as the proliferation of IoT devices is combined with AI capabilities, which supports significant innovations across various sectors such as manufacturing, healthcare and smart cities in this region.

For instance, in May 2024, Hikvision India showcased its cutting-edge AIoT technology-enabled products and solutions at the Security and Fire Expo (SAFE) West India in Mumbai. The event, held at the Bombay Exhibition Centre from May 9 to 11, brought together industry experts, government officials, and renowned exhibitors under one roof.

Artificial Intelligence of Things [AIoT] Market Report Scope:

Segmentation:

By Component:

• Hardware
• Software
• Services

By Deployment:

• Cloud based
• On-premise

By Application:

• Inventory Management
• Energy Consumption Management
• Predictive Maintenance
• Video Surveillance
• Robust Asset Management
• Supply chain Management
• Others

By Industry:

• Healthcare
• Agriculture
• Manufacturing
• BFSI
• Automotive & Transportation
• Retail
• Logistics
• Others 

By Region:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Russia
  • Italy
  • Spain
  • Netherlands
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • Indonesia
  • Malaysia
  • South Korea
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • Israel
  • South Africa
  • Rest of Middle East & Africa

The key players operating in the artificial intelligence of things [AIoT] market include IBM, Cisco, Amazon Web Services, Inc., Google, and among others. The focused market is characterized by a wide variety of participants, which include well-known IT companies, specialized suppliers of AIoT solutions, and up-and-coming entrepreneurs. These companies are using a variety of techniques, such as launching new and innovative technologies, to boost the target market presence and encourage innovation as the industry keeps growing.

• For instance, In June 2023, ASUS announced that ASUS IoT, the global AIoT solution provider, has introduced its Co-Winning approach for the ASUS AIoT Partner Alliance Program. The new approach aims to revolutionize the AI and IoT sectors with its strategic model and collaborative advantages.

List of Key Players in the Market:

• IBM
• Cisco
• Amazon Web Services, Inc.
• Google
• Microsoft
• Oracle
• Hewlett Packard Enterprise Development LP
• Intel
• Hitachi
• SAP
• m’AI Touch Technology Co., Ltd.
• Moon Innovations
• easemyai
• Aritium Technologies
• iCHASE

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• In December 2024, Tapway, a developer of Vision AI software solutions and Asteria Corporation launched AIoT Suite, an integrated one-stop solution platform offering Tapway’s SamurAI Vision AI software and Asteria’s Gravio no-code IoT software. The new AIoT Suite platform enable companies to automate various tasks, such as quality inspection production lines, PPE compliance enforcement, health, safety, and environment (HSE) monitoring at warehouses, and more.
• In July 2024, Xiaomi India is set to launch a range of products across its portfolio. This launch will feature the 5G Star-Redmi 13 5G, and an impressive new AIoT lineup, including the Redmi Buds 5C, Xiaomi RVC X10, and Xiaomi Pocket Power Bank 10000mAh and Xiaomi Power Bank 4i 10000mAh.
• In February 2024, Xiaomi unveiled its Human x Car x Home platform at MWC Barcelona 2024, as the company steps up efforts to redefine the boundaries of technology integration by seamlessly meeting all user needs within one smart ecosystem. Xiaomi’s transition from Smartphone x AIoT to its new Human x Car x Home ecosystem merges personal devices, smart home products and cars, not only providing seamless connectivity of devices, but offering real-time coordination and collaboration with industry partners.

Analyst View:

Artificial intelligence of things [AIoT] market is rapidly evolving as a convergence of artificial intelligence and the internet of things, which offers advanced capabilities, such as predictive analytics, real time decision making and also automation across diverse industries. Furthermore, these factors are also anticipated to boost the target market growth in future years.

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