Growth Of AI As A Service (AIaaS) Market


Artificial intelligence as a service (AIaaS) refers to the use of pre-trained machine learning algorithms, robotic process automation (RPA) to natural language processing (NLP) in the cloud to automate business processes. In this respect, it is similar to software as a service (SaaS). However, AIaaS allows business users to access AI models without requiring advanced AI programming skills. 

This blog shares the anticipated growth figures of the AI business covering as per deployment model, end-user application, verticals, and geography. After having a view of what the future holds for you, businesses will be able to: 

  • Create strategies specifically for regional and country based on figures and facts.
  • Identify where and when to invest. 
  • Outperform against key competitors using data and the drivers and trends shaping the market. 
  • Understand customers based on the latest market research findings. 
  • Grow Businesses by strategically positioning themselves in tech run. 

Building the own AI solution for these different small services will therefore not make any sense for companies because they are all associated with substantial upfront costs and management, which is sometimes not easy for the new joiners. 

This is why businesses often look for AIaaS (Artificial Intelligent-as-a-Service).

Today, we will talk about AI as a service (AIaaS) market. What will be the growth rate and CAGR of the market? What are the major players in this market, and what are their business models? Why is the market growing? And we will answer many other such questions here. 

What is AIaaS? 

AIaaS stands for Artificial Intelligence-as-a-Service. It refers to the off-the-shelf artificial intelligence tools that help companies scale their production and implement AI techniques in their model only at a fraction of the in-house AI cost. 

As we can fetch the details from our discussions, AI is termed out to be a vast sector that encompasses multiple technologies, including NLP (Natural Language Processing), robotics, machine learning, and computer vision. 

Growth of AI As a Service: 

The global AI-as-a-Service market was valued at USD 1.35 Bn in 2016 and is estimated to reach USD 43.1 Bn by 2028, at a CAGR of 46.9% during the forecast period. The base year considered for the study is 2017, while the forecast period is between 2018 and 2028. 

The compound annual growth rate (CAGR) forecast till 2028 of the different categories of the AI market are: 

  • AI Services- 22% 
  • AI Hardware- 20.5% 
  • AI platforms- 34.6% 
  • AI System Infrastructure Software- 14.1% 
  • AI Lifecycle Software- 38.9% 
  • AI Business Services- 21.9%

The market has been bifurcated into cloud-based and on-premises deployment models based on the deployment model. 

In the global AI as a service market, the US is dominant in revenue and is expected to maintain its dominance in the coming years. In addition, the US is majorly a developed economy, which means that the large pool of small and medium enterprises (SMEs) in the country makes it an attractive market for AI as a service provider. 

There is a wide range of AI applications that businesses are looking to implement in their model, for example- chatbox, text analysis software, and various other services. These will help simplify the tasks on which they do not have the expertise, diverting their time and efforts on more critical targets towards their goal achievements. 

Market Statistics for AI-As-A-Service: 

AIaaS is the third-party provider for outsourcing AI services to organizations exploring different artificial intelligence sectors without investing vast amounts with higher risks. Big Companies like Microsoft, IBM, Google, and other market leaders have actively introduced AI services in their business models, increasing their reach and revenue without much time investments. Furthermore, high investments in the adoption of technological advancement and artificial intelligence have led to an increase in the demands for advanced analytical systems in the market, contributing to the growth of AIaaS Market Statistics. 

The rise in awareness of the benefits of cloud-based solutions and the requirement of affordable artificial intelligence experts have boosted the growth of the AIaaS market. Let’s find out the growth for AIaaS market based on segmentation and competitive analysis: 

The global market for Artificial Intelligence as a Service is segmented by organization size, technology, regions, and industry verticals. The technology segment is further divided into computer vision, machine learning, NLP’s, and other sectors. Machine Learning has the largest market share in 2017, dominating the market with increased revenue, and is expected to remain constant for the future years. 

Based on the size of the Business, AIaaS Market is divided into two sectors, small and medium enterprise, and large enterprise. Large enterprises already secured their market share in AI in 2017, leading to pressure on other firms and increased demands for AI in other user-end industries. 

Identifying its growth from the Industry Vertical aspect, the market is divided into retail, telecom, healthcare, IT, public sector, manufacturing, energy, and utility sectors. Telecom and IT sectors have dominated the AIaaS market, incorporating chatbots and other features in their business model for increased customer satisfaction and revenue.

Based on the regions, North America, Asia-Pacific, Europe, and LAMEA dominate the AIaaS market, North America contributes with its highest share. This position for North America is anticipated to be secured for future years, owning to the rise in IT infrastructure and large enterprise. 

Some big AIaaS market players like Apple Inc., Intel Inc., Salesforce Inc., IBM Corporation, and others have introduced and adopted the AI services in their models through acquisitions, product launches, and collaborations. Moreover, to deal with the growth in their market sectors, these big players focus on developing new AI services and platforms, increasing their customer reach and experiences to meet higher targets. 

For example- Amazon Web Service has launched Amazon Transcribe to their model, introducing an automatic speech recognition service that offers speech-to-text conversion and helps differentiate between other leading speakers. 

Small and new enterprises do not have enough sources to set up their own AI platforms with the market growth concept. Thereby, AIaaS increases the AI and technical support hope for these medium and small-scale enterprises, helping them compete with big players in AI sectors without huge investments. 


AIaaS can be a service sector that makes AI technology readily available for all businesses. Moreover, it provides affordable, fast, and ready-to-use solutions with minimal effort. 

Most of the companies do not opt to develop their AI in-house software. AIaaS increases your business’s chances to scale while paying for the required tools, giving you an option to upgrade to higher plans when needed. 

Find the perfect AIaaS Partner for your business to tackle all your up-front, non-expertise tasks without any extra cost for increased benefits. Algoscale is an Artificial Intelligence Solution Provider implementing creative and effective artificial intelligence solutions to assist businesses in becoming more flexible and smart. 

Our AI solutions blend business, development, and operations data to give actionable insights and give our clients a unified view of their changing business environments. This enables them to take advantage of the automation and resulting in better business outcomes over time.

We hope you found this information to be useful. Algoscale aims to deliver wisdom on a wide range of topics. Keep reading and learning new things!


Growth Of AI As A Service (AIaaS) Market

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