AI Governance Market Scope and Overview
The AI Governance Market is poised for significant growth in the coming years, with a projected market size of USD 1.9 billion by 2031. This growth is attributed to increasing concerns surrounding the ethical use of artificial intelligence and the implementation of regulations by governments and organizations worldwide. As AI becomes more common across various industries, the need to ensure its responsible development and deployment is becoming increasingly critical.
Several factors are driving the demand for AI governance solutions:
- As technology advances, concerns about fairness, explainability, and accountability for AI decisions are increasing. Businesses are recognizing the need for robust frameworks to manage these risks and ensure responsible development.
- Governments worldwide are actively developing guidelines and regulations to address data privacy, security, and fairness concerns around new technologies. To comply with these regulations, organizations need to adopt AI governance solutions.
- AI is being integrated rapidly across various industries. This widespread adoption necessitates strong governance practices to ensure responsible use in diverse applications.
AI Governance Market Segments Analysis
By Component: Based on components, the solutions segment dominated the market with more than 65% market share in the AI governance market in 2023. Due to the presence of well-dispersed market competitors, the solutions sector is expected to continue dominating during the forecast period 2024-2031. To meet the growing demand from customers in various end-user industries, such providers are constantly focusing on providing new creative solutions with technological advancements. For example, in October 2021, Datatron announced enhancements to its MLOps and AI management solution, making it easier to catalog, use, track, and manage companies’ AI/ML models.
By Organization Size: Large companies currently dominate the market due to their earlier adoption of advanced technologies and stricter compliance requirements. However, smaller and mid-sized businesses (SMEs) are expected to see significant growth in the coming years, driven by increasingly affordable and accessible solutions for managing these technologies effectively. To strengthen their capabilities in this area, larger corporations have begun acquiring smaller firms. For instance, in July 2020, IBM purchased WDG Automation, a company specializing in managing and ensuring compliance with advanced technologies. This acquisition expands IBM’s existing range of automation solutions for both IT operations and business processes.
By Vertical: Based on verticals, the government and defense segment currently dominate the AI governance market due to the critical need for ethical and transparent AI use in national security applications. However, sectors like healthcare and life sciences are expected to witness significant growth in the forecast period 2024-2031, as AI adoption increases in these domains.
Market Segmentation and Sub-Segmentation
On the Basis of Component
- Solution
- Services
On the Basis of Deployment Mode
- Cloud
- On-premises
On the Basis of Organization Size
- Large enterprises
- Small and medium-sized enterprises
On the Basis of Vertical
- BFSI
- Government and Defense
- Healthcare and Life Sciences
- Media and Entertainment
- Retail
- IT and Telecom
- Automotive
- Other Verticals
Regional Analysis
North America currently holds the largest market share in the AI governance market due to the presence of major technology companies, well-established economies, and a growing emphasis on AI governance regulations. A significant share of the market is expected to be captured by North America due to the increased use of artificial intelligence (AI) by both commercial and government organizations. The development of plans and regulations for AI and automated systems by American legislators and government bodies in recent years can be attributed to this market growth, aiming to strike a balance between mitigating the potential negative impacts of AI technology and fostering healthy competition and innovation. Furthermore, the early adoption of technologies like machine learning by businesses in developed countries like the U.S. and Canada is anticipated to fuel market expansion within the North American region. Europe is expected to witness the fastest growth rate due to increasing AI adoption and stringent data privacy regulations like GDPR.
Competitive Landscape
- Consulting firms such as Accenture, Deloitte, and McKinsey & Company offer AI governance consulting services. They advise organizations on developing AI governance strategies, implementing AI governance frameworks, and managing AI risks.
- Continuous development of new and improved AI governance solutions is key to staying ahead in this competitive market. This includes offering features like explainable AI (XAI) capabilities, advanced risk management tools, and integrations with existing AI platforms.
- Developing user-friendly and intuitive AI governance solutions can be a key advantage, especially for attracting non-technical users within organizations.
Some of the major key players studied in this report include:
- Alphabet
- Microsoft Corporation
- IBM Corporation
- Amazon Web Services
- QlikTech International AB
- TIBCO Software Inc.
- SAS Institute Inc.
- SAP SE
- Salesforce
- Other Players
Key Takeaways from the AI Governance Market
- The AI governance market offers a diverse range of solutions, including software tools, platforms, and services such as consulting, integration, and support & maintenance services.
- Organizations will prioritize data privacy and security concerns, with relevant regulations in AI governance. The growth of explainable AI (XAI) will further drive the AI governance market as organizations seek to understand the decision-making processes within their AI models.
- The Asia Pacific region is expected to show significant growth in the AI governance market due to increasing investments in AI technologies and government initiatives promoting responsible AI development.
- Collaborations between government agencies, industry associations, and technology companies play a crucial role in developing industry-wide AI governance guidelines.
Table of Contents
- Introduction
- Industry Flowchart
- Research Methodology
- Market Dynamics
- Impact Analysis
- Impact of Ukraine-Russia War
- Impact of Economic Slowdown on Major Economies
- Value Chain Analysis
- Porter’s 5 Forces Model
- PEST Analysis
- AI Governance Market Segmentation, by Component
- AI Governance Market Segmentation, by Deployment
- AI Governance Market Segmentation, by Organization Size
- AI Governance Market Segmentation, by Vertical
- Regional Analysis
- Company Profile
- Competitive Landscape
- Use Cases and Best Practices
- Conclusion
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