“Global Artificial Intelligence of Things (AIoT) Market to reach a market value of USD 95.31 Billion by 2031 growing at a CAGR of 26.9%”
The Global Artificial Intelligence of Things (AIoT) Market size is expected to reach $95.31 billion by 2031, rising at a market growth of 26.9% CAGR during the forecast period.
The manufacturing sector is propelled by the growing implementation of Industry 4.0 methodologies, wherein AIoT technologies assume a pivotal role in automating processes, minimizing downtime, and enhancing operational efficiency. Smart factories equipped with AI-powered IoT devices enable real-time monitoring, predictive maintenance, and quality control, ensuring higher productivity and cost savings. Hence, the manufacturing segment recorded 23% revenue share in the market in 2023. The growing need to optimize supply chain operations and minimize production delays further propels the demand for AIoT in manufacturing. Additionally, the ability of AIoT solutions to enhance safety and reduce energy consumption drives their adoption across diverse manufacturing industries.
The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, In January 2025, Google LLC partnered with Synaptics to accelerate the development of Edge AI devices for the Internet of Things (IoT). The collaboration integrates Google's machine learning core with Synaptics Astra hardware to enhance multimodal processing for various IoT applications. Additionally, In December, 2024, PTC, Microsoft, and Volkswagen Group have partnered to develop Codebeamer Copilot, integrating generative AI into product development. This collaboration aims to enhance software engineering efficiency, particularly in managing requirements and testing, with applications in manufacturing and software-defined vehicles.
Based on the Analysis presented in the KBV Cardinal matrix; Microsoft Corporation and Google LLC are the forerunners in the Artificial Intelligence of Things (AIoT) Market. In January, 2025, Google LLC came into partnership with Servier to leverage AI and generative AI for accelerating drug R&D, improving production, and optimizing supply chains. The collaboration aims to enhance efficiency, drive innovation, and deliver personalized therapies for patients. Companies such as Amazon Web Services, Inc., Oracle Corporation and IBM Corporation are some of the key innovators in Artificial Intelligence of Things (AIoT) Market.
Computer Vision is revolutionizing IoT by allowing devices to process and analyze visual information. Applications range from advanced surveillance systems that identify security threats to smart manufacturing lines that detect product defects in real-time. These AI advancements make IoT solutions more efficient, adaptive, and capable of handling complex scenarios, such as real-time decision-making in autonomous vehicles or dynamic traffic management in smart cities. Thus, these factors will aid in the expansion of the market.
5G provides unparalleled speed, minimal latency, and substantial bandwidth, all of which are critical for the optimal operation of AIoT systems. Unlike its predecessors, 5G supports faster data transmission rates, enabling IoT devices to process and share vast amounts of information in real-time. This innovation is especially advantageous for applications that necessitate immediate responses and exceptional reliability, such as autonomous vehicles and industrial automation. The expansion of 5G technology is not just about speed; it is about unlocking the full potential of AIoT by creating a reliable and robust network infrastructure. Therefore, as 5G continues to roll out globally, it is expected to drive innovation across industries, enabling smarter systems, enhanced automation, and better connectivity, driving the growth of the market.
Deploying AIoT systems is not a one-time expense; it involves ongoing costs such as system upgrades, maintenance, and optimization to keep pace with technological advancements. Small and medium-sized enterprises (SMEs), which often operate on limited budgets, find it particularly challenging to allocate resources for such initiatives. These businesses may struggle to justify the significant upfront investment when returns are uncertain or delayed. Hence, for SMEs, which typically operate with constrained budgets, these high implementation costs can act as a deterrent, delaying or preventing them from leveraging the transformative potential of AIoT in their operations.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships & Collaborations.
By deployment, the market is divided into bifurcated into cloud and on-premises. The cloud segment witnessed 63% revenue share in the market in 2023. Cloud-based AIoT implementations empower enterprises to process and analyze substantial volumes of data in real-time, thereby eliminating the necessity for extensive on-premises infrastructure. The extensive integration of cloud computing services across various industries, in conjunction with enhancements in data security and accelerated internet connectivity, has markedly propelled the demand for cloud-based Artificial Intelligence of Things (AIoT) solutions.
On the basis of application, the market is divided into video surveillance, inventory management, predictive maintenance, supply chain management, and others. The predictive maintenance segment recorded 13% revenue share in the market in 2023. The predictive maintenance segment is driven by the need to minimize equipment downtime and reduce operational costs in industries such as manufacturing, energy, and transportation. AIoT solutions utilize IoT sensors to gather real-time data regarding equipment performance, while artificial intelligence algorithms process this data to forecast potential failures and propose maintenance schedules.
Based on component, the market is classified into hardware, software, and services. The software segment procured 28% revenue share in the market in 2023. The software segment's growth is primarily driven by the need for AI-powered platforms that enable real-time analytics, predictive modeling, and automation in IoT ecosystems. Businesses are progressively depending on sophisticated machine learning algorithms and cloud-based software solutions to derive actionable insights from the extensive data generated by Internet of Things (IoT) devices.
Based on end use, the market is segmented into B2B, B2G, and B2C. The B2B segment procured 54% revenue share in the market in 2023. The B2B sector is propelled by the growing demand for AIoT solutions, which aim to optimize business operations, improve efficiency, and decrease costs across various industries, including manufacturing, healthcare, retail, and logistics. Companies leverage AIoT for applications such as predictive maintenance, supply chain optimization, and automation of repetitive tasks, enabling them to streamline operations and improve productivity. The growing adoption of Industry 4.0 practices and smart enterprise solutions further propels the B2B segment.
On the basis of vertical, the market is divided into retail, agriculture, logistics, BFSI, automotive, healthcare, manufacturing, and others. The agriculture and others segment procured 12% revenue share in the market in 2023. AIoT technologies enable precision farming by providing real-time data on soil health, weather conditions, and crop performance, allowing farmers to make informed decisions. Smart irrigation systems and AI-powered analytics for pest and disease management further enhance productivity and reduce resource wastage. The deployment of AIoT technologies in the agriculture sector is significantly accelerated by the increased emphasis on environmental sustainability as well as the integration of automation in this industry.
Free Valuable Insights: Global Artificial Intelligence of Things (AIoT) Market size to reach USD 18.56 Billion by 2031
The Artificial Intelligence of Things (AIoT) Market is highly competitive, driven by the convergence of AI and IoT to enable intelligent automation, real-time analytics, and predictive decision-making. Providers focus on AI-driven edge computing, advanced security, and seamless integration across diverse IoT ecosystems. Growth is fueled by increasing adoption in smart cities, industrial automation, and connected healthcare. Intense competition pushes companies to enhance scalability, interoperability, and data privacy while optimizing efficiency and unlocking new business opportunities through AI-powered IoT solutions.
Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment acquired 40% revenue share in the market in 2023. North America is a hub for innovation in AIoT solutions because of the region's early adoption of cutting-edge technologies and the presence of notable players. Significant investments in industrial automation, smart city initiatives, and advanced healthcare systems propel market growth. The region’s well-established digital infrastructure and strong government support for research and development in AIoT further bolster adoption across sectors.
| Report Attribute | Details |
|---|---|
| Market size value in 2023 | USD 14.89 Billion |
| Market size forecast in 2031 | USD 95.31 Billion |
| Base Year | 2023 |
| Historical Period | 2020 to 2022 |
| Forecast Period | 2024 to 2031 |
| Revenue Growth Rate | CAGR of 26.9% from 2024 to 2031 |
| Number of Pages | 377 |
| Tables | 383 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Market Share Analysis, Porter’s 5 Forces Analysis, Company Profiling, Companies Strategic Developments, SWOT Analysis, Winning Imperatives |
| Segments covered | Deployment, Component, End use, Application, Vertical, Region |
| Country scope |
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| Companies Included | Google LLC (Alphabet Inc.), IBM Corporation, Oracle Corporation, Salesforce, Inc., SAS Institute Inc., Microsoft Corporation, PTC Inc., SAP SE, Amazon Web Services, Inc. (Amazon.com, Inc.), GE Vernova Group |
By Deployment
By Component
By End use
By Application
By Vertical
By Geography
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