Explainable AI Trends and Forecast
The future of the global explainable AI market looks promising with opportunities in the BFSI, retail & ecommerce, IT/ITes, healthcare & life sciences, government & public sector, and media & entertainment markets. The global explainable AI market is expected to reach an estimated $24.7 billion by 2030 with a CAGR of 21.0% from 2024 to 2030. The major drivers for this market are emergence of industry 4.0 and rising adoption of deep learning and neural networks in various domains.
• Lucintel forecasts that standalone software will remain the largest segment over the forecast period.
• Within this market, BFSI is expected to witness the highest growth over the forecast period.
• North America will remain the largest region over the forecast period.
A more than 150-page report is developed to help in your business decisions.
Emerging Trends in the Explainable AI Market
Explanation AI market is developing new trends which are of a more advanced technology or a developing trend in the business.”
• Regulatory Compliance: Enhancing governing laws and regulation compliance, for instance the EU AI Act and the NIST XAI guidelines.
• Enhanced Transparency Tools: Improved systems that aid in monitoring and explaining the AI decision-making process.
• Integration with NLP: Improvement of AI techniques with the help of natural language processing, and improving the communication of the users with the AI models.
• User Overlay Concepts: Design of concepts that are simple and easy to use which does not require any expert understanding of the AI systems.
• Ethical AI Practices: Comparing to earlier works, there is a stronger shift towards adequate consideration of fairness and accountability of the deployed AI systems.
• Cross-Border Collaborations: Global collaborations to harmonize XAI practices and promote innovation on a global scale.
Explainable AI refers to a number of factors such as regulations, regulatory tools, ethics in AI uptake, and development.
Recent Developments in the Explainable AI Market
The explainable AI market in the recent years has come with advanced technologies gaining more industries concerns.
• Regulatory Guidelines: Adherence to new regulation and standard implementation like that of the EU AI Act, which requires explanation provision in AI systems.
• Technological Innovations: Development and introduction in the market of new XAI tools which will support the rendering of AI models more transparent and interpretable.
• Sector-Specific Solutions: Provision of industry specific explanations of AI center techniques, examples of such industries are finance, health care and automotive industries.
• Enhanced User Experience: Bettering of the natural language processing ability to improve comprehension of decisions made by the machine by the users.
• Educational Initiatives: More concentration on a program on how to educate people on XAI so that people may accept its use.
• Collaborative Efforts: Willingness to engage in cross-border activities in order to harmonize and improve the XAI practice across countries.
To summarize, the latest trends in the explainable AI industry demonstrate in a positive way a change in regulatory and technological issues as well as development in industry specific approaches, thus increasing transparency and users comprehension of AI solutions.
Strategic Growth Opportunities for Explainable AI Market
Explainable AI market has strategic growth direction due to technological development and specific industry demand.
• Expansion into Regulated Industries: Looking out for expansion in politically sensitive industries especially finance and healthcare where explainability is necessary.
• Development of Individual Concerns: Provision of XAI solutions that respond to specific needs such as ensuring safety in autonomous vehicles and developing effective treatments in personalized medicine.
• Integration with Emerging Technologies: Combination of XAI with other emerging technologies such as Blockchain and Edge computing for improved transparency.
• Investment in R&D: Making investments on the research and development process will enable the company to come with new ideas and trends that will remain relevant to the changing world.
• Global Market Expansion: Targeting fast growing markets that require Explainable and interpretable AI systems.
• Partnerships and Collaborations: Partnering with leading technology firms and research organizations to enhance XAI technologies.
Growing opportunities in the market for explainable AI comprise strategies aimed at the regulated market, solutions for custom software development, and R&D, which will elicit an innovative culture and widen the scope of the market.
Explainable AI Market Driver and Challenges
The explainable AI market is influenced by many drivers and factors which hamper its growth and development.
The factors responsible for driving the explainable ai market include:
1. Regulatory Requirements: Growing necessity to meet the regulations and standard requirements which require transparency as well as interpretability of the AI systems.
2. Technological Advancements: Advancement of technology especially AI and Machine Learning that add various features to XAI solutions.
3. Raised Awareness: There has been increased appreciation for the need to explain an AI model and give reasonable justifications when making decisions.
4. Sector Specific Needs: The need for more XAI approaches in highly regulated fields, like insurance, medical, and automotive.
5. User Experience: Design of interfaces and tools that help users to learn and interact with the AI system much better.
Challenges in the explainable ai market are:
1. Model Complexity: There is the issue of providing justifiable explanations for complicated systems wherein AI models and algorithms exist, especially where there we are trying to enhance transparency.
2. Regulatory Landscape: The challenge of adapting to various and changing market regulations in different countries.
3. Implementation Costs: Costs incurred in developing new systems as well as incorporating the new XAI systems.
4. Insufficient Experience: Absence of authorities specializing in the field of XAI.
5. Considerations for the User: People’s difficulties in utilizing XAI tools, especially people who do not specialize in this field.
It is possible to assert that the growth of the explainable AI market sprouts from regulatory policies, technological improvements and growing awareness of the market, even if there are difficulties in model complexity and compliance forma or in the basis of cost. To continue growing as a company and to achieve success, it’s important to understand these burdens and use the market drivers.
List of Explainable AI Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies explainable AI companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the explainable AI companies profiled in this report include-
• Microsoft
• IBM
• Google
• Salesforce
• Intel Corporation
• NVIDIA
• SAS Institute
Explainable AI by Segment
The study includes a forecast for the global explainable AI by software type, offering, method, end use, and region.
Explainable AI Market by Software Type [Analysis by Value from 2018 to 2030]:
• Standalone Software
• Integrated Software
• Automated Reporting Tools
• Interactive Model Visualization
Explainable AI Market by Offering [Analysis by Value from 2018 to 2030]:
• Solutions
• Services
Explainable AI Market by Method [Analysis by Value from 2018 to 2030]:
• Model-Agnostic Methods
• Model-Specific Methods
Explainable AI Market by End Use [Analysis by Value from 2018 to 2030]:
• BFSI
• Retail & e-commerce
• IT/ITeS
• Healthcare & Life Sciences
• Government & Public Sector
• Media & Entertainment
• Others
Explainable AI Market by Region [Analysis by Value from 2018 to 2030]:
• North America
• Europe
• Asia Pacific
• The Rest of the World
Country Wise Outlook for the Explainable AI Market
Below content depicts explainable AI market producers’ developments in USA, China, India, and Japan.
• USA: The explainable AI (XAI) market in the USA has received positive growth due to driving factors from both regulations and technology in recent years. Large technology companies and research institutions have initiated the creation of tools that will enable improved understanding of AI models. XAI guidelines set forth standards for its design and application, in order to reduce ambiguity and uncertainty in the machine learning output. In addition, the past years have also witnessed the proliferation of XAI in financial services and health care services where there is a need to be cognizant of the AI’s decision. The focus is also regarding the marketability of such interfaces and tools to the general public which do not require any AI system expertise.
• China: Investing in AI research and development, China is able to complete explainable AI development. The state of China promotes the use of XAI so that AI technologies can be implemented according to the development strategies of the country. More recent technologies that combine natural language processing and visualization techniques that justify an AI’s decision are also emerging. Advanced XAI systems are being developed in China by major technology firms with an intent of enhancing various sectors including healthcare and banking. Further inclusion of developing flexible XAI models that will easily integrate into multiple sectors is also available.
• India: In India, the explainable AI market is gaining traction as organizations understand the need for responsible use of AI. The Indian government is encouraging AI R&D with special consideration to the interpretability of AI systems. They are helping and finding ways to develop less expensive XAI solutions for the Indian startups and tech companies working in the fields of agriculture, finance, healthcare and many more. New efforts include creation of XAI as a service models that have been adapted to local market and legal requirement. Special attention is also paid to educational programs aimed at acquiring XAI skills in order to increase its use in various industries.
• Japan: Japan is experiencing growth in the explainable AI market owing to the evolution of AI technologies and the ethical concerns around their usage. Japanese firms are building explainable artificial intelligence solutions that are socially responsible in both design and implementation. New efforts include application of XAI in surgical robots and systems where there is need for transparent decision making. The government of Japan has also been supportive of AI research efforts focusing on XAI so that AI technologies can be further developed and used in the right manners. Efforts are being made to develop tools to create XAI systems that are not disruptive to current operations and provide detailed and relevant guidance.
Features of the Global Explainable AI Market
Market Size Estimates: Explainable AI market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends (2018 to 2023) and forecast (2024 to 2030) by various segments and regions.
Segmentation Analysis: Explainable AI market size by various segments, such as by software type, offering, method, end use, and region in terms of value ($B).
Regional Analysis: Explainable AI market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
Growth Opportunities: Analysis of growth opportunities in different software types, offerings, methods, end uses, and regions for the explainable AI market.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the explainable AI market.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What is the explainable AI market size?
Answer: The global explainable AI market is expected to reach an estimated $24.7 billion by 2030.
Q2. What is the growth forecast for explainable AI market?
Answer: The global explainable AI market is expected to grow with a CAGR of 21.0% from 2024 to 2030.
Q3. What are the major drivers influencing the growth of the explainable AI market?
Answer: The major drivers for this market are emergence of industry 4.0 and embracing deep learning and neural networks in various domains.
Q4. What are the major segments for explainable AI market?
Answer: The future of the explainable AI market looks promising with opportunities in the BFSI, retail & ecommerce, IT/ITes, healthcare & life sciences, government & public sector, and media & entertainment markets.
Q5. Who are the key explainable AI market companies?
Answer: Some of the key explainable AI companies are as follows:
• Microsoft
• IBM
• Google
• Salesforce
• Intel Corporation
• NVIDIA
• SAS Institute
Q6. Which explainable AI market segment will be the largest in future?
Answer: Lucintel forecasts that standalone software will remain the largest segment over the forecast period.
Q7. In explainable AI market, which region is expected to be the largest in next 5 years?
Answer: North America will remain the largest region over the forecast period.
Q.8 Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the explainable AI market by software type (standalone software, integrated software, automated reporting tools, and interactive model visualization), offering (solutions and services), method (model-agnostic methods and model-specific methods), end use (BFSI, retail & ecommerce, IT/ITes, healthcare & life sciences, government & public sector, media & entertainment, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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