Explainable AI Market
Explainable AI Market Size, Share & Trends Analysis Report by Component (Solutions, and Services), by Methods (Model-Agnostic Methods, and Model-Specific Methods), by Deployment Mode (Cloud, and On-Premises), and by End-User (Healthcare, BFSI, Aerospace & Defense, Retail and E-commerce, Public Sector & Utilities, IT & Telecommunication, Automotive, and Others) Forecast Period (2024-2031)
Explainable AI market is anticipated to grow at a CAGR of 20.9% during the forecast period (2024-2031). The Explainable AI (XAI) market is experiencing substantial growth driven by the regulatory requirements for transparency in AI decision-making, the widespread adoption of AI in different industries, technological advancements, and increasing public awareness. Ethical AI guidelines emphasize fairness, accountability, and transparency, which necessitate the use of explainable AI techniques. Technological advancements like SHAP and LIME are driving the development of more interpretable models, while the integration of XAI solutions with existing systems facilitates easier adoption and implementation for organizations.
Market Dynamics
Increasing Adoption of AI Across Industries
The high AI adoption in telecommunications and network optimization driving XAI adoption owing to sector-specific demand for transparent, interpretable solutions. In February 2024, Ericsson launched Explainable AI in Cognitive Software to accelerate AI adoption in network optimization. The new capabilities enable a shorter time to value from AI-based solutions, improving efficiency in RAN optimization. The solutions rely on AI models trained on diverse global data sets and can be retrained locally for fast deployment.
The process of utilizing advanced AI technologies, such as generative AI and large language models, significantly enhances classification accuracy across various languages. To take leverage of these technologies, in September 2023, Temenos launched a secure Generative AI solution in banking, enabling banks to automatically classify customers' transactions. This solution provides personalized insights, enhances customer loyalty, and improves digital banking experiences. The solution uses Generative AI and large language models to understand various modalities, allowing banks to classify and label transactions with high accuracy in different languages.
Market Segmentation
- Based on components, the market is segmented into solutions, and services.
- Based on deployment mode, the market is segmented into clouds, and on-premises.
- Based on methods, the market is segmented into model-agnostic methods and model-specific methods.
- Based on end-user, the market is segmented into healthcare, BFSI, aerospace & defense, retail and e-commerce, public sector & utilities, IT & telecommunication, automotive, and others (government and defense, and telecommunications).
Cloud-based is Projected to Emerge as the Largest Segment
The high adoption of cloud-based XAI solutions due to their high scalability and cost-effectiveness is a key contributor to the high share of this market segment. Therefore, key players are focusing on offering cloud-based solutions to gain a high share of the global market. For instance, in April 2024, Neo4j partnered with Google Cloud to introduce new GraphRAG capabilities for GenAI applications, enabling developers to create knowledge graphs from unstructured data, analyze real-time data in seconds, and build GenAI applications powered by knowledge graphs on Google Cloud.
Retail and E-commerce Sub-segment to Hold a Considerable Market Share
In the retail & E-commerce sector, XAI is essential for ensuring transparent AI-driven decisions, promoting regulatory compliance, and creating consumer trust. In January 2023, Google Cloud introduced new AI tools for retailers, including a shelf-checking solution using Vertex AI Vision and machine learning capabilities for its Recommendations AI solution, which optimizes product ordering and recommendations on e-commerce pages based on product visual features. Such developments are further aiding the growth of this market segment.
Regional Outlook
The global explainable AI market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).
Rapid Digitalization of Healthcare Records In Asia-Pacific Region
The rapid digitization of healthcare records is demanding the use of AI technologies to increase transparency has driven the adoption of XAI across the region. According to the National Center for Biotechnology Information, in March 2023, the Indian government successfully implemented the Unified Payments Interface (UPI) to enhance its digital public infrastructure. With 1.2 billion wireless connections, 600 million smartphone users, and 800 million internet connections, digitization has reached remote areas. Aadhaar's 90.0% penetration and integration with JAM and UPI have minimized government subsidy leakages, demonstrating India's proficiency in digital technology.
Explainable AI Market Growth by Region 2024-2031
North America Holds Major Market Share
The high R&D for AI, high adoption of AI across several regional industries, and favorable government policies are key factors driving the regional XAI market. Increased federal investment serves as a driving force for innovation, enhancing higher exploration and advancements in AI R&D across the region. In January 2024, the National Security Commission proposed a federal spending target of $32.0 billion for non-defense AI R&D by Fiscal Year 2026, which is comparable to the current federal investment in biomedical research. To achieve this objective, federal funding for non-defense AI R&D should be increased to $8.0 billion and continue to double annually for the next three fiscal years. This increased funding would encourage innovation and scientific advancements by involving various stakeholders in the field and supporting the testing and evaluation of cutting-edge models.
Market Players Outlook
*Note: Major Players Sorted in No Particular Order.
The major companies serving the explainable AI market include Accenture PLC, IBM Corp., Google LLC, Microsoft Corp., and SAS Institute Inc. among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers and acquisitions to stay competitive in the market. For instance, in March 2024, Apple acquired DarwinAI, an AI visual quality assurance startup that offers a patented Explainable AI platform for improving product quality and increasing production efficiency.
The Report Covers
- Market value data analysis of 2023 and forecast to 2031.
- Annualized market revenues ($ million) for each market segment.
- Country-wise analysis of major geographical regions.
- Key companies operating in the global explainable AI market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
- Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
- Analysis of market-entry and market expansion strategies.
- Competitive strategies by identifying ‘who-stands-where’ in the market.
1. Report Summary
• Current Industry Analysis and Growth Potential Outlook
1.1. Research Methods and Tools
1.2. Market Breakdown
1.2.1. By Segments
1.2.2. By Region
2. Market Overview and Insights
2.1. Scope of the Report
2.2. Analyst Insight & Current Market Trends
2.2.1. Key Findings
2.2.2. Recommendations
2.2.3. Conclusion
3. Competitive Landscape
3.1. Key Company Analysis
3.2. Accenture PLC
3.2.1. Overview
3.2.2. Financial Analysis
3.2.3. SWOT Analysis
3.2.4. Recent Developments
3.3. IBM Corp.
3.3.1. Overview
3.3.2. Financial Analysis
3.3.3. SWOT Analysis
3.3.4. Recent Developments
3.4. Google LLC
3.4.1. Overview
3.4.2. Financial Analysis
3.4.3. SWOT Analysis
3.4.4. Recent Developments
3.5. Key Strategy Analysis
4. Market Segmentation
4.1. Global Explainable AI Market by Component
4.1.1. Solutions
4.1.2. Services
4.2. Global Explainable AI Market by Methods
4.2.1. Model-Agnostic Methods
4.2.2. Model-Specific Methods
4.3. Global Explainable AI Market by Deployment Mode
4.3.1. Cloud
4.3.2. On-Premises
4.4. Global Explainable AI Market by End-User
4.4.1. Healthcare
4.4.2. BFSI
4.4.3. Aerospace & Defense
4.4.4. Retail and E-commerce
4.4.5. Public Sector & Utilities
4.4.6. IT & Telecommunication
4.4.7. Automotive
4.4.8. Others (Government and Defense, and Telecommunications)
5. Regional Analysis
5.1. North America
5.1.1. United States
5.1.2. Canada
5.2. Europe
5.2.1. UK
5.2.2. Germany
5.2.3. Italy
5.2.4. Spain
5.2.5. France
5.2.6. Rest of Europe
5.3. Asia-Pacific
5.3.1. China
5.3.2. India
5.3.3. Japan
5.3.4. South Korea
5.3.5. Rest of Asia-Pacific
5.4. Rest of the World
5.4.1. Latin America
5.4.2. Middle East and Africa
6. Company Profiles
6.1. Amelia US LLC
6.2. Arm Ltd.
6.3. BuildGroup
6.4. Cloud Software Group, Inc.
6.5. DataRobot, Inc.
6.6. FICO
6.7. Fiddler Labs, Inc.
6.8. H2O.ai, Inc.
6.9. HEAVY.AI Inc.
6.10. Interpretable AI LLC
6.11. Kinetica Db Ltd.
6.12. Kyndi
6.13. Microsoft Corp.
6.14. Rio ESG Ltd.
6.15. Seldon Technologies Ltd.
6.16. ZestFinance Inc.
1. Global Explainable AI Market Research And Analysis By Component, 2023-2031 ($ Million)
2. Global Explainable AI Solution Market Research And Analysis By Region, 2023-2031 ($ Million)
3. Global Explainable AI Services Market Research And Analysis By Region, 2023-2031 ($ Million)
4. Global Explainable AI Market Research And Analysis By Methods, 2023-2031 ($ Million)
5. Global Model-Agnostic Based Explainable AI Market Research And Analysis By Region, 2023-2031 ($ Million)
6. Global Model-Specific Based Explainable AI Market Research And Analysis By Region, 2023-2031 ($ Million)
7. Global Explainable AI Market Research And Analysis By Deployment Mode, 2023-2031 ($ Million)
8. Global Cloud-Based Explainable AI Market Research And Analysis By Region, 2023-2031 ($ Million)
9. Global On-Premises Based Explainable AI Market Research And Analysis By Region, 2023-2031 ($ Million)
10. Global Explainable AI Market Research And Analysis By End-User, 2023-2031 ($ Million)
11. Global Enterprise AI In Healthcare Market Research And Analysis By Region, 2023-2031 ($ Million)
12. Global Explainable AI In BFSI Market Research And Analysis By Region, 2023-2031 ($ Million)
13. Global Explainable AI In Aerospace & Defense Market Research And Analysis By Region, 2023-2031 ($ Million)
14. Global Explainable AI In Retail And E-Commerce Market Research And Analysis By Region, 2023-2031 ($ Million)
15. Global Explainable AI In Public Sector & Utilities Market Research And Analysis By Region, 2023-2031 ($ Million)
16. Global Explainable AI In IT & Telecommunication Market Research And Analysis By Region, 2023-2031 ($ Million)
17. Global Explainable AI In Automotive Market Research And Analysis By Region, 2023-2031 ($ Million)
18. Global Explainable AI In Other End-User Market Research And Analysis By Region, 2023-2031 ($ Million)
19. Global Explainable AI Market Research And Analysis By Region, 2023-2031 ($ Million)
20. North American Explainable AI Market Research And Analysis By Country, 2023-2031 ($ Million)
21. North American Explainable AI Market Research And Analysis By Component, 2023-2031 ($ Million)
22. North American Explainable AI Market Research And Analysis By Method, 2023-2031 ($ Million)
23. North American Explainable AI Market Research And Analysis By Deployment Mode, 2023-2031 ($ Million)
24. North American Explainable AI Market Research And Analysis By End-User, 2023-2031 ($ Million)
25. European Explainable AI Market Research And Analysis By Country, 2023-2031 ($ Million)
26. European Explainable AI Market Research And Analysis By Component, 2023-2031 ($ Million)
27. European Explainable AI Market Research And Analysis By Method, 2023-2031 ($ Million)
28. European Explainable AI Market Research And Analysis By Deployment, 2023-2031 ($ Million)
29. European Explainable AI Market Research And Analysis By End-User, 2023-2031 ($ Million)
30. Asia-Pacific Explainable AI Market Research And Analysis By Country, 2023-2031 ($ Million)
31. Asia-Pacific Explainable AI Market Research And Analysis By Component, 2023-2031 ($ Million)
32. Asia-Pacific Explainable AI Market Research And Analysis By Method, 2023-2031 ($ Million)
33. Asia-Pacific Explainable AI Market Research And Analysis By Deployment Mode, 2023-2031 ($ Million)
34. Asia-Pacific Explainable AI Market Research And Analysis By End-User, 2023-2031 ($ Million)
35. Rest Of The World Explainable AI Market Research And Analysis By Region, 2023-2031 ($ Million)
36. Rest Of The World Explainable AI Market Research And Analysis By Component, 2023-2031 ($ Million)
37. Rest Of The World Explainable AI Market Research And Analysis By Method,2023-2031 ($ Million)
38. Rest Of The World Explainable AI Market Research And Analysis By Deployment,2023-2031 ($ Million)
39. Rest Of The World Explainable AI Market Research And Analysis By End-User, 2023-2031 ($ Million)
1. Global Explainable AI Market Share By Component, 2023 Vs 2031 (%)
2. Global Explainable AI Solution Market Share By Region, 2023 Vs 2031 (%)
3. Global Explainable AI Services Market Share By Region, 2023 Vs 2031 (%)
4. Global Explainable AI Market Share By Method, 2023 Vs 2031 (%)
5. Global Model-Agnostic-Based Explainable AI Market Share By Region, 2023 Vs 2031 (%)
6. Global Model-Specific-Based Explainable AI Market Share By Region, 2023 Vs 2031 (%)
7. Global Explainable AI Market Share By Deployment Mode, 2023 Vs 2031 (%)
8. Global Cloud-Based Explainable AI Market Share By Region, 2023 Vs 2031 (%)
9. Global On-Premises Based Explainable AI Market Share By Region, 2023 Vs 2031 (%)
10. Global Explainable AI Market Share By End-User, 2023 Vs 2031 (%)
11. Global Explainable AI In Healthcare Market Share By Region, 2023 Vs 2031 (%)
12. Global Explainable AI In BFSI Market Share By Region, 2023 Vs 2031 (%)
13. Global Explainable AI In Aerospace & Defense Market Share By Region, 2023 Vs 2031 (%)
14. Global Explainable AI In Retail And E-Commerce Market Share By Region, 2023 Vs 2031 (%)
15. Global Explainable AI In Public Sector & Utilities Market Share By Region, 2023 Vs 2031 (%)
16. Global Explainable AI In It & Telecommunication Market Share By Region, 2023 Vs 2031 (%)
17. Global Explainable AI In Automotive Market Share By Region, 2023 Vs 2031 (%)
18. Global Explainable AI In Others End-User Market Share By Region, 2023 Vs 2031 (%)
19. Global Explainable AI Market Share By Region, 2023 Vs 2031 (%)
20. US Explainable AI Market Size, 2023-2031 ($ Million)
21. Canada Explainable AI Market Size, 2023-2031 ($ Million)
22. UK Explainable AI Market Size, 2023-2031 ($ Million)
23. France Explainable AI Market Size, 2023-2031 ($ Million)
24. Germany Explainable AI Market Size, 2023-2031 ($ Million)
25. Italy Explainable AI Market Size, 2023-2031 ($ Million)
26. Spain Explainable AI Market Size, 2023-2031 ($ Million)
27. Rest Of Europe Explainable AI Market Size, 2023-2031 ($ Million)
28. India Explainable AI Market Size, 2023-2031 ($ Million)
29. China Explainable AI Market Size, 2023-2031 ($ Million)
30. Japan Explainable AI Market Size, 2023-2031 ($ Million)
31. South Korea Explainable AI Market Size, 2023-2031 ($ Million)
32. Rest Of Asia-Pacific Explainable AI Market Size, 2023-2031 ($ Million)
33. Latin America Explainable AI Market Size, 2023-2031 ($ Million)
34. Middle East And Africa Explainable AI Market Size, 2023-2031 ($ Million)
