Embedded AI Market Size, Share, Growth & Industry Analysis, By Component (Hardware, Software, Service), By Technology (Machine Learning, Natural Language Processing, Computer Vision, Speech Recognition, Others), By Data Type (Sensor Data, Image and Video Data, Numeric Data, Categorical Data, Others), By Application, and Regional Analysis, 2024-2031

Embedded AI Market Size 

Global Embedded AI Market size was recorded at USD 9.92 billion in 2023, which is estimated to be valued at USD 10.61 billion in 2024 and is projected to reach USD 19.91 billion by 2031, growing at a CAGR of 9.41% from 2024 to 2031. The need for low-latency, real-time decision-making in applications like autonomous vehicles, drones, and robotics is significantly driving market growth.

Embedded AI allows on-device data processing, enabling faster response times for mission-critical operations. In the scope of work, the report includes solutions offered by companies such as NVIDIA Corporation, Intel Corporation, Qualcomm Technologies, Inc., Advanced Micro Devices, Inc., Texas Instruments Incorporated, NXP Semiconductors N.V., MediaTek Inc., Renesas Electronics Corporation, STMicroelectronics N.V., Samsung Electronics Co., Ltd., and others.

Moreover, exponential growth in the Internet of Things (IoT) devices across various industries is fueling the demand for embedded AI solutions. These devices require on-device intelligence to process vast amounts of data in real-time for decision-making, automation, and data analysis. Embedded AI allows IoT systems to operate efficiently without constantly relying on cloud connectivity.

• According to a March 2024 report by 5G Americas, global IoT subscriptions reached 3.1 billion, while smartphone subscriptions totaled 6.6 billion in the same year. It is estimated that by 2026, IoT subscriptions are projected to reach 4.5 billion, with smartphone subscriptions expected to reach 7.4 billion.

Additionally, as privacy regulations like GDPR strengthen, companies are seeking secure AI solutions to process data locally. Embedded AI helps mitigate privacy risks by analyzing data on-device and meeting the increasing need for secure data processing, contributing to the embedded AI market growth.

Embedded AI refers to the integration of artificial intelligence (AI) directly into hardware devices or systems, which allows them to perform AI-driven tasks such as data processing, decision-making, and automation locally without relying on cloud computing.

This technology enables real-time, on-device processing, making it suitable for applications where low latency, energy efficiency, and security are critical, such as in Internet of Things (IoT) devices, autonomous systems, and industrial automation. By embedding AI into chips, sensors, or controllers, these systems can operate independently, analyze data, and make intelligent decisions at the edge, improving efficiency and performance.

Analyst’s Review

Governments worldwide are making substantial investments in AI research and development, with a particular emphasis on critical sectors such as defense, healthcare, and smart cities. Embedded AI is crucial in government-led initiatives, for facilitating real-time, on-device decision-making essential for increasing the efficiency of advanced systems.

In June 2023, the World Economic Forum launched the AI Governance Alliance, dedicated to advancing responsible practices in the design, development, and deployment of AI systems. Supported by the World Economic Forum's Centre for the Fourth Industrial Revolution, this initiative engages with global regions to come up with a unified approach for managing the transformative impacts of AI. The alliance aims to provide crucial guidance and frameworks for the ethical use of AI, influencing how these technologies are integrated and governed worldwide.

Significant initiatives provided by governments are accelerating the development of innovative AI technologies and driving the widespread adoption of embedded AI across diverse sectors. This financial backing is enabling the creation of AI-powered solutions that address complex public sector challenges, thereby expanding the market opportunities for companies specializing in embedded AI.

The trend of increased government investment and strategic support is proving instrumental in advancing the capabilities and applications of embedded AI, thereby significantly contributing to the global growth of the market.

Embedded AI Market Growth Factors

The expanding adoption of autonomous systems, such as self-driving cars, drones, and industrial robots is fueling the embedded AI market growth. These systems rely on AI to process real-time data from sensors, cameras, and other inputs for navigation, object detection, and decision-making. This capability is especially important in electronics, logistics, agriculture, and defense industries, where autonomous systems are becoming central to operations and are driving innovation in AI technologies.

• TheInternational Federation of Robotics reveals that industrial robot installations in the U.S. increased by 12% in 2023, reaching a total of 44,303 units. Automotive industry accounted for 33% of all industrial robot installations in the U.S. in 2023.

Moreover, the healthcare industry is increasingly adopting embedded AI in medical devices, wearables, and diagnostic tools to provide real-time monitoring, early detection, and personalized care. Devices like smartwatches, glucose monitors, and telemedicine platforms leverage embedded AI to analyze patient data on-device, offering insights without relying on cloud-based processing.

This capability is especially critical for remote healthcare, where real-time data processing can impact patient outcomes. The rising demand for AI-driven health monitoring solutions is a leading factor propelling the growth of market.

• In October 2023, Siemens Healthineers and the Global Fund partnered at the World Health Summit to fight AIDS, tuberculosis, and malaria. This collaboration aims to advance the use of artificial intelligence (AI) in X-ray screening for tuberculosis (TB), an infectious disease that is preventable, treatable, and curable.

However, the processing of sensitive data on embedded devices raises significant concerns about data security and privacy. These concerns lead to stringent regulatory challenges and potential reluctance from organizations to adopt embedded AI solutions, which is hindering embedded AI market growth.

To address these challenges and sustain market growth, companies are adopting advanced encryption techniques to protect data integrity and employing robust security protocols to safeguard against potential data breaches. Additionally, several organizations are implementing stringent regulatory standards and conducting regular security audits to ensure compliance, which is expected to continue fueling the market growth over the forecast period 2024 to 2031.

Embedded AI Industry Trends

The rise of Industry 4.0 and the increasing implementation of smart manufacturing technologies are boosting the expansion the embedded AI market trend. AI is becoming essential for optimizing production processes, performing predictive maintenance, and enabling real-time monitoring of machinery. Embedded AI allows industrial systems to analyze data on-site, improving operational efficiency and reducing downtime.

Moreover, the expansion of 5G networks is enhancing the capabilities of edge devices, enabling faster data transfer and more reliable connectivity. Embedded AI combined with 5G allows devices to perform complex processing tasks in real-time, making them more responsive and efficient.

• According to a March 2024 report by 5G Americas, global 5G connections experienced substantial growth in 2023, reaching 1.76 billion. This represents a 66% year-over-year increase, driven by the addition of 700 million new connections.

This advancement is particularly important in autonomous vehicles, smart cities, and industrial automation, where fast and reliable communication is essential. The synergy between embedded AI and 5G is driving innovation across industries, enabling new use cases and accelerating the adoption of AI-driven solutions at the edge.

Segmentation Analysis

The global market has been segmented based on component, technology, technology, application, and geography.

By Component

Based on component, the market has been segmented into hardware, software, and service. The hardware segment led the embedded AI market in 2023, reaching the valuation of USD 4.96 billion.

The increasing integration of AI capabilities into various devices necessitates advanced AI-specific hardware, such as specialized processors and chips, which are essential for efficient on-device processing. These hardware components, including AI accelerators, GPUs, and TPUs, enable high-performance, real-time data processing and decision-making in resource-constrained environments.

With applications such as IoT devices, autonomous systems, and smart appliances being more prevalent, the demand for robust, high-performance embedded AI hardware continues to rise.

By Technology

Based on technology, the market has been classified into machine learning, natural language processing, computer vision, speech recognition, and others. The machine learning segment secured the largest revenue share of 39.38% in 2023. Machine learning algorithms enable embedded systems to learn from data patterns and make predictions or decisions without explicit programming for each scenario.

This capability is crucial for applications requiring adaptive and autonomous functionalities, such as in autonomous vehicles, smart home devices, and industrial automation. Additionally, machine learning models can be optimized for performance on resource-constrained hardware, making them well-suited for embedded environments.

By Data Type

Based on data type, the market has been divided into sensor data, image and video data, numeric data, categorical data, and others. The image and video data segment is poised for significant growth at a robust CAGR of 10.89% over the forecast period.

Embedded AI systems, equipped with image and video processing, enable real-time analysis and decision-making, which is crucial for facial recognition, autonomous driving, and medical imaging applications. Additionally, advancements in AI algorithms and hardware are enhancing the efficiency and accuracy of these systems. As the need for sophisticated visual data processing continues to rise, the image and video data segment is poised for significant expansion.

Embedded AI Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

The North America embedded AI market share stood at around 35.99% in 2023 in the global market, with a valuation of USD 3.57 billion. The high adoption of AI in the defense sector, particularly in the U.S., is a significantly bolstering the growth of market.

The U.S. Department of Defense (DoD) has prioritized the integration of AI-powered systems to enhance mission-critical operations, including autonomous drones, surveillance systems, and real-time threat detection. Initiatives like the Pentagon's Replicator program, which aims to deploy large-scale autonomous systems, are accelerating the demand for embedded AI solutions, driving significant growth in the region.

• According to an August 2024 report by the Center for Strategic & International Studies, generative artificial intelligence (AI) has emerged as a priority for the U.S. Department of Defense (DOD). The Pentagon has allocated new funding to acquire AI-powered systems, including its Replicator drone program and the Joint All-Domain Command and Control (JADC2) battle network.

Moreover, the development of advanced AI-specific hardware, such as AI chips and GPUs, is accelerating the deployment of embedded AI solutions across North America. These innovations are enhancing the performance and efficiency of AI systems, driving widespread adoption in telecommunications, healthcare, and finance segments.

Asia Pacific is poised for significant growth at a robust CAGR of 10.92% over the forecast period. Asia-Pacific is home to some of the world’s largest consumer electronics manufacturers, such as Samsung, Xiaomi, and Sony. Embedded AI is increasingly being integrated into smartphones, wearables, and home appliances for enhancing user experience with voice recognition, health monitoring, and smart automation, thus driving market growth in the region.

Additionally, the region’s robust industrial manufacturing sector, particularly in China, Japan, and South Korea, is a significantly impacting the embedded AI market growth. Industry 4.0 adoption is transforming manufacturing processes, with embedded AI playing a central role in predictive maintenance, automation, and quality control, driving its adoption in smart manufacturing technologies.

• In February 2024, a study by IBM revealed that approximately 59% of enterprise-scale organizations in India are actively utilizing AI in their operations. The 'IBM Global AI Adoption Index 2023' highlighted that early adopters are at the forefront, with 74% of these enterprises having ramped up their AI investments over the past 24 months, focusing on areas such as research and development and workforce reskilling.

Competitive Landscape

The global embedded AI market report provides valuable insights with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers and acquisitions, product innovations, and joint ventures, to expand their product portfolio and increase their market shares across different regions.

Strategic initiatives, including investments in R&D activities, establishment of new manufacturing facilities, and supply chain optimization, could create new opportunities for the market growth.

List of Key Companies in Embedded AI Market

• NVIDIA Corporation
• Intel Corporation
• Qualcomm Technologies, Inc.
• Advanced Micro Devices, Inc.
• Texas Instruments Incorporated
• NXP Semiconductors N.V.
• MediaTek Inc.
• Renesas Electronics Corporation
• STMicroelectronics N.V.
• Samsung Electronics Co., Ltd.

Key Industry Developments

• September 2024 (Business Expansion): Qualcomm Technologies, Inc. announced the expansion of its Snapdragon X Series portfolio by introducing the Snapdragon X Plus 8-core platform. This new AI chip delivers multi-day battery life for laptops and PCs with its AI-powered Copilot+ experiences for intelligent and transformative user interactions.
• June 2024 (Technological Advancement): Nvidia announced its next-generation AI chip platform named Rubin, which is expected to launch in 2026. The Rubin platform will feature new graphics processing units (GPUs), a central processing unit (CPU) called "Versa," and advanced networking chips. The Versa CPU is specifically designed for complex AI computations, making it suitable for applications ranging from data centers to edge computing.

The global embedded AI market has been segmented:

By Component

• Hardware
• Software
• Service

By Technology

• Machine Learning
• Natural Language Processing
• Computer Vision
• Speech Recognition
• Others

By Technology

• Sensor Data
• Image and Video Data
• Numeric Data
• Categorical Data
• Others

By Application

• Autonomous Vehicles
• Smartphones and Wearables
• Robotics
• Smart Home Devices
• Industrial Automation
• Security and Surveillance
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • UK
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America