AI in IoT Market Size, Share and Trends 2025 to 2034

Revenue, 2024

USD 87.51 Bn

Forecast Year, 2034

USD 161.93 Bn

CAGR, 2025 - 2034

6.35%

Report Coverage

Global

What is AI in IoT Market Size?

The global AI in IoT market size is estimated at USD 93.12 billion in 2025 and is predicted to increase from USD 99.09 billion in 2026 to approximately USD 161.93 billion by 2034, expanding at a CAGR of 6.35% from 2025 to 2034. Factors such as growth in digitalization and an increase in the adoption of advanced technologies positively impacted the growth of the AI in IoT market.

Market Highlights

• North America dominated the global AI in IoT market with largest revenue share of 33% in 2024.
• Asia Pacific is anticipated to witness the fastest growth over the studied period.
• By component, the software segment dominated the global market in 2024.
• By component, the platform segment is expected to grow at a significant rate in the market during the projected period.
• By end-user, in 2023, the manufacturing segment led the market in 2024.
• By end-user, the banking, financial services, & insurance segment is expected to grow at a significant rate during the forecast period.

Market Overview

AI has emerged as a powerful technology capable of replicating human intellectual functions. Similarly, IoT refers to a network of interconnected devices with unique IDs that communicate data across a network without human interaction. The integration of AI in IoT systems has enabled businesses to develop sophisticated machines that mimic human behavior and assist in decision-making with minimal human intervention.

The AI in IoT market is growing rapidly due to the increasing fusion of AI technologies with IoT systems. This combination allows smart devices and networks to collect, analyze, and act on vast amounts of data in real-time, improving automation, efficiency, and decision-making capabilities.

AI in IoT Market Growth Factors

• The applications of the AI in IoT markets are increasing in various industries, such as healthcare and agriculture.
• Growing technological advancements are expected to further fuel the growth of the AI in IoT market.
• The AI in IoT market can provide improved convenience and a better user experience for consumers, which can have a positive impact on the market.
• Rising utilization of AI to improve data management and analytics can propel market growth shortly.

AI in IoT Market Outlook:

• Industry Growth Overview: Between 2025 and 2030, this market is expected to grow significantly due to numerous government initiatives aimed at developing the AI infrastructure coupled with technological advancements in the banking sector.
• Major Investors: Several AI providers and strategic investors are actively entering this industry, drawn by collaborations, R&D and joint ventures. Numerous market players brands such as IBM Corporation, SAS Institute Inc., Oracle Corporation and some others have started investing rapidly for developing advanced AI solutions for the end-user industries.
• Startup Ecosystem: Various startup brands are engaged in designing AI-enabled platforms for the industrial sector. The crucial startup brands dealing in AI technology consists of Uniphore, Entropik Tech, Transmetrics and some others.

Market Scope

Market Dynamics

Drivers

Rising big data volume

The expansion of mobile traffic, cloud computing, and the adoption of the AI in IoT market has significantly increased the volume and complexity of data and fueled the growth of big data. Big data analytics provide valuable insights and actionable information from large datasets. Organizations can utilize predictive analytics for risk assessment, operations, marketing, and fraud detection. Therefore, data and analytics are becoming indispensable components for enterprises.

• In March 2024, The IoT Community, the world's first-to-market, one of the largest, and longest-standing independent IoT Communities comprising 49,000+ IoT practitioner members, announces the launch of GenAIoT, a new industry solution category that intersects Generative Artificial Intelligence (Gen AI), with the Artificial Internet of Things (IoT) to operationalize Industrial and Enterprise Internet of Things (IoT).

Restraint

Cybersecurity issues

The proliferation of the AI in IoT market products and services expands the network's surface area, increasing the number of potential attack vectors. An IoT could exploit a single connected, unprotected device to launch an active attack on a network. Such attacks on critical infrastructure in industrial settings could result in significant losses and can hinder market growth. Furthermore, the shortage of skilled professionals in AI infrastructure and concerns regarding data privacy and security are anticipated to impede market expansion.

Opportunity

Advancements in edge computing

A significant opportunity in the AI in IoT market is the advancement of edge computing technologies. Edge computing processes data closer to its source, such as IoT devices, minimizing latency, reducing transmission costs, and decreasing reliance on centralized cloud services. By embedding AI capabilities directly into edge devices, real-time data processing and decision-making become faster and more reliable, which enables more autonomous IoT operations.

• In April 2024, A British computer processor and software design company, Arm, accelerates Edge AI with Ethos-U NPU and IoT reference design is said to deliver a 4x performance uplift for high-performance edge AI applications such as factory automation and smart cameras through a new IoT reference design platform to accelerate the deployment of voice and vision systems.

Segment Insights

Components Insights

The software segment dominated the global AI in IoT market in 2024. The segment is further divided into sub-segments: remote monitoring, security, data management, network bandwidth management, real-time streaming analytics, and edge solutions. Among these, data management holds a significant market share. IoT data management is commonly used to predict wear and tear on connected assets and infrastructure. Moreover, Continuous innovation in this software segment ensures its crucial role within the AI in the IoT ecosystem, promising sustained growth and expansion in the coming years.

The platform segment is expected to grow at a significant rate in the AI in IoT market during the projected period. This can be attributed to the technological advancements that enabled AI in IoT platforms, transforming industries worldwide, including BFSI, manufacturing, and healthcare. These platforms facilitate developers in connecting, managing, and integrating data from IoT devices into various applications and services. They also aim to reduce development time and costs for IoT solutions by providing standard components for enterprises to build upon. These factors have contributed to the growth of platforms in AI in IoT market.

• In April 2024, American semiconductor giant Qualcomm launches Wi-Fi solutions, AI-based IoT, and industrial platforms. Qualcomm recently acquired Foundries.io, an IoT software platform, to enhance open-source capabilities and accelerate product commercialization.

End-user Insights

The manufacturing segment led the AI in IoT market in 2024. The manufacturing sector has increasingly utilized AI-powered IoT solutions to boost operational efficiency, enhance product quality, and minimize downtime. Companies are integrating AI with IoT to develop ‘smart factories' where machinery and equipment communicate, predict failures, and self-optimize operations using real-time data. This integration has streamlined production processes by significantly reducing operational costs and contributed to the segment's major market share.

The banking, financial services, & insurance segment is expected to grow at a significant rate in the AI in IoT market during the forecast period. In the banking, financial services, & insurance (BFSI) sector, IoT-enabled connected banking solutions help banks better serve their customers by utilizing data from various smart devices. This information allows customers to make informed financial decisions. Additionally, banks can offer value-added services, financial assistance, and personalized products using readily available customer data.

• In November 2023, Payment's technology solutions provider Financial Software &Systems Pvt Ltd (FSS) launched the Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML)-enabled ATMs in India. ATM operators have long been struggling with thin margins while facing multiple challenges in managing an ATM site. This innovative technology can resolve this.

Regional Insights

U.S. AI in IoT Market Size and Growth 2025 to 2034

The U.S. AI in IoT market size is exhibited at USD 21.51 billion in 2025 and is projected to be worth around USD 38.46 billion by 2034, poised to grow at a CAGR of 6.65% from 2025 to 2034.

North America dominated the global AI in IoT market in 2024. The growing investment in advanced technologies, including cloud-based services, AI, machine learning, business analytics solutions, and IoT, aims to enhance business operations and customer experience by driving the growth of the market.

The United States is poised to dominate the AI in IoT market in North America due to substantial investments, AI innovations, and advanced data collection technologies. Increased government spending on IoT and AI, along with the growing presence of AI in IoT vendors, is expected to propel market growth during the forecast period. Furthermore, the demand for 5G-enabled IoT connections is projected to increase.

• In June 2024, Tata Consultancy Services (TCS), a global leader in IT services, consulting, and business solutions, launched the Bringing Life to ThingsTM Lab in Cincinnati, Ohio. (US). The lab is designed to support the rapid prototyping, experimentation, and large-scale implementation of AI, GenAI, and IoT engineering solutions, enabling TCS to assist clients in bringing innovative solutions to life faster and more efficiently.

Asia Pacific is anticipated to witness the fastest growth in the AI in IoT market over the studied period. The increased penetration of digitalization and higher adoption of advanced technology are anticipated to offer significant growth opportunities for the market in this region. Furthermore, as a major contributor to the global economy, China's economic landscape is evolving rapidly due to rising labor costs and the unsustainable traditional migrant worker model. These factors have driven the economy to integrate automation into its industrial processes.

Key Players in AI in IoT Market and Their Offerings

• Google LLC: Google LLC is a multinational technology company, a subsidiary of Alphabet Inc., headquartered in Mountain View, CA. It specializes in information technology, including search, online advertising, cloud computing, software, hardware, and artificial intelligence
• SAP SE: SAP SE is a global leader in enterprise application software and business AI, widely known as the standard-setter for Enterprise Resource Planning (ERP) software. This company helps organizations to manage complex business processes by centralizing data management and providing real-time insights across various business functions.
• PTC Inc.: PTC Inc. is a global software company that provides solutions for industrial and manufacturing companies to digitally transform their products and services. This is known for its computer-aided design (CAD) and product lifecycle management (PLM) software, with products such as Creo and Windchill.
• Salesforce, Inc.: Salesforce, Inc. is an American cloud-based software company that provides a customer relationship management (CRM) platform to help businesses connect with customers. This company pioneered cloud computing and offers a suite of applications for sales, service, marketing, and e-commerce, all integrated with its AI-powered Customer 360 platform.
• Hitachi Ltd.: Hitachi, Ltd. is a Japanese multinational conglomerate headquartered in Tokyo, Japan, with a diverse portfolio in areas such as digital systems, energy, mobility, industry, and healthcare. This company was founded in 1910 by Namihei Odaira and it initially focused on electrical machinery before expanding into a wide range of sectors.
• Softweb Solutions Inc.: Softweb Solutions is an Avnet company that provides AI, data, and digital transformation services to help businesses modernize their operations. This firm offers a wide range of solutions including AI and data analytics, IoT development, custom software, and cloud services.

Segments Covered in the Report

By Component

• Platform
• Services
• Software

By End-user

• Banking, Financial Services, & Insurance
• IT And Telecommunication
• Energy & Utilities
• Healthcare Sector
• Manufacturing Industry

By Region

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa