AI in Procurement Market Size, Share and Trends 2026 to 2035

Revenue, 2025

USD 3.32 Bn

Forecast Year, 2035

USD 39.20 Bn

CAGR, 2026 - 2035

28.00%

Report Coverage

Global

What is the AI in Procurement Market Size in 2026?

The global AI in procurement market size was calculated at USD 3.32 billion in 2025 and is predicted to increase from USD 4.25 billion in 2026 to approximately USD 39.20 billion by 2035, expanding at a CAGR of 28.00% from 2026 to 2035.The market is driven by the growing need for automation, data-driven decision-making, cost optimization, and better supplier risk management in global supply chains.

Key Takeaways

• North America led the AI in procurement market with the largest share of approximately 45% in the global market in 2025.
• Asia Pacific is expected to grow at the highest CAGR during the forecast period.
• By component type, the software segment led the market and held approximately 70% share in 2025.
• By component type, the services segment is expected to grow at the highest CAGR of 24.5% during the forecast period.
• By deployment type, the cloud-based segment dominated the market with approximately 72% share in 2025.
• By deployment type, the on-premise segment is expected to grow at the highest CAGR between 2026 and 2035.
• By technology type, the machine learning segment led the market and captured approximately 43% share in 2025.
• By technology type, the natural language processing (NLP) segment is expected to expand at the highest CAGR from 2026 to 2035.
• By application type, the supplier management and identification segment led the AI in procurement market with approximately 25% share in 2025.
• By application type, the risk management and predictive analytics segment is expected to expand at the highest CAGR from 2026 to 2035.

What is the AI in Procurement Market?

The market refers to AI-enabled software and services that automate, analyze, and optimize procurement functions across enterprises. This includes spend analysis, supplier management, contract lifecycle management, risk forecasting, and sourcing automation using technologies such as machine learning, NLP, predictive analytics, and generative AI. These solutions improve efficiency, reduce costs, enhance supplier collaboration, and enable strategic decision-making. Adoption spans cloud and on-premise deployment across industries, including retail, manufacturing, healthcare, BFSI, and IT.

AI procurement platforms are being developed using sophisticated algorithmic architectures that integrate supervised and unsupervised machine learning, deep learning, and optimization algorithms. Supervised learning algorithms, such as gradient boosting and random forest, are employed for supplier risk assessment and spend categorization. Unsupervised learning algorithms such as clustering are utilized for supplier segmentation and anomaly detection.

Technology Shifts in the AI in Procurement Market

The market is transforming from simple automation to more intelligent and adaptive systems The earlier tools were primarily focused on rule-based systems, but now machine learning models are used for analyzing patterns and making decisions. There is a significant shift towards generative AI and NLP, which assists in contract analysis, document processing, and conversational procurement solutions. Predictive and prescriptive analytics are being rapidly adopted as they assist companies in forecasting demand, pricing, and supplier risks. Cloud-based platforms are becoming the norm, and there is seamless data exchange between systems.

What are the AI in Procurement Market Trends?

• Collaborations and Partnerships: Companies are collaborating to integrate AI capabilities into procurement systems, which helps in better spend analysis, risk assessment of suppliers, and AI-driven decision-making. For instance, Coupa partnered with AI technology companies to improve its procurement solutions, which allow for automated spend analysis, predictive analytics, and supplier suggestions.
• Government Initiatives: Governments utilize AI technologies to make public procurement more transparent, efficient, and compliant. AI facilitates contract verification, fraud detection, and harmonization of the tendering process. For instance, the Albanian government launched Diella, an AI system that helps with contract drafting and verification for public procurement.
• Business Expansions: AI-based procurement startups are expanding their businesses with investments and new product offerings. Their procurement solutions automate supplier management, RFP creation, and risk management to benefit enterprise procurement teams. For instance, Omnea secured $50 million to expand its AI-based procurement solution, which facilitates automated supplier assessment and performance analysis.

Market Scope

Segmental Insights

Component Type Insights

Why Did the Software Segment Dominate the AI in Procurement Market?

The software segment dominated the market with approximately 70% share in 2025. The market growth of this segment is because it provides end-to-end solutions for expenditure management, sourcing, and supplier and contract management. AI facilitates demand forecasting, risk analysis, and automated data analysis to make procurement faster and more efficient. This segment is widely adopted by organizations because of its informed decision-making and advanced AI capabilities.

The services segment is expected to grow at the highest CAGR from 2026 to 2035. The market growth of this segment is due to the increasing requirement for specialized advice on how to properly utilize AI. This segment facilitates consultation, integration, training, and support. The market growth of this segment is further driven by the rising need to adapt platforms according to business requirements and the increasing adoption of AI in enterprises.

Deployment Type Insights

Why Did the Cloud-Based Segment Dominate the AI in Procurement Market?

The cloud-based segment led the market with approximately 72% share in 2025. The market growth of this segment is because it provides flexibility, scalability, and cost-effectiveness to organizations. This segment facilitates companies to access AI solutions and data remotely, enables rapid updates, and provides seamless integration with other enterprise systems. Cloud-based solutions eliminate the need for complex IT infrastructure and maintenance. This segment facilitates organizations to quickly implement AI and gain insights without requiring lengthy implementation projects.

The on-premise segment is expected to grow at the highest CAGR during the forecast period. The market growth of this segment can be attributed to the growing needs of organizations for more control over data, security, and compliance. This segment facilitates companies to deploy AI systems on their own IT infrastructure, thereby decreasing dependence on third-party servers. On-premise solutions are being widely adopted by organizations that deal with sensitive procurement data.

Technology Type Insights

Why Did the Machine Learning Segment Dominate the AI in Procurement Market?

The machine learning segment dominated the market with approximately 43% share in 2025. The market growth of this segment can be attributed to its data-driven decision-making and automation. Machine learning algorithms can process a large amount of procurement data, detect patterns, and make accurate predictions. This segment facilitates spend analysis, demand forecasting, supplier risk analysis, and anomaly detection. Machine learning models are simpler to integrate with existing procurement infrastructure and provide tangible business value.

The natural language processing (NLP) segment is expected to expand at the highest CAGR during the forecast period. The market growth of this segment is because NLP technology assists in extracting key information and analyzing contract terms and documents. This segment facilitates the development of chatbots and virtual assistants for procurement. As organizations are increasingly focusing on the digitization of documents and optimizing efficiency, the use of NLP technology is increasing at a rapid pace.

Application Type Insights

Why Did the Supplier Management and Identification Segment Dominate the AI in Procurement Market?

The supplier management and identification segment dominated the market with approximately 25% share in 2025. The market growth of this segment is because it is necessary for companies to identify trustworthy suppliers, assess their performance and manage them properly. AI assists in analyzing supplier information, measuring risk, monitoring performance, and ensuring compliance. AI technologies facilitate rapid supplier discovery, real-time monitoring, and data-driven decision making.

The risk management and predictive analytics segment is expected to expand at the highest CAGR during the forecast period. The market growth of this segment is because AI assists in analyzing historical and current data to predict supply chain disruptions, price variations and supplier bankruptcies. Predictive analytics assist in making informed decisions, planning and the adoption of risk-oriented AI solutions is rising at a rapid pace. The market growth of this segment is further driven by rising supply chain uncertainties, geopolitical risks, and cost volatilities.

Regional Insights

North America AI in Procurement Market Size and Growth 2026 to 2035

The North America AI in procurement market size is estimated at USD 1.49 billion in 2025 and is projected to reach approximately USD 17.84 billion by 2035, with a 28.18% CAGR from 2026 to 2035.

What Made North America the Leading Region in the AI in Procurement Market? 

North America dominated the AI in procurement market with 45% share in 2025. The market growth in this region can be attributed to early adoption of cutting-edge technology and robust digital infrastructure. Companies in this region have actively adopted AI-based solutions to enhance efficiency and minimize costs. North America has significant investment in AI, a strong focus on automation, and widespread adoption of cloud-based solutions. Moreover, companies in this region are actively leveraging data analytics and AI to make strategic procurement decisions.

U.S. AI in Procurement Market Size and Growth 2026 to 2035

The U.S. AI in procurement market size is calculated at USD 1.12 billion in 2025 and is expected to reach nearly USD 13.47 billion in 2035, accelerating at a strong CAGR of 28.24% between 2026 and 2035

U.S. AI in Procurement Market Analysis

The U.S. leads the market in North America because of the presence of top technology companies, robust digital infrastructure, and widespread adoption of AI technology. Organizations in the U.S are actively adopting AI procurement solutions to increase efficiency, lower costs, and make informed decisions. This country has a well-developed cloud infrastructure, talent pool, and innovation in AI technology. The market growth in this country is further driven by significant investments by large businesses and the government in digital transformation, which is fueling the adoption of AI procurement solutions.

What Made Asia Pacific the Fastest Growing Region in the AI in Procurement Market?

Asia-Pacific is expected to grow at the highest CAGR from 2026 to 2035. The market growth in this region is due to the rapid digitalization of emerging economies in this region. The adoption of AI and cloud-based solutions is increasing in this region as a means of transforming the procurement process. The adoption of AI in procurement is fueled by the growing industrial base, increasing enterprise investments in automation, and the adoption of digital procurement solutions.

China AI in Procurement Market Trends

China is at the forefront of the AI in procurement market in the Asia Pacific region due to its robust manufacturing sector, large number of suppliers, and the adoption of AI and digital technologies. Companies in China are widely adopting AI to optimize procurement, increase supply chain transparency, and lower operational costs. The size and complexity of the supply chain in China are driving the demand for AI procurement solutions. This country has a significant presence of prominent technology companies, which drives AI innovation. The government has invested in AI development and digital infrastructure.

AI in Procurement Market Companies

• SAP SE
• IBM Corporation
• Microsoft Corporation
• Oracle Corporation
• Coupa Software Inc.
• GEP Worldwide
• Basware Corporation
• Ivalua Inc.
• Jaggaer
• Zycus Inc.
• Tradeshift
• Proactis Holdings Ltd.
• Informatica
• SynerTrade
• Scanmarket

Segments Covered in This Report

By Component Type

• Software
• Services

By Deployment Type

• Cloud-Based
• On-Premise

By Technology Type

• Machine Learning (ML)
• Natural Language Processing (NLP)
• Computer Vision & Others

By Application Type

• Supplier Management/Identification
• Risk Management / Predictive Analytics
• Spend Analysis, Contract Management, Category Management

By Region

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