Explainable AI Market Size, Share, and Trends 2024 to 2034

Explainable AI Market (By Component: Solution, Services; By Deployment: Cloud, On-premises; By Application: Fraud and Anomaly Detection, Drug Discovery & Diagnostics, Predictive Maintenance, Supply Chain Management, Identity and Access Management, Others; By End-use: Healthcare, BFSI, Aerospace & Defense, Retail and e-commerce, Public Sector & Utilities, IT & Telecommunication, Automotive) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023-2032

  • Last Updated : June 2023
  • Report Code : 3047
  • Category : ICT

Explainable AI Market Size and Growth 2023 to 2032

The global explainable AI market size accounted for USD 6.83 billion in 2022 and it is expected to hit around USD 36.42 billion by 2032, growing at a CAGR of 18.22% during the forecast period from 2023 to 2032.

Explainable AI Market Size 2023 To 2032

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Key Takeaways:

  • North America dominated the market with the largest size of 41% in 2022.
  • Asia Pacific is expected to expand at the fastest CAGR of 25% from 2023 to 2032.
  • By component, the solution segment accounted for the largest segment of 83% in 2022.
  • By component, the service segment is expected to hold a significant market share in the forecast period.
  • By deployment, the on-premise segment generated more than 56% of the revenue share in 2022.
  • The cloud segment is expected to hold accountable market share in the forecast period.
  • By application, the fraud and anomaly detection segment registered the largest market share of 24% in 2022.
  • By application, the drug discovery and diagnostics segment is expected to grow significantly.
  • By end-use, the IT & Telecommunication segment contributed to the largest market size of 19% in 2022.
  • By end-use, the retail and e-commerce segment is expected to dominate the market with the largest market share in the forecast period.

Explainable AI Market Overview:

Explainable artificial intelligence is the technology in artificial intelligence that is developed to provide human interpretation explanations for the decision-making process. Explainable AI is used in several industries such as healthcare, automobile, internet and telecommunication, and others. The modern era is almost dependent on emerging technologies and technological innovations. Artificial intelligence is one of the most promising technologies emerging in recent times for organizational growth. The explainable AI is also known as interpretability. Interpretability allows industries/end-users to understand the model of learning and the explanation behind the judgments in light of the real-world issues that are attempting to address. Explainable AI enhances the operations like trustworthiness, transparency, fairness, and accountability of Artificial Intelligent systems.

Growth Factors:

Explainable AI is used for the organization's development and market growth of it. The continuous technological development in regions like North America and Asia-Pacific has resulted in a major expansion in the growth of the market. The explainable Ai is used for the detection of cybercrime. The accessibility and accuracy of solutions and services offered by explainable AI have highlighted its importance in multiple sectors.

Explainable AI is used for the detection of the problem and increases confidence and elimination of biases in the organization.  Explainable AI detects the mistakes and flaws of the system and gives solutions with newer insights. The growth of the explainable AI market is driven by the rising requirements to improve inventory management for better recalling clients by proving the significant retention strategy by providing building trust, improving customer satisfaction, and providing transparency.

Explainable AI Market Scope

Report Coverage Details
Market Size in 2023 USD 8.07 Billion
Market Size by 2032 USD 36.42 Billion
Growth Rate from 2023 to 2032 CAGR of 18.22%
Largest Market North America
Fastest Growing Market Asia Pacific
Base Year 2022
Forecast Period 2023 to 2032
Segments Covered By Component, By Deployment, By Application, and By End-use
Regions Covered North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa


Explainable AI Market Dynamics

Drivers:

Rising collaborative activities between human and artificial intelligence

Collaboration between humans and AI is essential to meet regulatory and compliance requirements. Explainable AI enables organizations to provide justifications and evidence for the decisions made by AI systems, ensuring transparency and compliance with regulations. Human collaboration in the interpretation and explanation of AI decisions helps meet legal obligations and regulatory standards. Collaboration between humans and AI facilitates continuous learning and adaptation. Human experts can share their knowledge and expertise with AI systems, enabling them to learn from human feedback and adapt to evolving circumstances. This collaborative learning process improves the AI system's performance over time. Overall, the collaboration between humans and AI drives the growth of the explainable AI market by leveraging the strengths of both parties.

Restraints:

Performance limitations

In highly competitive industries, organizations may prioritize the performance of AI models over interpretability. If black-box models consistently outperform explainable AI models, businesses may be hesitant to adopt explainable AI solutions due to concerns about losing a competitive edge. There is often a trade-off between model interpretability and performance. As models become more interpretable, they may simplify or omit certain complex relationships in the data, leading to a potential decrease in performance. Addressing these performance limitations requires ongoing research and development efforts in the field of explainable AI.

Opportunities:

Rising education and awareness about AI

Education and awareness about AI create opportunities for the explainable AI market by fostering understanding, addressing concerns, promoting regulatory compliance, bridging the gap between technical and non-technical stakeholders, empowering users, and encouraging research and innovation in the field of explainable AI. Education and awareness initiatives can inspire researchers, developers, and innovators to explore and advance the field of explainable AI. By highlighting the importance and potential applications of explainability, these initiatives can attract talent, investment, and resources toward developing novel techniques and solutions. This creates a positive feedback loop, where increased research and innovation drive further growth in the explainable AI market.

Component Insights:

The solution segment dominated the market in 2022, the segment is expected to continue to witness a noticeable growth during the forecast period. The growth of the segment is attributed to the increasing adoption of AI technologies in multiple industries. Fraud detection is the major part where the explainable AI works. Explainable AI detects fraud and creates insightful solutions to it. In the technological era, cybercrime is one of the major challenges for the government as well as private organizations.

Explainable AI Market Share, By Component , 2022 (%)

The service segment is expected to grow at a significant rate during the forecast period. The growth of the segment is attributed due to the increase in the services regarding the AI platform. The AI consulting services work to help the organization adopt AI solutions that are interpretable, transparent, and accountable.

Deployment Insights:

The on-premises segment holds the largest share of the market with the largest market share. To build explainable AI on-premises, businesses employ a variety of methods, including rule-based systems, decision trees, and model-based explanations.  Due to its security advantages, major businesses choose XAI installed on-premises across a variety of industry verticals, particularly in the BFSI, retail, and government sectors. The system employs machine learning to evaluate massive amounts of data, spot possibly fraudulent activity, and offer concise and honest justifications for its judgments.

Application Insights:

The fraud and anomaly detection segment dominated the market in 2022. The segment is expected to maintain growth during the forecast period. Fraud and anomaly detection often require a combination of machine-learning algorithms and human expertise. Explainable AI models facilitate collaboration between human analysts and AI systems. By providing interpretable outputs, these models enable analysts to identify patterns, generate insights, and contribute their domain knowledge to enhance the overall detection capabilities.

End-Use Insights:

The IT and telecommunications segment dominated the market in 2022, the segment will continue to grow at a significant rate during the forecast period. The It and telecommunications sectors generate massive amounts of data from multiple sources, the data is valuable for training AI models. Explainable AI solutions enable these sectors to leverage their data effectively and derive actionable insights. The requirements for consumer interactions and network logs from the IT and telecommunications sectors support the growth of the segment.

On the other hand, the retail and e-commerce segment will grow at a robust pace during the forecast period. Along with a globally expanded consumer base, e-commerce businesses are susceptible to fraud. The risk in online transaction fraud and inventory management has raised the requirements for explainable AI solutions and services by retail and e-commerce businesses.

Regional Insights:

North America dominated the global explainable AI market in 2022, the region is predicted to maintain its dominance during the forecast period. The rapid adoption of technology along with the presence of massive information technology (IT) infrastructure supported the growth of the market in North America. The nations such as the United States and Canada are observed to be the largest contributors to the market. The willingness to adapt advanced technologies for operational solutions and services by multiple industries/end-users promotes the growth of the explainable AI market in the region.

Explainable AI Market Share, By Region, 2022 (%)

On the other hand, Asia Pacific is expected to be the most attractive region for the explainable AI market during the forecast period. Favorable economies, emerging technological hubs, adoption of generative services, and the presence of key players to promote technological advancements are a few factors that are expected to accelerate the market’s growth in the Asia Pacific.

Multiple technology-based startups and companies in the region are actively involved in the development of explainable AI solutions, the market in Asia Pacific is witnessing fierce competition which is observed to lead the introduction of advanced AI-based services.

Recent Development:

  • In June 2023, Reprocell announced the launch of advanced commercial services ‘Pharmacology-AI’. The launch of new services was followed by the completion of the first excellerate project by the National Center for Digital Innovation.
  • In June 2023, IBM announced the launch of a new platform for organizations ‘IBM Watsonx’. The new platform released by IBM allows companies to accelerate operations with artificial intelligence solutions.
  • In May 2023, the Singapore government collaborated with Google Cloud, to make the availability of artificial intelligence to the public sector agencies in the city-state through the new AI cloud platform.
  • In May 2023, the government of Singapore announced the collaboration with Google Cloud. The collaboration aims to assure the availability of artificial intelligence platforms for public sector agencies through AI cloud platforms.

Explainable AI Market Companies

  • Amelia US LLC
  • BuildGroup
  • DataRobot, Inc.
  • Ditto.ai
  • DarwinAI
  • Factmata
  • Google LLC
  • IBM Corporation
  • Kyndi
  • Microsoft Corporation

Segments Covered in the Report:

By Component

  • Solution
  • Services

By Deployment

  • Cloud
  • On-premises

By Application

  • Fraud and Anomaly Detection
  • Drug Discovery & Diagnostics
  • Predictive Maintenance
  • Supply Chain Management
  • Identity and Access Management
  • Others

By End-use

  • Healthcare
  • BFSI
  • Aerospace & Defense
  • Retail and e-commerce
  • Public Sector & Utilities
  • IT & Telecommunication
  • Automotive
  • Others

By Geography

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

Frequently Asked Questions

The global explainable AI market size is expected to increase USD 36.42 billion by 2032 from USD 6.83 billion in 2022.

The global explainable AI market will register growth rate of 18.22% between 2023 and 2032.

The major players operating in the explainable AI market are Amelia US LLC, BuildGroup, DataRobot, Inc., Ditto.ai, DarwinAI, Factmata, Google LLC, IBM Corporation, Kyndi, Microsoft Corporation, and Others.

The driving factors of the explainable AI market are the rising collaborative activities between human and artificial intelligence and emerging utilization by the healthcare sector.

North America region will lead the global explainable AI market during the forecast period 2023 to 2032.

Chapter 1. Introduction

1.1. Research Objective

1.2. Scope of the Study

1.3. Definition

Chapter 2. Research Methodology (Premium Insights)

2.1. Research Approach

2.2. Data Sources

2.3. Assumptions & Limitations

Chapter 3. Executive Summary

3.1. Market Snapshot

Chapter 4. Market Variables and Scope 

4.1. Introduction

4.2. Market Classification and Scope

4.3. Industry Value Chain Analysis

4.3.1. Raw Material Procurement Analysis 

4.3.2. Sales and Distribution Channel Analysis

4.3.3. Downstream Buyer Analysis

Chapter 5. COVID 19 Impact on Explainable AI Market 

5.1. COVID-19 Landscape: Explainable AI Industry Impact

5.2. COVID 19 - Impact Assessment for the Industry

5.3. COVID 19 Impact: Global Major Government Policy

5.4. Market Trends and Opportunities in the COVID-19 Landscape

Chapter 6. Market Dynamics Analysis and Trends

6.1. Market Dynamics

6.1.1. Market Drivers

6.1.2. Market Restraints

6.1.3. Market Opportunities

6.2. Porter’s Five Forces Analysis

6.2.1. Bargaining power of suppliers

6.2.2. Bargaining power of buyers

6.2.3. Threat of substitute

6.2.4. Threat of new entrants

6.2.5. Degree of competition

Chapter 7. Competitive Landscape

7.1.1. Company Market Share/Positioning Analysis

7.1.2. Key Strategies Adopted by Players

7.1.3. Vendor Landscape

7.1.3.1. List of Suppliers

7.1.3.2. List of Buyers

Chapter 8. Global Explainable AI Market, By Component

8.1. Explainable AI Market, by Component, 2023-2032

8.1.1. Solution

8.1.1.1. Market Revenue and Forecast (2020-2032)

8.1.2. Services

8.1.2.1. Market Revenue and Forecast (2020-2032)

Chapter 9. Global Explainable AI Market, By Deployment

9.1. Explainable AI Market, by Deployment, 2023-2032

9.1.1. Cloud

9.1.1.1. Market Revenue and Forecast (2020-2032)

9.1.2. On-premises

9.1.2.1. Market Revenue and Forecast (2020-2032)

Chapter 10. Global Explainable AI Market, By Application 

10.1. Explainable AI Market, by Application, 2023-2032

10.1.1. Fraud and Anomaly Detection

10.1.1.1. Market Revenue and Forecast (2020-2032)

10.1.2. Drug Discovery & Diagnostics

10.1.2.1. Market Revenue and Forecast (2020-2032)

10.1.3. Predictive Maintenance

10.1.3.1. Market Revenue and Forecast (2020-2032)

10.1.4. Supply Chain Management

10.1.4.1. Market Revenue and Forecast (2020-2032)

10.1.5. Identity and Access Management

10.1.5.1. Market Revenue and Forecast (2020-2032)

10.1.6. Others

10.1.6.1. Market Revenue and Forecast (2020-2032)

Chapter 11. Global Explainable AI Market, By End-use 

11.1. Explainable AI Market, by End-use, 2023-2032

11.1.1. Healthcare

11.1.1.1. Market Revenue and Forecast (2020-2032)

11.1.2. BFSI

11.1.2.1. Market Revenue and Forecast (2020-2032)

11.1.3. Aerospace & Defense

11.1.3.1. Market Revenue and Forecast (2020-2032)

11.1.4. Retail and e-commerce

11.1.4.1. Market Revenue and Forecast (2020-2032)

11.1.5. Public Sector & Utilities

11.1.5.1. Market Revenue and Forecast (2020-2032)

11.1.6. IT & Telecommunication

11.1.6.1. Market Revenue and Forecast (2020-2032)

11.1.7. Automotive

11.1.7.1. Market Revenue and Forecast (2020-2032)

11.1.8. Others

11.1.8.1. Market Revenue and Forecast (2020-2032)

Chapter 12. Global Explainable AI Market, Regional Estimates and Trend Forecast

12.1. North America

12.1.1. Market Revenue and Forecast, by Component (2020-2032)

12.1.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.1.3. Market Revenue and Forecast, by Application (2020-2032)

12.1.4. Market Revenue and Forecast, by End-use (2020-2032)

12.1.5. U.S.

12.1.5.1. Market Revenue and Forecast, by Component (2020-2032)

12.1.5.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.1.5.3. Market Revenue and Forecast, by Application (2020-2032)

12.1.5.4. Market Revenue and Forecast, by End-use (2020-2032)

12.1.6. Rest of North America

12.1.6.1. Market Revenue and Forecast, by Component (2020-2032)

12.1.6.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.1.6.3. Market Revenue and Forecast, by Application (2020-2032)

12.1.6.4. Market Revenue and Forecast, by End-use (2020-2032)

12.2. Europe

12.2.1. Market Revenue and Forecast, by Component (2020-2032)

12.2.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.2.3. Market Revenue and Forecast, by Application (2020-2032)

12.2.4. Market Revenue and Forecast, by End-use (2020-2032)

12.2.5. UK

12.2.5.1. Market Revenue and Forecast, by Component (2020-2032)

12.2.5.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.2.5.3. Market Revenue and Forecast, by Application (2020-2032)

12.2.5.4. Market Revenue and Forecast, by End-use (2020-2032)

12.2.6. Germany

12.2.6.1. Market Revenue and Forecast, by Component (2020-2032)

12.2.6.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.2.6.3. Market Revenue and Forecast, by Application (2020-2032)

12.2.6.4. Market Revenue and Forecast, by End-use (2020-2032)

12.2.7. France

12.2.7.1. Market Revenue and Forecast, by Component (2020-2032)

12.2.7.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.2.7.3. Market Revenue and Forecast, by Application (2020-2032)

12.2.7.4. Market Revenue and Forecast, by End-use (2020-2032)

12.2.8. Rest of Europe

12.2.8.1. Market Revenue and Forecast, by Component (2020-2032)

12.2.8.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.2.8.3. Market Revenue and Forecast, by Application (2020-2032)

12.2.8.4. Market Revenue and Forecast, by End-use (2020-2032)

12.3. APAC

12.3.1. Market Revenue and Forecast, by Component (2020-2032)

12.3.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.3.3. Market Revenue and Forecast, by Application (2020-2032)

12.3.4. Market Revenue and Forecast, by End-use (2020-2032)

12.3.5. India

12.3.5.1. Market Revenue and Forecast, by Component (2020-2032)

12.3.5.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.3.5.3. Market Revenue and Forecast, by Application (2020-2032)

12.3.5.4. Market Revenue and Forecast, by End-use (2020-2032)

12.3.6. China

12.3.6.1. Market Revenue and Forecast, by Component (2020-2032)

12.3.6.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.3.6.3. Market Revenue and Forecast, by Application (2020-2032)

12.3.6.4. Market Revenue and Forecast, by End-use (2020-2032)

12.3.7. Japan

12.3.7.1. Market Revenue and Forecast, by Component (2020-2032)

12.3.7.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.3.7.3. Market Revenue and Forecast, by Application (2020-2032)

12.3.7.4. Market Revenue and Forecast, by End-use (2020-2032)

12.3.8. Rest of APAC

12.3.8.1. Market Revenue and Forecast, by Component (2020-2032)

12.3.8.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.3.8.3. Market Revenue and Forecast, by Application (2020-2032)

12.3.8.4. Market Revenue and Forecast, by End-use (2020-2032)

12.4. MEA

12.4.1. Market Revenue and Forecast, by Component (2020-2032)

12.4.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.4.3. Market Revenue and Forecast, by Application (2020-2032)

12.4.4. Market Revenue and Forecast, by End-use (2020-2032)

12.4.5. GCC

12.4.5.1. Market Revenue and Forecast, by Component (2020-2032)

12.4.5.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.4.5.3. Market Revenue and Forecast, by Application (2020-2032)

12.4.5.4. Market Revenue and Forecast, by End-use (2020-2032)

12.4.6. North Africa

12.4.6.1. Market Revenue and Forecast, by Component (2020-2032)

12.4.6.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.4.6.3. Market Revenue and Forecast, by Application (2020-2032)

12.4.6.4. Market Revenue and Forecast, by End-use (2020-2032)

12.4.7. South Africa

12.4.7.1. Market Revenue and Forecast, by Component (2020-2032)

12.4.7.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.4.7.3. Market Revenue and Forecast, by Application (2020-2032)

12.4.7.4. Market Revenue and Forecast, by End-use (2020-2032)

12.4.8. Rest of MEA

12.4.8.1. Market Revenue and Forecast, by Component (2020-2032)

12.4.8.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.4.8.3. Market Revenue and Forecast, by Application (2020-2032)

12.4.8.4. Market Revenue and Forecast, by End-use (2020-2032)

12.5. Latin America

12.5.1. Market Revenue and Forecast, by Component (2020-2032)

12.5.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.5.3. Market Revenue and Forecast, by Application (2020-2032)

12.5.4. Market Revenue and Forecast, by End-use (2020-2032)

12.5.5. Brazil

12.5.5.1. Market Revenue and Forecast, by Component (2020-2032)

12.5.5.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.5.5.3. Market Revenue and Forecast, by Application (2020-2032)

12.5.5.4. Market Revenue and Forecast, by End-use (2020-2032)

12.5.6. Rest of LATAM

12.5.6.1. Market Revenue and Forecast, by Component (2020-2032)

12.5.6.2. Market Revenue and Forecast, by Deployment (2020-2032)

12.5.6.3. Market Revenue and Forecast, by Application (2020-2032)

12.5.6.4. Market Revenue and Forecast, by End-use (2020-2032)

Chapter 13. Company Profiles

13.1. Amelia US LLC

13.1.1. Company Overview

13.1.2. Product Offerings

13.1.3. Financial Performance

13.1.4. Recent Initiatives

13.2. BuildGroup

13.2.1. Company Overview

13.2.2. Product Offerings

13.2.3. Financial Performance

13.2.4. Recent Initiatives

13.3. DataRobot, Inc.

13.3.1. Company Overview

13.3.2. Product Offerings

13.3.3. Financial Performance

13.3.4. Recent Initiatives

13.4. Ditto.ai

13.4.1. Company Overview

13.4.2. Product Offerings

13.4.3. Financial Performance

13.4.4. Recent Initiatives

13.5. DarwinAI

13.5.1. Company Overview

13.5.2. Product Offerings

13.5.3. Financial Performance

13.5.4. Recent Initiatives

13.6. Factmata

13.6.1. Company Overview

13.6.2. Product Offerings

13.6.3. Financial Performance

13.6.4. Recent Initiatives

13.7. Google LLC

13.7.1. Company Overview

13.7.2. Product Offerings

13.7.3. Financial Performance

13.7.4. Recent Initiatives

13.8. IBM Corporation

13.8.1. Company Overview

13.8.2. Product Offerings

13.8.3. Financial Performance

13.8.4. Recent Initiatives

13.9. Kyndi

13.9.1. Company Overview

13.9.2. Product Offerings

13.9.3. Financial Performance

13.9.4. Recent Initiatives

13.10. Microsoft Corporation

13.10.1. Company Overview

13.10.2. Product Offerings

13.10.3. Financial Performance

13.10.4. Recent Initiatives

Chapter 14. Research Methodology

14.1. Primary Research

14.2. Secondary Research

14.3. Assumptions

Chapter 15. Appendix

15.1. About Us

15.2. Glossary of Terms

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