AI As A Service (AIaaS) Market Is Growing

AI as A Service (AIaaS) Market is Growing

by Evelyn Addison — 2 years ago in Artificial Intelligence 4 min. read

Artificial intelligence as a Service (AIaaS), refers to pre-trained computer learning algorithms, natural language processing (NLP), and robotic process automation (RPA) in the cloud to automate business operations. It is very similar to software-as-a-service (SaaS). AIaaS is a service that allows businesses to access AI models, without the need for advanced AI programming skills.

This blog lists the expected growth figures for the AI business, including the deployment model, end-user application, verticals, and geography. Businesses will be able:

  • Based on facts and figures, create strategies for specific regions and countries.
  • Identify the best time and place to invest.
  • Overperform key competitors by using data and the trends and drivers shaping the market.
  • Based on the most recent market research findings, understand your customers.
  • Strategically positioning yourself in the tech run can help you grow your business.

Companies will not be able to build their own AI solutions for these small services. They are often associated with high upfront costs and difficult management.

This is why businesses often look for AIaaS (Artificial Intelligent-as-a-Service).

Today we will be discussing AI as a Service (AIaaS). What is the market’s growth rate and CAGR? What are the business models of the market’s major players? Why is this market growing? We will also answer other similar questions.

What is AIaaS?

AIaaS stands for Artificial Intelligence-as-a-Service. This refers to off-the-shelf Artificial Intelligence tools that allow companies to scale production and implement AI techniques within their model at a fraction of the cost of in-house AI.

We can gather the details from our discussions and AI is considered a large sector that includes multiple technologies such as NLP (Natural Language Processing), robots, machine learning, and computer vision.

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Growth in AI As a Service:

The global AI-as a Service market was valued at USD 1.35 Bn in 2016 and is expected to grow at a CAGR of 46.9% by 2028. The study’s base year is 2017. The forecast period is between 2018-and 2028.

The forecasted compound annual growth rate (CAGR), for the various categories of the AI market, is:

  • AI Services – 22%
  • AI Hardware- 20.5%
  • Artificial Intelligence platforms – 34.6%
  • Software for AI System Infrastructure – 14.1%
  • AI Lifecycle Software – 38.9%
  • AI Business Services – 21.9%
  • Based on the deployment model, the market was split into two distinct segments: cloud-based and on-premises deployment models.

The US is the dominant revenue source in the global AI service market and will continue to be so in the future. The US is a majorly developed economy which makes it an attractive market for AI service providers.

Businesses are seeking to incorporate AI applications into their business model. These include chatboxes, text analysis software, and many other services. These applications will simplify tasks that they don’t have the expertise in, allowing them to focus their efforts on more important goals.

Market Statistics:

AIaaS, a third-party provider of AI services, is a third-party provider that can outsource AI services to companies exploring various artificial intelligence sectors. This allows them to avoid high-risk investments and lower returns. Google, Microsoft, IBM, and Google are just a few of the market leaders who have included AI services in their business models. This has allowed them to increase their revenue and reach without having to invest a lot of time. High investments in technological advancement and artificial intelligence have resulted in a rise in demand for advanced analytical systems on the market, which has contributed to the growth in AIaaS Market Statistics.

The market for AIaaS has seen a rise in awareness about cloud-based solutions as well as the need for affordable artificial intelligence specialists. Let’s look at the market growth in AIaaS based on competitive analysis and segmentation.

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  • Segmentation:

The market for Artificial Intelligence as a service is segmented according to organization size, technology, regions, and industry verticals. Further, the technology segment can be divided into machine learning, NLP, computer vision, and other areas. Machine Learning dominated the market in 2017 with a larger market share and increased revenue. It is expected that this market share will continue to grow over the next few years.

Based on the size of the Business the AIaaS Market can be divided into two segments, small and medium enterprises, and large enterprises. In 2017, large enterprises had already secured their market share for AI, which has increased pressure on other companies and increased demand for AI in other industries.

The market’s growth can be identified from the Industry Vertical aspect. It is split into the following: retail, telecom, healthcare IT, public sector, manufacturing, and energy sectors, as well as the utility sector. The AIaaS market has been dominated by the IT and telecom sectors. They have integrated chatbots into their business models for greater customer satisfaction and increased revenue.

The region of North America is the largest contributor to the AIaaS market. Asia-Pacific, Europe, and LAMEA are the dominant players. This is expected to continue in the future, due to the growth of IT infrastructure and large enterprises.

  • Analysis of Competition:

Through acquisitions, product launches, and collaborations, some of the biggest AIaaS market leaders like Apple Inc. and Intel Inc. have adopted AI services into their models. These big players also focus on creating new AI platforms and services to help them meet their higher goals.

Amazon Web Service, for example, has launched Amazon Transcribe according to its model. This automatic speech recognition service offers speech-to-text conversion and helps distinguish between leading speakers.

New and small businesses don’t have the resources to create their own AI platforms using the market growth model. AIaaS provides a way for small and medium-sized enterprises to have more technical support and AI, which allows them to compete with large players in the AI sector without having to invest huge amounts.


AIaaS is a service that makes AI technology available to all businesses. It is also affordable, quick, and easy to use with minimal effort.

Many companies don’t choose to develop their AI software in-house. AIaaS can increase your company’s ability to scale, while also paying for the necessary tools and giving you the option to upgrade to higher plans as needed.

To tackle all your non-expertise tasks, find the right AIaaS Partner to help your business. There is no additional cost and you will reap the benefits. Algoscale, an Artificial Intelligence Solutions Provider, implements innovative and effective artificial intelligence solutions that assist businesses in becoming smarter and more flexible.

Our AI solutions combine business, development, as well as operations data to provide actionable insights that give our clients a holistic view of changing business environments. This allows them to benefit from the automation, resulting in improved business results over time.

We hope that you find this information useful. Algoscale strives to provide wisdom on a broad range of subjects. Keep reading to learn new things.

Evelyn Addison

Evelyn is an assistant editor for The Next Tech and Just finished her master’s in modern East Asian Studies and plans to continue with her old hobby that is computer science.

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