AI Governance Market

AI Governance Market Outlook (2024 to 2034)

The global AI governance market is valued at US$ 298.5 million in 2024 and is forecasted to expand at a CAGR of 26.9% to reach US$ 3.22 billion by 2034.

To make sure that an organization's use of AI technology is in line with its goals, values, strategies, and legal requirements, AI governance solutions provide an extensive framework of rules, procedures, protocols, and cutting-edge technologies. It also guarantees the accomplishment of corporate objectives and adherence to moral standards. The increasing number of government initiatives to use AI technology, the growing need to build trust in AI systems, the growing demand for transparency in AI-related decision-making, and the expanding regulatory compliance requirements surrounding AI are contributing to the adoption of these solutions.

Increasing industry-specific needs, legal and regulatory constraints, the rise of AI governance consulting firms, and the growing need for explainable AI are creating prospects for market players. Further, it is crucial to have an understanding of the possible hazards and difficulties associated with AI. As AI is used more widely across industries, people are becoming more conscious of the potential risks and challenges it poses, including algorithmic prejudice, privacy issues, and safety concerns. More businesses and governments are investing an increasing amount of money in AI governance to guarantee the proper and moral development and application of AI.

As AI systems emerge across several industries, the demand for AI governance solutions to manage the ethical, legal, and societal repercussions of these systems is growing. Consequently, there is an increased availability of platforms and tools for AI governance, such as frameworks for AI ethics, tools for bias identification and reduction, and explainable AI (XAI) solutions. Several establishments are including AI governance in their frameworks for managing business risk to tackle the possible hazards and obligations associated with AI systems. It comprises determining and assessing the risks connected to artificial intelligence (AI), establishing governance and control frameworks, keeping an eye on the hazards connected to AI, and disclosing such risks.

The use of AI to lessen prejudice and gender inequality creates appealing opportunities in the worldwide market for AI governance. AI is used in workplaces in big corporates to sort out resumes, which is ensuring that the gender ratio remains equal giving chances to both genders, leading to rising equality and reducing prejudices.

The current data warehouse design, the increasing number of government initiatives to employ AI technology, and the closing ethical-accountability gap are the three main drivers opening opportunities for market players. AI development in the BFSI sector is driven by the proactive customer experience that AI-assisted backend process automation provides by removing human mistakes. The growing use of chatbots and robot advisers for financial goods and smart wallets is also creating lucrative opportunities for market players.

Report Attribute	Detail
AI Governance Market Size (2024E)	US$ 298.5 Million
Forecasted Market Value (2034F)	US$ 3.22 Billion
Global Market Growth Rate (2024 to 2034)	26.9% CAGR
North America Market Value (2024E)	US$ 77 Million
Mexico Market Value (2034F)	US$ 72.3 Million
Small Offices Segment Growth Rate (2024 to 2034)	27.4% CAGR
United States Market Value (2034F)	US$ 640.3 Million
Key Companies Profiled	IBM Corporation; Scale AI; Microsoft; MOSTLY AI; H2O.ai; Kintsugi; Google; Arthur; SAP; Abzoids; Protopia AI; TruEra.

What is Making the AI Governance Market Grow So Fast?

“Transparency of AI Steadily Increasing the Trustworthiness”

One of the main factors driving the market is the rising requirement for AI systems to be transparent and trustworthy. The market's vendors are putting more emphasis on developments in artificial intelligence (AI), cloud computing, and services, including deep learning frameworks and machine learning techniques. The market is expanding quickly due to these causes. To guarantee the successful accomplishment of their corporate objectives, organizations are aggressively using these solutions.

As an example, a poll from the IBM Institute for Business Value indicates that during the next three years, there is an increase in the average amount spent on artificial intelligence (AI). Data accountability is a growing problem with the rising usage of AI, contributing to the overall expansion of the AI governance market growth.

As a result, addressing concerns of justice, discrimination, and trust has made openness imperative. These issues received a great deal of attention lately.

“Digitalization and Change in Customers Purchasing Practices”

The retail sector is undergoing significant transformation. Customers' channel choices and buying behaviors shift, as they become digital natives. Concerns over the data that powers this digital transformation are surfacing because of the move to digital. To increase overall retail performance, solve common issues, and maintain an advantage against strong retail rivals and nimble direct-to-consumer companies, AI governance is crucial.

For individuals who want instant access to data, governance reduces obstacles and increases the amount of data available to decision-makers. Retail businesses are utilizing AI and ML more as they are strong technologies, increasing the AI governance market size.

Nonetheless, businesses create thorough ethical policies and include them in the procedure. It is becoming clear that the creation of a code of conduct is facilitating effective data management techniques, provides structure and responsibility, and aids in the establishment of an organizational framework. These elements are thought to be leading variables for the expansion of the market.

“Large Volumes of Unstructured Data Pushing Requirement for AI Governance”

Innovation in artificial intelligence is accelerated by the availability of historical datasets. Large volumes of unstructured data are produced by government and healthcare organizations, and researchers easily access this data due to declining costs associated with data recovery and storage. Several topics are covered by these databases, such as historical weather trends and medical imaging.

The progress made in next-generation computer architectures enables academics and data scientists to accelerate innovation by granting broad access to substantial datasets. Furthermore, the integration of artificial intelligence (AI) across a range of industries, including aerospace, healthcare, manufacturing, and automotive, is accelerated by advancements in deep learning and artificial neural networks (ANN).

To ensure efficient AI governance, researchers and engineers working in AI need to increase the quality of the data. Evaluation and the learning algorithm-such as a deep neural network model—are key components of the success. This solution improves features including online and offline data storage, automated checkout systems, real-time offer administration, and sophisticated behavior analytics across several sectors. The ease of access to valuable information is leading to a significant increase in the need for governance in data storage systems.

Which Factors Possess the Potential to Slow Down the Market?

“Lack of Professional Expertise Hampering Market Growth”

Inadequate AI experience and abilities present the industry with serious hurdles. The fast advancement of artificial intelligence is leading to a growing necessity for efficient administration and regulation. However, certainly, the lack of knowledge to comprehend and manage the intricate moral, legal, and sociological challenges surrounding AI would obstruct the market's expansion.

Furthermore, a thorough grasp of AI technology, possible hazards, and wider societal ramifications is necessary for the experts needed to create strong rules and standards. Therefore, it is analyzed that the adoption would be further hampered by the shortage of qualified experts to reduce these hazards.

Country-wise Analysis

The world is becoming AI-oriented and there is a big requirement for a law and governance to check the uprise. The major countries contributing to this market are the United States, China, Canada, and South Korea. The United States market is forecasted to hold a strong AI governance market share in North America.

Why is the United States Becoming the Market Leader in AI in North America?

“Growing Emphasis and Practice of Ethical Framework”

Attribute	United States
Market Value (2024E)	US$ 60.2 Million
Growth Rate (2024 to 2034)	26.7% CAGR
Projected Value (2034F)	US$ 640.3 Million

There is an increasing need for AI governance as AI technology is in constant demand in the United States. The government and corporate sector are investigating several AI governance strategies, including legislative frameworks, technological standards, and ethical norms. Ensuring that AI systems are created, used, and governed in a way that optimizes their advantages while limiting their drawbacks is the aim of AI governance. Establishing a thorough and functional AI governance framework in the country still requires extensive work.

What is China Doing for Becoming a Leader in the East Asia Region?

“Government Taking Part in Implementing AI Governance”

Attribute	China
Market Value (2024E)	US$ 46.1 Million
Growth Rate (2024 to 2034)	27.6% CAGR
Projected Value (2034F)	US$ 527.6 Million

China's AI governance is expanding thanks in part to government backing. The government is taking steps to aggressively encourage the development of AI and to control and monitor its application. The country's climate is now more conducive to the expansion of AI governance with these supportive initiatives. One of the key reasons for the market's expansion in China is the large number of prominent businesses in the AI space that call the country home.

Category-wise Insights

The market is segmented into several categories including component and enterprise sizes where these AI governance software are implemented. Some of the major enterprise sizes include small offices and small enterprises.

Which Component is Highly Sought After in the End Market?

“AI Governance Services Preferred More Compared to AI Governance Platforms”

Attribute	AI Governance Services
Segment Value (2024E)	US$ 198.2 Million
Growth Rate (2024 to 2034)	27.1% CAGR
Projected Value (2034F)	US$ 2.11 Billion

AI governance services are highly sought after to ensure that their use of AI technology aligns with set objectives, values, and legal requirements. These services provide a comprehensive framework of rules, procedures, and cutting-edge technologies to guarantee the achievement of corporate objectives and adherence to ethical standards. The demand for AI governance services is driven by the need for transparency in AI-related decision-making, regulatory compliance requirements, and the growing awareness of the potential risks and challenges associated with AI.

Which Enterprise Size Majorly Uses AI Governance in Their Operations?

“Small Offices Frequently Uses AI Governance in Day-to-Day Tasks”

Attribute	Small Offices
Segment Value (2024E)	US$ 109.3 Million
Growth Rate (2024 to 2034)	27.4% CAGR
Projected Value (2034F)	US$ 1.19 Billion

Small offices are the primary users of AI governance in their day-to-day operations. These enterprises rely on AI governance solutions to manage the ethical, legal, and societal implications of AI systems in their business processes. With the increasing availability of platforms and tools for AI governance, small offices are integrating AI governance into their frameworks for managing business risk and ensuring the responsible development and application of AI. The use of AI governance allows small offices to address potential hazards and obligations associated with AI systems, including risk assessment, governance frameworks, and risk disclosure.

Business Condition

Key players in the AI governance market are improving and researching to introduce new products including AI automation in banking and AI diagnostics.

• NTT Data and Aurora Labs announced their worldwide strategic partnership in January 2023. The partnership aims to enhance efficiency and end-to-end security, including the 5G layer, in logistics by enabling over-the-air software upgrades that increase accessibility and flexibility. The combination of 5G with AI technology has led to this alliance, which is advantageous for several businesses.
• To streamline the backup process, SAP enhanced its pre-existing functions in April 2020 with additional automated features based on AI technologies, such as incident solution matching service and automatic translation.

Fact.MR provides detailed information about the price points of key players in the AI governance market positioned across the world, sales growth, production capacity, and speculative technological expansion, in this new market report.

Segmentation of AI Governance Market Research

• By Component :

  • Platform
  • Services

• By Enterprise Size :

  • Small Offices
  • Small Enterprises
  • Medium-Sized Enterprises
  • Large Enterprises
  • Very Large Enterprises

• By Region :

  • North America
  • Western Europe
  • Eastern Europe
  • Latin America
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa