AI In Healthcare Market (By Component: Software Solutions, Hardware, Services; By Application: Virtual Assistants, Connected Machines) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The global AI in healthcare market was surpassed at USD 30.66 billion in 2023 and is expected to hit around USD 684.88 billion by 2033, growing at a CAGR of 36.43% from 2024 to 2033. Personalized medicine, the need to lower healthcare costs, and the expansion of patient health-related digital data sets are some of the key factors propelling the industry.

Key Pointers

• North America led the market with largest revenue share of 58% in 2023.
• the Asia Pacific region is expected to expand at the highest CAGR of 40.18% from 2024 to 2033.
• By Component, the software solutions segment contributed the largest market share of 41% in 2023.
• By Component, the software solutions segment is anticipated to grow at the fastest CAGR from 2024 to 2033.
• By Application, the robot assisted surgery segment generated the maximum market share of 25% in 2023 and it is expected to grow at the fastest CAGR of 39.25% during forecast period.

AI In Healthcare Market Overview

The integration of Artificial Intelligence (AI) in the healthcare sector has ushered in a new era of possibilities, redefining the way medical services are delivered, managed, and optimized. This comprehensive overview explores the dynamic landscape of the AI in Healthcare market, shedding light on key components that drive its growth, applications, and the transformative impact it has on the healthcare ecosystem.

AI In Healthcare Market Growth

The growth of the AI in healthcare market is propelled by a convergence of influential factors that collectively contribute to its expanding trajectory. Advancements in machine learning technologies, coupled with the exponential increase in computational power, serve as catalysts for the development of sophisticated AI applications within the healthcare sector. The abundance of healthcare data, stemming from sources such as electronic health records and medical imaging, provides a rich foundation for machine learning algorithms to extract valuable insights. This convergence empowers healthcare professionals with enhanced diagnostic capabilities, personalized treatment modalities, and improved operational efficiency. The transformative impact of AI on patient care, characterized by early disease detection and tailored interventions, further fuels the market's growth. As the industry continues to harness the potential of AI, the synergy between technological innovation and healthcare needs is poised to drive sustained expansion in the AI in Healthcare market.

Report Scope of the AI In Healthcare Market

AI In Healthcare Market Dynamics

Drivers

• Increasing Healthcare Data Availability: The proliferation of electronic health records (EHRs) and the generation of vast datasets in healthcare settings offer a wealth of information for AI applications. These data-rich environments empower machine learning algorithms to extract meaningful insights, enhancing the accuracy and efficiency of medical diagnoses and treatment plans.
• Enhanced Computational Power: The rise in computational power, driven by advancements in hardware and cloud computing, facilitates the processing of complex algorithms and large datasets. This increased computational capacity enables real-time analysis, a crucial factor in the rapid and accurate decision-making required in healthcare settings.

Restraints

• Limited Interoperability of Systems: The existing healthcare infrastructure often comprises diverse systems and platforms that lack seamless interoperability. Integrating AI solutions into these heterogeneous environments can be challenging, hindering the smooth flow of data and collaboration among different systems.
• Ethical Considerations and Bias: Addressing ethical concerns related to AI in healthcare, such as algorithmic bias and fairness, is a critical restraint. Ensuring that AI applications are developed and deployed in a manner that avoids perpetuating existing biases in healthcare practices is a complex yet essential challenge.

Opportunities

• Precision Medicine Advancements: AI facilitates the analysis of vast datasets, enabling the development of personalized treatment plans based on individual patient profiles. This opportunity holds immense potential for advancing precision medicine, tailoring interventions to specific genetic, lifestyle, and environmental factors.
• Predictive Analytics for Disease Prevention: The application of AI in predictive analytics allows for the identification of potential health risks before they manifest. This proactive approach to healthcare enables early intervention, disease prevention, and the promotion of overall well-being.

Component Insights

The software solutions segment dominated the market with the largest revenue share of 41% in 2023 owing to the rapidly growing adoption rate of AI-based software solutions amongst healthcare providers, payers, and patients. For instance, in September 2019, GE Healthcare partnered with five Chinese local software developers namely, 12Sigma Technologies, Biomind, Shukun Technology, Yizhun Medical AI, and YITU Technology to collaboratively work on developing the Edison AI platform and support the smooth digital transformation of GE Healthcare.

The software solutions segment is anticipated to grow lucratively from 2024 to 2033. This dramatic growth rate is attributable to rising penetration of AI-based technologies in several healthcare applications such as cybersecurity, clinical trials, virtual assistants, robot-assisted surgeries, telemedicine, dosage error reduction, and fraud detection. Moreover, a growing number of strategic initiatives such as partnerships and seed investments undertaken by key players are contributing to the growth potential. Key players in this segment are IBM Corporation, NVIDIA Corporation, Intel Corporation, and Biosymetrics.

Application Insights

Based on application, the robot assisted surgery segment held the largest revenue share of 25% in 2023 and it is anticipated to grow at the fastest CAGR of 39.25% during forecast period. The increase in the number of robot-assisted surgeries and rise in investment for the development of new AI platforms are among few key factors supporting the penetration of AI in robot-assisted surgeries. As per a study, about 1,000 robot-assisted procedures were performed worldwide in 2000, whereas in 2018, this number increased to more than 1 million. Similarly, according to a study published in JAMA Network Open, robot assisted surgeries accounted for 15.1% of all the general surgeries in 2018, up from 1.8% in 2012.

In addition, in August 2019, the Clinical Robotic Surgery Association was inaugurated in India, which focuses on providing training to young surgeons in the field of robotic surgery, which indicates the surging demand for robotic surgeries. The adoption of AI technology is expected to increase owing to lack of skilled surgeons.

Regional Insights

North America dominated the market with largest revenue share of 58% in 2023, owing to advancements in healthcare IT infrastructure, growing care expenditures, widespread adoption of AI/ML technologies, favorable government initiatives, lucrative funding options, and presence of several key market players. Moreover, growing geriatric population, changing lifestyles, increasing prevalence of chronic disorders, growing demand for value-based care, and rising awareness levels towards the implementation of AI-based technologies are bolstering the market growth in North America.

Moreover, the Asia Pacific region is anticipated to register the fastest CAGR of 40.18% over the forecast period. This growth rate is attributable to the rapid innovations and development in the IT infrastructure and entrepreneurship ventures specializing in AI-based technologies. Increasing investments by private investors, venture capitalists, and non-profit organizations to enhance clinical outcomes, improve data analysis and data security, and reduced costs are driving the adoption rates. Favorable government initiatives supporting and promoting healthcare organizations and care providers to readily adopt AI-based technologies are some of the key factors driving the growth of the Asia Pacific market.

AI In Healthcare Market Key Companies

• Nuance Communications, Inc.
• IBM Corporation
• Microsoft
• NVIDIA Corporation
• Intel Corporation
• DeepMind Technologies Limited

Recent Developments

• Amazon Web Services and Slalom, LLC signed a strategic collaboration agreement in January 2023. The two businesses would plan and create AI-powered solutions for the financial services, healthcare, life science, and entertainment sectors through this joint venture.
• Microsoft announced in March 2022 that it will acquire Nuance Communications, a pioneer in conversational AI and ambient intelligence in a number of industries. Through the provision of accessible, reasonably priced, and efficient healthcare solutions, the collaboration will enhance the product offered to the patients.
• The AI-based cloud platform Nuance Precision Imaging Network, developed by NVIDIA Corporation, integrates diagnostic imaging data and patient-specific insights into the administrative and clinical workflows that are currently in place throughout the healthcare systems.

AI in Healthcare Market Report Segmentations:

By Component

• Software Solutions
• Hardware
• Services

By Application

• Robot-Assisted Surgery
• Virtual Assistants
• Administrative Workflow Assistants
• Connected Machines
• Diagnosis
• Clinical Trials
• Fraud Detection
• Cybersecurity
• Dosage Error Reduction

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• MEA