Explainable AI Market by Component (Hardware, Software and Services), Deployment Mode (On-premise, Cloud), Application, End User, and Geography - Global Industry Analysis, Opportunities and Forecast up to 2029

Explainable AI Market Size

The global explainable AI market size was valued at $6.49 billion in 2023 and is projected to reach $17.70 billion by 2029, growing at a CAGR of 18.2% during the forecast period.

Explainable AI Overview

Explainable AI, or XAI, refers to creating artificial intelligence systems that can explain their decision-making in a way humans can understand. Unlike traditional AI, which can seem like a "black box" with complex processes, XAI aims to make AI more transparent and accessible, especially in tasks like recognizing images or understanding language. It's about making AI systems open and understandable for people.

Explainable AI Market Trends

• The market is expanding because XAI is being used in a variety of industries. When it comes to medical diagnosis and treatment recommendation systems, for example, XAI enables medical professionals to comprehend and have confidence in the decisions made by AI algorithms. Explainable models help medical professionals make better decisions by highlighting pertinent medical factors, offering possible treatments, and offering explanations for diagnoses.
• In the AI industry, there is a growing concern about the lack of qualified experts in the field of Explainable AI (XAI). The need for people with the know-how to create, deploy, and maintain XAI solutions is growing, as is the demand for transparent and interpretable AI systems. Competent XAI specialists are adept at creating methods and instruments that can make complicated AI models easier to understand and interpret. They also have a thorough understanding of these models. However the lack of these specialists may make it difficult for XAI to be successfully integrated into different industries, would restrict the use of responsible and moral AI systems more widely.
• Decision support systems in a variety of domains can be made better with XAI. XAI can help decision-makers make better decisions by providing clear and understandable insights into AI-driven decisions. Clinicians can use XAI to comprehend the logic behind AI-assisted diagnosis or treatment, which is especially helpful in the healthcare industry.

Impact of COVID-19 on the Explainable AI Market

The COVID-19 pandemic has had a notable impact on the Explainable AI (XAI) market, reshaping priorities and accelerating trends within the artificial intelligence landscape. As organizations increasingly relied on AI solutions for decision-making during the crisis, the demand for transparency and interpretability in AI models surged. The need for Explainable AI became paramount as businesses sought to comprehend and trust the reasoning behind AI-driven outcomes, especially in sectors like healthcare, finance, and critical decision-making processes. The pandemic underscored the importance of explainability in AI systems to ensure accountability, compliance, and ethical considerations. As a result, the Explainable AI market experienced heightened attention and growth, with businesses recognizing the significance of AI models that not only provide accurate predictions but also offer clear insights into the factors influencing those predictions. The pandemic served as a catalyst for a more responsible and understandable AI landscape, influencing the trajectory of the Explainable AI market in a post-COVID world.

By End User, the Healthcare and Lifesciences Segment is projected to be the Largest Segment in the Explainable AI Market

The healthcare and lifesciences segment is projected to be the largest segment in the explainable AI market during the forecast period owing to the heightened decision-making processes and enhanced patient outcomes. Within this end user, Explainable AI technologies play a pivotal role in rendering predictions and recommendations generated by AI models more transparent and interpretable for clinicians, researchers, and regulatory bodies. With the expanding application of AI in healthcare, the imperative to ensure explainability in AI-driven diagnostics, treatment recommendations, and drug discovery processes becomes paramount for building trust and mitigating risks.

By Geography, North America Region Holds the Dominant Position in the Market Revenue

North America region holds the dominant position in the market revenue. Regulations that stress the value of AI system transparency have been introduced in North America, mainly in the US and Canada. These regulations are particularly relevant to sensitive industries like finance, healthcare, and law enforcement. Organizations have been compelled to invest in Explainable AI technologies in order to comply with government regulations, such as the Algorithmic Accountability Act and the proposed Algorithmic Justice and Online Platform Transparency Act in the United States.

Key Target Audience:

• Regulatory Bodies and Policy Makers
• AI Researchers and Academia
• Data Scientists and Engineers
• Ethics Committees and Advocacy Groups
• Government Agencies

List of the Key Players Profiled in the Report Includes:

• IBM Corporation
• Alphabet Inc
• Microsoft Corporation
• Intel Corporation
• Inc
• C3 AI
• SAS Institute
• AWS
• Fico
• ai
• Equifax

Key Developments:

• In May 2023, IBM unveiled Watsonx, a revolutionary AI platform aimed at empowering businesses to harness the full potential of artificial intelligence. Prioritizing ethics and accountability. Watsonx governance establishes a robust framework for cultivating a responsible and transparent AI ecosystem. Through its XAI guidelines, this component ensures organizations can grasp the rationale behind AI model decisions, fostering trust and confidence among their customer base.
• In May 2023, Salesforce unveiled the latest version, OmniXAI version 1.3.0, introducing numerous improvements and features to enhance the interpretability and transparency of AI models. Through OmniXAI, developers can now delve into the intricacies of how AI models formulate predictions, facilitating a comprehensive understanding of the decision-making process and the ability to rectify potential biases or errors. The launch of version 1.3.0 underscores Salesforce's dedication to advancing Explainable AI (XAI) and empowering developers to construct more reliable and responsible AI systems.

Market Segmentation:

The research report includes in-depth coverage of the industry analysis with size, share, and forecast for the below segments:

Market by, Component:

• Hardware
• Software and Services

Market by, Deployment Mode:

• On-premise
• Cloud

Market by, Application:

• Industrial
• Cyber Security
• Customer Service
• Other Applications

Market by, End User:

• Banking, Financial Services and Insurance (BFSI)
• Retail & E-commerce
• Healthcare and Lifesciences
• Manufacturing
• Telecommunications
• Aerospace and Defense
• Other End Users

Market by, Geography:

The explainable AI market report also analyzes the major geographic regions and countries of the market. The regions and countries covered in the study include:

• North America (The United States, Canada, Mexico), Market Estimates, Forecast & Opportunity Analysis
• Europe (Germany, France, UK, Italy, Spain, Rest of Europe), Market Estimates, Forecast & Opportunity Analysis
• Asia Pacific (China, Japan, India, South Korea, Australia, New Zealand, Rest of Asia Pacific), Market Estimates, Forecast & Opportunity Analysis
• South America (Brazil, Argentina, Chile, Rest of South America), Market Estimates, Forecast & Opportunity Analysis
• Middle East & Africa (UAE, Saudi Arabia, Qatar, Iran, South Africa, Rest of Middle East & Africa), Market Estimates, Forecast & Opportunity Analysis

What Can be Explored with this Research Report:

• Understand the key trends that will drive the market and the challenges it faces in the current market scenario
• Identify growth opportunities
• Porter’s five force analysis
• In-depth analysis of market segments, and regions/countries predicted to observe promising growth
• Historical and forecast size of the market in terms of revenue (USD Million)
• Company profiling with key products and solution offerings, key financial information, SWOT analysis, and business strategies adopted

Table Of Content

1 Market Introduction 
 1.1 Market Definition 
 1.2 Research Scope and Segmentation 
 1.3 Stakeholders 
 1.4 List of Abbreviations 
 
2 Executive Summary 
 
3 Research Methodology 
 3.1 Identification of Data 
 3.2 Evaluation of Market Dynamics 
 3.3 Collaboration of Data 
 3.4 Verification and Analysis 
 3.5 Research Approach 
 3.6 Data Sources and Assumptions 
 
4 Market Dynamics 
 4.1 Market Drivers 
 4.2 Market Restraints 
 4.3 Market Opportunities 
 4.4 Market Challenges 
 4.5 Impact of COVID-19 on Explainable AI Market 
 
5 Porter's Five Force Analysis 
 5.1 Bargaining Power of Suppliers 
 5.2 Bargaining Power of Buyers 
 5.3 Threat of New Entrants 
 5.4 Threat of Substitutes 
 5.5 Competitive Rivalry in the Market 
 
6 Global Explainable AI Market by, Component 
 6.1 Overview 
 6.2 Hardware 
 6.3 Software and Services 
 
7 Global Explainable AI Market by, Deployment Mode 
 7.1 Overview 
 7.2 On-premise 
 7.3 Cloud  
 
8 Global Explainable AI Market by, Application 
 8.1 Overview 
 8.2 Industrial 
 8.3 Cyber Security 
 8.4 Customer Service 
 8.5 Other Applications 
 
9 Global Explainable AI Market by, End User 
 9.1 Overview 
 9.2 Banking, Financial Services and Insurance (BFSI)  
 9.3 Retail & E-commerce 
 9.4 Healthcare and Lifesciences 
 9.5 Manufacturing 
 9.6 Telecommunications 
 9.7 Aerospace and Defense 
 9.8 Other End Users 
 
10 Global Explainable AI Market by, Geography 
 10.1 Overview 
 10.2 North America 
 10.2.1 US
 10.2.2 Canada
 10.2.3 Mexico
 10.3 Europe 
 10.3.1 Germany
 10.3.2 France
 10.3.3 UK
 10.3.4 Italy
 10.3.5 Spain
 10.3.6 Rest of Europe
 10.4 Asia Pacific 
 10.4.1 China
 10.4.2 Japan
 10.4.3 India
 10.4.4 South Korea
 10.4.5 Australia
 10.4.6 New Zealand
 10.4.7 Rest of Asia Pacific
 10.5 South America 
 10.5.1 Brazil
 10.5.2 Argentina
 10.5.3 Chile
 10.5.4 Rest of South America
 10.6 Middle East & Africa 
 10.6.1 UAE
 10.6.2 Saudi Arabia
 10.6.3 Qatar
 10.6.4 Iran
 10.6.5 South Africa
 10.6.6 Rest of Middle East & Africa
 
11 Key Developments 
 
12 Company Profiling 
 12.1 IBM Corporation 
 12.1.1 Business Overview
 12.1.2 Product/Service Offering
 12.1.3 Financial Overview
 12.1.4 SWOT Analysis
 12.1.5 Key Activities
 12.2 Alphabet Inc 
 12.3 Microsoft Corporation 
 12.4 Intel Corporation 
 12.5 Salesforce. Inc 
 12.6 C3 AI 
 12.7 SAS Institute 
 12.8 AWS 
 12.9 Fico 
 12.10 H2O.ai 
 12.11 Equifax