AI in IoT Market Will Hit USD 33.3 Billion in 2023

Tajammul Pangarkar
Tajammul Pangarkar

Updated · Jun 5, 2024

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Introduction

The global AI in IoT market is growing significantly, and it is expected to reach USD 109.3 billion by 2033, up from USD 33.3 billion in 2023, showing a strong CAGR of 19.7% from 2024 to 2033. This growth is driven by several key factors.

Firstly, the integration of AI with IoT improves operational efficiency, predictive maintenance, and data analytics across industries such as manufacturing, healthcare, and retail. For example, AI-powered IoT solutions enable real-time monitoring and predictive maintenance in manufacturing, reducing downtime and operational costs. In healthcare, AI in IoT facilitates remote patient monitoring and telemedicine, significantly improving patient care and operational efficiency.

The market is also fueled by technological advancements and increased investments. North America leads the market, with significant adoption of IoT and AI technologies, substantial investments in 5G-enabled IoT connections, and the presence of major players like Google, Microsoft, and IBM. The Asia-Pacific region is expected to experience rapid growth due to increasing internet penetration, advancements in mobile technologies, and a thriving manufacturing sector.

Recent developments in the AI in IoT sector include significant mergers, acquisitions, and funding rounds. In August 2023, Renesas Electronics acquired Sequans Communications, a cellular IoT chipmaker, for $249 million, aiming to enhance its product portfolio and market reach. Additionally, in June 2023, Renesas completed its acquisition of Panthronics AG, bolstering its capabilities in NFC technology.

In terms of funding, Envision Digital raised $210 million in a Series A round, focusing on its AIoT platform EnOS™, while Helium, a U.S.-based IoT connectivity company, secured $200 million in a Series D round led by Andreessen Horowitz and Tiger Global Management.

These strategic moves through mergers, acquisitions, and funding rounds underline the continuous growth and innovation in the AI in IoT sector, highlighting its potential to integrate advanced technologies for enhanced operational efficiencies and expanded market reach.

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Key Takeaways

  • The global AI in IoT market is anticipated to witness substantial growth, with a projected market size of USD 201.3 billion by 2033, soaring from USD 33.3 billion in 2023, indicating a robust CAGR of 19.7% over the forecast period from 2024 to 2033.
  • In 2023, the platform segment commanded the largest market share, capturing 61% of the AI in IoT market, showcasing its pivotal role in integrating AI with IoT devices and facilitating efficient data management and analysis.
  • Machine learning emerged as the dominant technology segment in 2023, holding a market share of 55%, owing to its accessibility, flexibility, and ease of use in identifying patterns and insights from IoT data without explicit programming.
  • The manufacturing sector led the end-user industry segmentation in 2023, accounting for 24% of the AI in IoT market share, driven by increased operational efficiency and reduced labor costs achieved through AI-powered IoT solutions.
  • Geographically, North America dominated the AI in IoT market in 2023, with a market share of 41.5%, attributed to factors such as advanced technological infrastructure, government support, and the presence of major tech firms driving AI and IoT integration.
  • By 2025, the global installed base of IoT connected devices is projected to exceed 30.73 billion units, reflecting the pervasive influence and widespread adoption of IoT across various industries and sectors.
  • Surveys indicate a growing trend of integration between AI and IoT, with 48% of organizations utilizing AI alongside IoT to advance automation initiatives, highlighting the synergistic relationship between these technologies.
  • The competitive landscape of the AI in IoT market is led by global technology firms such as Google LLC, SAP SE, PTC Inc., and Amazon Web Services Inc., each contributing unique innovations and solutions to drive market growth.

AI in IoT Statistics

  • Over 75 billion IoT devices are expected to be connected worldwide by 2025, increasing the need for AI to manage and analyze the data generated.
  • The manufacturing sector is leading in AIoT adoption, followed by healthcare, transportation, and smart homes.
  • Major companies like Microsoft, IBM, Google, and Intel are heavily investing in AIoT research and development, making the market for AIoT platforms and solutions more competitive.
  • In a 2024 survey, 68% of enterprises stated that AIoT is essential for their digital transformation strategies.
  • The Asia-Pacific region is expected to see the highest growth in AIoT adoption due to rapid industrialization, urbanization, and smart city initiatives.
  • The number of IoT-connected devices worldwide is projected to reach over 29 billion by 2030.
  • Global spending on IoT security measures was projected to reach $631 million in 2021, growing at a CAGR of 21.38%.
  • In healthcare, AI in IoT has resulted in a 45% decrease in patient falls, a 60% reduction in bedsores, and an 80% decrease in code blue events.
  • Smart city IoT adoption is driven by advanced connectivity technologies like 5G and satellite connections.
  • Significant funding rounds include Envision Digital’s $210 million Series A and Helium’s $200 million Series D.

Recent Developments

Acquisitions and Mergers:

  • In August 2023, Renesas Electronics acquired Sequans Communications, a French cellular IoT chipmaker, for $249 million.
  • This deal is expected to close in early 2024 and aims to expand Renesas’ presence in the IoT sector by integrating Sequans’ products into its own microcontrollers.
  • Hewlett Packard Enterprise (HPE) announced its acquisition of Juniper Networks, an AI-native network company, for $14 billion. This acquisition is aimed at enhancing HPE’s edge-to-cloud capabilities and is expected to close by late 2024 or early 2025.
  • In June 2023, Renesas also completed the acquisition of Panthronics AG, an Austrian wireless products company, for approximately $95 million. This acquisition will enhance Renesas’ NFC technology offerings.

Funding:

  • Envision Digital secured $210 million in Series A funding to expand its AIoT platform, EnOS™, which supports renewable energy management and efficient energy consumption.
  • Helium, a company focused on IoT connectivity, raised $200 million in a Series D round led by Andreessen Horowitz and Tiger Global Management.
  • Kinexon, a real-time location data and analytics platform provider, raised $130 million in a Series A funding round, leveraging their technology for applications in both manufacturing and sports.

Product Launches and Innovations:

  • At the SPS 2023 fair, Beckhoff introduced TwinCAT Chat, an AI-supported engineering tool designed to automate coding tasks within the TwinCAT XAE engineering environment.
  • In November 2023, Canvass AI launched an advanced version of its industrial AI software, incorporating generative AI for enhanced data analysis and predictive maintenance in the process industries.
  • Microsoft invested $10 billion in OpenAI to integrate generative AI into their products, significantly boosting the adoption and development of AI technologies across various industries.

Use Cases

  • Predictive Maintenance in Manufacturing: AIoT solutions in manufacturing can predict equipment failures before they occur, significantly reducing downtime and maintenance costs. This is achieved by monitoring machinery in real-time and using AI to analyze data and identify potential issues. This approach not only enhances operational efficiency but also extends the lifespan of equipment.
  • Autonomous Vehicles: Autonomous vehicles rely on a vast array of sensors to gather data about their surroundings. AI processes this data to enable real-time navigation and decision-making. This integration aims to improve driving safety and efficiency, with the potential to reduce traffic accidents caused by human error by over 90%.
  • Smart Cities: In smart cities, AI and IoT work together to manage resources more efficiently. This includes smart lighting systems that adjust based on real-time data, reducing energy consumption by up to 80%. AI algorithms also optimize traffic management and public transportation systems, improving urban living conditions.
  • Healthcare: AIoT applications in healthcare include wearable devices that monitor patient vitals and transmit data to healthcare providers in real-time. These devices can detect anomalies and alert medical staff to potential health issues, leading to timely interventions. AI also helps in managing chronic diseases and improving patient outcomes by analyzing health data trends.
  • Retail: In retail, AIoT solutions enhance customer experiences and streamline operations. Smart shelves use sensors to monitor inventory levels and automatically reorder stock when needed. IoT-enabled checkout systems reduce wait times, and personalized marketing strategies are developed based on customer behavior data.
  • Transportation and Logistics: IoT devices in transportation provide real-time tracking of shipments and vehicles, improving visibility and reducing losses. AI algorithms optimize routing and scheduling, enhancing fuel efficiency and reducing idle time. These technologies help ensure product quality during transport and improve overall supply chain efficiency.
  • Energy Management: AIoT applications in energy management involve smart HVAC systems that optimize energy use based on real-time data. Machine learning programs can reduce energy consumption by up to 20% by learning from past efficiencies. Smart grid technologies also use AI to manage energy distribution more effectively, supporting sustainability goals.

Conclusion

In conclusion, the AI in IoT market is poised for remarkable growth driven by technological advancements, increased investments, and the expanding application of AI in various sectors. Despite challenges, the continuous innovation and adoption of AI-powered IoT solutions are expected to propel the market forward significantly during the forecast period.

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Tajammul Pangarkar

Tajammul Pangarkar

Tajammul Pangarkar is a CMO at Prudour Pvt Ltd. Tajammul longstanding experience in the fields of mobile technology and industry research is often reflected in his insightful body of work. His interest lies in understanding tech trends, dissecting mobile applications, and raising general awareness of technical know-how. He frequently contributes to numerous industry-specific magazines and forums. When he’s not ruminating about various happenings in the tech world, he can usually be found indulging in his next favorite interest - table tennis.