Edge AI Market

The global Edge AI Market is valued at USD 17.70 Billion in 2023 and is projected to reach a value of USD 101.20 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 21.4% between 2024 and 2032. The global market is driven by increasing demand for real-time data processing, reduced latency, and enhanced privacy. Advancements in AI algorithms, growing adoption of IoT devices, and the need for efficient, low-power computing solutions in industries such as healthcare, automotive, & manufacturing further fuel market growth.

Key Highlights

• North America dominated the market in 2023, with 40.2% market share, driven by the rapid technological advancements, strong adoption across industries, 5G network deployment, and significant investments by key players and government initiatives
• The Hardware segment accounted for the largest share, i.e., 54.2% in 2023 due to increased demand for AI-optimized chips, processors, and edge devices that enable real-time data processing, low latency, and power efficiency across industries such as automotive, healthcare, and consumer electronics
• Based on End-use Industry, the IT & Telecom segment dominated the market in 2023, with 22.3% of the market share, driven by the growing demand for Edge AI in network optimization, real-time data processing, enhanced customer experiences, and the rollout of 5G technology for low-latency applications
• The adoption of Edge AI is growing in smart cities and smart homes, where it is used for applications like smart surveillance, energy management, traffic control, and home automation

Component Overview

Based on Component, the global market is segmented into Hardware, Software, Edge Cloud Infrastructure, and Services. The Hardware segment held the largest revenue share of 54.2% in 2023.

The dominance of hardware segment is driven by the growing adoption of 5G networks and the increasing demand for IoT-based edge computing solutions that integrate IT and telecom. IoT devices extensively utilize dedicated AI processors for on-device image analytics. For example, in May 2022, Habana Labs, a subsidiary of Intel, launched its second-generation deep-learning processors to enhance data center and cloud efficiency with high-performance options for deep-learning inference and training.

The software segment, however, is projected to experience significant growth, with a compound annual growth rate (CAGR) of 24% during the forecast period. The expansion of 5G networks facilitates the establishment of edge data centers and the deployment of industry-specific networks through software-defined networking. As 5G networks proliferate, increasing data transfer volumes to data centers will heighten the demand for intermediary servers and edge networks. Edge AI software, providing real-time data without reliance on other systems or internet connections, is a key driver behind the growth in the software sector.

Regional Overview

North America dominated the global market with a revenue share of 40.2% in 2023. This is driven by the widespread adoption of advanced technologies such as AI, deep learning, & machine learning, particularly in the US, which plays a crucial role in maintaining the region's competitive edge. The US government is heavily investing in artificial intelligence technology nationwide. For example, in March 2024, Innodisk, a leading provider of AI solutions, showcased its expertise in Edge AI integration at NVIDIA GTC in San Jose. Innodisk demonstrated its customizable AI solutions and camera modules in conjunction with NVIDIA's AI visual technology, highlighting their practical applications across various industries.

Asia Pacific is expected to experience substantial growth throughout the forecast period, driven by the increasing adoption of information-intensive AI and machine learning technologies across countries like India, China, and Japan. For example, in October 2023, US-based semiconductor manufacturer Blaize teamed up with NEXTY Electronics, a Japanese supplier of electronic components and equipment, to introduce Blaize’s AI edge computing products to Japan’s industrial and automotive sectors.

Key Trends

1. Integration of AI with IoT: Combining AI with IoT enables real-time data analysis at the edge, reducing latency and bandwidth use, driving growth in smart homes, cities, and industries.
2. Advancements in AI Hardware: Progress in specialized AI chips, such as edge-optimized GPUs, TPUs, and NPUs, is enhancing processing capabilities and power efficiency, fostering adoption in edge devices.
3. 5G Deployment: The expansion of 5G networks is accelerating Edge AI adoption by providing the high-speed, low-latency connectivity needed for real-time applications in autonomous vehicles, augmented reality, and remote healthcare.
4. Edge AI in Autonomous Systems: Increasing use of Edge AI in autonomous vehicles, drones, and robotics for faster decision-making and reduced dependency on centralized cloud systems is driving market growth.
5. Enhanced Security and Privacy: Growing concerns over data privacy and cybersecurity are pushing organizations to process data locally on edge devices, minimizing data transfer to centralized servers and reducing potential vulnerabilities.
6. Hybrid AI Architectures: Organizations are leveraging hybrid architectures combining Edge AI and cloud AI to balance processing power, storage, and latency, enhancing flexibility and scalability.
7. Adoption Across Industries: Edge AI is rapidly being adopted across industries such as healthcare, manufacturing, retail, and finance for applications like predictive maintenance, real-time monitoring, personalized customer experiences, and fraud detection.

Market Dynamics

Real-Time Data Processing with Edge AI in IoT and MEC

Edge AI facilitates real-time data processing on IoT devices by enabling high-performance computation directly on the device or a nearby server, reducing latency and accelerating data processing. For example, in March 2023, Minima Global Ltd, a European blockchain platform developer, partnered with Inferrix Limited, a UK software company, to merge blockchain technology with IoT edge and AI solutions, aiming to enhance secure and efficient communication between sensors and safeguard critical data. Multi-Access Edge Computing (MEC) architecture further supports this by providing storage, computation, and networking at the network's edge, close to users and devices. For instance, in February 2023, Cellnex Ireland and Dublin City University collaborated to build a 5G-enabled smart campus, deploying telecommunication infrastructure to ensure 5G coverage and MEC capabilities throughout the campus, demonstrating the practical application of Edge AI in processing camera video streams over a 5G connection.

Advancements in Autonomous Vehicles and Robotics with Edge AI

The increasing need for autonomous vehicles drives the demand for real-time data communication with the cloud to ensure optimal performance. Advanced artificial intelligence & machine learning technologies support these self-driving systems in making decisions, connecting to edge computing to enhance efficiency, safety, and reduce traffic congestion. Similarly, robotics applications are gaining traction due to their reduced latency and bandwidth requirements. AI-powered robots, drones, smart factories, & smart ports are examples of where this technology is making an impact. For instance, in March 2024, WeRide and Lenovo Vehicle Computing formed a strategic partnership to develop Level 4 autonomous driving solutions tailored for commercial use. This collaboration features Lenovo’s AD1 autonomous driving domain controller, leveraging NVIDIA DRIVE Thor & its Blackwell architecture for generative AI tasks, supported by NVIDIA's advanced data center AI solutions.

Growing AI Applications in Healthcare and Cybersecurity

The use of artificial intelligence in the healthcare sector is rapidly expanding due to its ability to deliver precise & reliable results. Key applications include image analysis, virtual diagnostics, robotics-assisted surgery, and electroceuticals, which enable healthcare providers to analyze health data and facilitate remote patient interactions. Additionally, the edge-based cybersecurity solutions are essential for protecting sensitive health information. Top companies in this market are focused on advancing these technologies to enhance performance & efficiency. For example, in September 2022, Nvidia broadened its Edge AI technology for healthcare and robotics with the introduction of the Nvidia IGX Platform. This platform targets both industrial and medical applications to boost performance and provide real-time insights.

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Competitive Landscape

The global market is highly competitive, dominated by a few key players with significant market shares. A major focus is on innovation and strategic collaborations among these leading companies. For example, in May 2021, STMicroelectronics, a major European semiconductor firm, acquired French software company Cartesiam to enhance its technology portfolio and strengthen its AI strategy.

The continuous drive for innovation and technological advancement offers industries & enterprises opportunities to reinvent and expand their product offerings. By adopting these strategies, market leaders aim to maintain their competitive edge and keep pace with digital economic growth, attracting a broader customer base and boosting revenue through new product launches and innovations. For example, in May 2024, IBM is expanding the capabilities of its Power server to support AI workloads from the core to the cloud and edge, offering enhanced business value across various sectors. As organizations in retail, manufacturing, healthcare, and transportation increasingly leverage artificial intelligence, they are deploying workloads at the edge to maximize data utilization right where it is generated.

Recent Market Developments

IBM Unveils Next-Generation Processor Innovations to Boost AI Performance on IBM Z Mainframe Systems

• In August 2024, at Hot Chips 2024, IBM announced architectural details for the forthcoming IBM Telum II Processor and IBM Spyre Accelerator. These advanced technologies are set to greatly enhance processing power in the next-generation IBM Z mainframe systems, enabling simultaneous acceleration of traditional & Large Language AI models through a novel ensemble approach.

ADLINK’s AI Edge Server Achieves Successful Deployment in Smart Manufacturing

• In July 2024, ADLINK Technology Inc., a global leader in edge computing, has introduced the new AI Edge Server MEC-AI7400 series, aimed at advancing smart manufacturing and fostering AI-driven digital transformation. By harnessing the capabilities of generative AI and digital twins, ADLINK bridges the gap between physical and virtual realms, paving the way for future innovations.

ADLINK Unveils New Advancements in Edge AI with NVIDIA at COMPUTEX 2024

• In June 2024, ADLINK Technology Inc. is exploring new opportunities across various industries at COMPUTEX 2024. Partnering with NVIDIA, ADLINK is advancing innovations in healthcare, smart manufacturing, smart transportation, and AI graphics.

Tech Industry Partners with NVIDIA to Develop AI Factories and Data Centers for the Next Industrial Era

• In June 2024, NVIDIA and leading computer manufacturers have introduced a range of systems powered by NVIDIA Blackwell architecture, featuring Grace CPUs and NVIDIA's networking and infrastructure. These systems are designed to help enterprises establish AI factories and data centers to spearhead the next advancements in generative AI.

Nutanix and NVIDIA Partner to Speed Up Enterprise AI Integration

• In May 2024, Nutanix, a leader in hybrid multicloud computing, has announced a new partnership with NVIDIA to facilitate the adoption of generative AI (GenAI) by enterprises. By integrating NVIDIA NIM inference microservices with Nutanix GPT-in-a-Box 2.0, the collaboration will enable customers to develop scalable, secure, and high-performance GenAI applications both across their enterprises and at the edge.

Nutanix Accelerates Enterprise Generative AI Adoption

• In May 2024, Nutanix has unveiled enhanced features for Nutanix GPT-in-a-Box, including integrations with NVIDIA NIM inference microservices and the Hugging Face Large Language Models (LLMs) library. The company also introduced the Nutanix AI Partner Program, designed to unite top AI solutions and services providers to assist customers in deploying, managing, and securing generative AI (GenAI) applications on the Nutanix Cloud Platform and GPT-in-a-Box.

Microsoft Invests $1.5 Billion in Abu Dhabi’s G42 to Boost AI Development and Global Expansion

• In April 2024, G42, a leading AI technology holding company based in the UAE, and Microsoft Corp. have announced a significant $1.5 billion investment by Microsoft in G42. This strategic investment aims to enhance the collaboration between the two companies, advancing Microsoft’s AI technologies and training initiatives in the UAE and internationally.

Intel Expands AI Reach Across Network, Edge, and Enterprise at MWC 2024

• In February 2024, at MWC 2024, Intel unveiled a comprehensive suite of platforms, solutions, & services designed to enhance AI capabilities across network, edge, and enterprise environments. This includes the latest Intel Core Ultra processors and advancements in AI-powered PCs.

The global Edge AI market can be categorized as Component, Application, End-use Industry, and Region.