AI Governance Market

Market Overview:

The global AI governance market size reached US$ 186.8 Million in 2023. Looking forward, IMARC Group expects the market to reach US$ 3,444.5 Million by 2032, exhibiting a growth rate (CAGR) of 38.24% during 2024-2032. The growing concerns regarding the ethical usage of AI, the implementation of stringent government regulations mandating AI governance, and an enhanced focus on security and privacy of sensitive data are some of the major factors propelling the AI governance market.

AI Governance encompasses policies, regulations, and practices that govern the development, deployment, and use of AI technologies with a focus on societal impact, privacy, fairness, accountability, and safety. The framework is characterized by transparency, non-discrimination and emphasizes the protection of personal data and privacy rights. AI governance includes certification processes, auditing, impact assessments, and public consultation that can be implemented through a collaborative effort involving governments, regulatory bodies, and civil society organizations. As a result, it is applied in various sectors like healthcare, finance, and autonomous vehicles to ensure ethical use of AI and maintain safety and reliability in AI-based systems.

The global AI governance market is primarily driven by the growing need for governance mechanisms ensuring transparency in AI algorithms and decision-making processes. This can be attributed to the increasing adoption of AI across various industries on the global level. Moreover, the augmenting demand for the demonstration of responsible AI practices in numerous end-use industries to enhance user trust is fueling the market. In addition to this, the adoption of risk assessment and the management of programs to combat unintended consequences of AI systems are also acting as another major growth-inducing factor for the market. The market is further driven by the rapid utilization of AI governance practices in organizations of all sizes to establish commitment to responsible AI as well as protect their brand. Furthermore, the rising need to gain a competitive edge, differentiate from competitors and attract consumers supporting responsible AI among organizations is creating a positive market outlook.

AI Governance Market Trends/Drivers:

Rising concerns regarding ethical AI usage

The growing presence of artificial intelligence (AI) in various industries and applications is leading to the growing ethical concerns regarding its potential misuse. The rising prevalence of biases in AI systems and lack of transparency in decision-making processes is propelling the need for strict measures regarding AI usage. As a result, the rapid utilization of AI governance solutions, including frameworks, guidelines, and practices to ensure responsible and ethical development with higher transparency, is providing an impetus to the market. The increasing adoption of AI governance for fostering responsible and sustainable adoption of AI technologies to build trust among users and stakeholders is creating a positive market outlook.

Stringent government regulations mandating AI governance

The implementation of stringent government regulations mandating AI governance in numerous end-use applications is a significant factor driving the market. Global governments and regulatory bodies are increasingly recognizing the risky aspects of artificial intelligence technologies and as a result, are enforcing responsible AI practices by implementing or considering regulations on the global level. The introduction of such regulations creates a compelling need for organizations to develop AI governance frameworks that align with these requirements. Consequently, there has been a rising need for compliance with government regulated AI governance solutions and services as companies strive to adhere to regulations and exhibit ethical AI practices.

Increasing emphasis on data privacy and security

The heavy reliance of AI systems on vast datasets containing potentially sensitive or personal information is leading to an increasing emphasis on data privacy and security, which is providing a boost to the market. An enhanced focus on the prioritization of data privacy and security measures by incorporating privacy-enhancing technologies is propelling the market growth. In addition to this, the implementation of protocols to safeguard data and adhere to privacy regulations, such as the General Data Protection Regulation (GDPR), is creating lucrative opportunities in the market. Continual technological advancements in encryption methods, access controls, and data anonymization techniques to mitigate the risks associated with data breaches is further creating a positive market outlook.

AI governance Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global AI governance market report, along with forecasts at the global, regional, and country levels from 2024-2032. Our report has categorized the market based on component, deployment mode, enterprise size, and industry vertical.

Breakup by Component:

• Solution
• Services
   

Solution dominates the AI governance market

The report has provided a detailed breakup and analysis of the AI governance market based on the product type. This includes solution and services. According to the report, solution represented the largest segment.

The rising adoption of artificial intelligence (AI) technologies in organizations across the globe is augmenting the need for effective governance solutions to ensure ethical, responsible, and compliant AI practices. In line with this, the rising concerns regarding risk mitigation associated with biased decision-making is another factor propelling the demand for AI governance solutions. Furthermore, the rising amount of data breaches due to AI operations is augmenting the demand for effective AI governance solutions, thereby propelling the segment growth.

On the other hand, there is a growing need for services related to AI governance with businesses across various industries adopting AI technologies to enhance their operations, which is driving the segment uptake. Furthermore, the increasing complexity of AI systems that require specialized knowledge for effective governance is propelling the demand for service providers who can offer expertise in AI governance strategies.

Breakup by Deployment Mode: 

• On-premises
• Cloud-based
   

On-premises deployment holds the largest segment in the AI governance market

The report has provided a detailed breakup and analysis of the AI governance market based on the deployment mode. This includes on-premises and cloud-based. According to the report, on-premises represented the largest segment.

The growing preference for on-premise AI governance solutions in organizations to maintain full control over data transfers is a significant factor propelling the segment. With the rising complexity of AI operations, the growing need to ensure security, especially when dealing with sensitive or confidential information, is bolstering the demand for on-premises deployment for ease of handling. Furthermore, the implementation of restrictions that mandate on-premise data storage and processing in numerous end-use industries are also increasing the number of on-premise AI governance deployment.

In addition to this, the advantage of scalability offered by cloud-based solutions allowing organizations to handle large volumes of data and AI models is resulting in a higher uptake of the segment. These solutions are also easily accessible, enabling businesses to implement and facilitate monitoring of AI governance across multiple locations and devices, which is creating lucrative opportunities for the segment.

Breakup by Enterprise Size:

• Large Enterprises
• Small and Medium-sized Enterprises (SMEs)
   

Large enterprises are dominating the AI governance market

The report has provided a detailed breakup and analysis of the AI governance market based on the enterprise size. This includes large enterprises and small and medium-sized enterprises (SMEs). According to the report, large enterprises represented the largest segment.

The rising incorporation of complex AI environments with numerous AI models, data sources, and stakeholders in large enterprises is a major factor that is fueling the segment growth. Additionally, large enterprises have a higher stake in maintaining their brand reputation and public image, thereby requiring AI governance solutions to help manage and govern the complexities effectively. Furthermore, the implementation of AI governance in demonstrating their commitment to responsible AI practices to build and enhance trust among consumers and stakeholders is also acting as a major growth-inducing factor for the segment.

On the other hand, With SMEs embracing AI technologies to improve efficiency, productivity, and competitiveness, the need for AI governance becomes critical to ensure responsible and ethical AI practices. Also, SMEs in regulated industries or those handling sensitive data must comply with certain governance standards, and AI governance is essential to meeting regulatory requirements, gaining customer trust, and mitigating risks.

Breakup by Industry Vertical:

• BFSI
• Government and Defense
• Healthcare and Life Sciences
• Media and Entertainment
• Retail
• IT and Telecom
• Automotive
• Others
   

BFSI holds the dominant position in the AI governance market

The report has provided a detailed breakup and analysis of the AI governance market based on the industry vertical. This includes BFSI, government and defense, healthcare and life sciences, media and entertainment, retail, IT and telecom, automotive, and others. According to the report, BFSI represented the largest segment.

BFSI sector is a significant shareholder in the AI governance market due to the heavily regulated policies, and the rising need for managing sensitive financial data and customer information. The integration of AI governance solutions assists in ensuring compliance with regulations, such as data protection, anti-money laundering (AML), and fraud prevention, which is propelling the segment growth. In addition to this, the rapid utilization of AI governance in financial institutions to avoid risks associated with AI-driven decision-making, algorithmic bias, and fraudulent activities is creating a positive outlook for the segment.

The other industries, such as government and defense, healthcare and life sciences, media and entertainment, retail, IT and telecom, and automotive, generate massive amounts of data, and AI technologies can help extract valuable insights for informed decision-making. To ensure the ethical and secure use of data in protecting patient privacy in healthcare and life sciences, consumer data in retail, and content integrity in media and product information and technological issues in automotive, these industries are increasing adopting AI governance.

Breakup by Region:

• North America
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

North America exhibits a clear dominance, accounting for the largest AI governance market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. 

North America held the biggest market share since the government is focusing on implementing stringent regulations regarding AI and data privacy, with initiatives such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). They are continually adopting AI governance solutions for ensuring compliance with various regulations in an effective manner.

Another contributing aspect to the market growth in this region is the continual technological innovation and AI research and development (R&D) activities conducted by key players. In line with this, the presence of several key players across the region is also resulting in a prominent presence of the region in the market.

Competitive Landscape:

The top players in the AI governance market are focusing on building frameworks that encompass guidelines, accountability mechanisms, and compliance standards to navigate the ethical and regulatory challenges associated with AI. They are also collaborating with regulators and policymakers to streamline the development of AI-related policies and regulations. The major players are also offering various services, such as auditing and certification to detect transparent, interpretable, and understandable AI systems. Furthermore, the top companies are conducting research and development (R&D) activities, training programs, and awareness campaigns to highlight the potential risks of AI and the need for robust governance practices on a global level.

The report has provided a comprehensive analysis of the competitive landscape in the global AI governance market. Detailed profiles of all major companies have also been provided. Some of the key players in the global AI governance market include:

• Atos SE
• Dataiku
• FICO Inc.
• Google LLC (Alphabet Inc.)
• H2O.ai Inc.
• Informatica Inc.
• International Business Machines Corporation
• NTT DATA Corporation (Nippon Telegraph and Telephone Corporation)
• SAP SE
• SAS Institute Inc.

Recent Developments:

• In February 2023, Atos announced the launch of its 5Guard security offering, which is a comprehensive security solution for ensuring the protection of their assets and customers through integrated, automated, and orchestrated security.
• In May 2023, Dataiku launched Dataiku 12, a new version of the everyday artificial intelligence platform, which is equipped with transformative features like Causal Machine Learning (ML), Transparent Automated Feature Generation, Model Risk Project Views for enabling organizations to enhance transparency and strengthening governance in organizations of all sizes.
• In May 2023, FICO Inc. launched an Inclusion Accelerator Program and Financial Inclusion Lab to advance lenders' adoption of alternative data solutions with an enhanced focus on new scoring products, partnerships, services, and platforms to enhance lenders' decision making and drive financial inclusion.

AI governance Market Report Scope:

Key Questions Answered in This Report:

• How has the global AI governance market performed so far, and how will it perform in the coming years?
• What are the drivers, restraints, and opportunities in the global AI governance market?
• What is the impact of each driver, restraint, and opportunity on the global AI governance market?
• What are the key regional markets?
• Which countries represent the most attractive AI governance market?
• What is the breakup of the market based on the component?
• Which is the most attractive component in the AI governance market?
• What is the breakup of the market based on the component?
• Which is the most attractive component in the AI governance market?
• What is the breakup of the market based on the deployment mode?
• Which is the most attractive deployment mode in the AI governance market?
• What is the breakup of the market based on the enterprise size?
• Which is the most attractive enterprise size in the AI governance market?
• What is the breakup of the market based on the industry vertical?
• Which is the most attractive industry vertical in the AI governance market?
• What is the competitive structure of the global AI governance market?
• Who are the key players/companies in the global AI governance market?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the orthodontic consumables AI governance market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global AI governance market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the AI governance industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.