2025-2034 Growth Prospects of the Explainable AI Market: Key Trends and Opportunities Analyzed
Updated 2025 Market Reports Released: Trends, Forecasts to 2034 – Early Purchase Your Competitive Edge Today!
How Significant is the Anticipated Growth Rate of the Explainable AI Market from 2025 to 2034?
In recent times, the size of the explainable AI market has seen a significant spike. We predict a surge from $8.1 billion in 2024 to $9.77 billion in 2025, indicating a compound annual growth rate (CAGR) of 20.6%. This escalating rate in the historic period can be tied back to the increasing utilization of AR and VR, the growing demand for XR displays and AR devices, expansion in display arenas, and overall economic growth.
The market size for explainable AI is projected to experience tremendous expansion in the forthcoming years and is expected to reach $20.74 billion by 2029, with a compound annual growth rate (CAGR) of 20.7%. The surge during the forecast period can be linked to a rise in adoption in educational games, a growing implementation of gesture-based computing, a surge in smartphone usage, an escalation in the use of connected devices, and an increasing acceptance in the healthcare and education sectors. Key trends during this period will include advancements in micro displays’ technology, the introduction of groundbreaking technology, development of extended reality technologies, the creation of a new in-vehicle display imaging systems, and the integration of cutting-edge technology in ERD.
Which Factors Are Enhancing the Growth of the explainable ai Market?
The escalate in the usage of the Internet of Things (IoT) is anticipated to boost the expansion of the explainable AI market in the future. The IoT pertains to a network of interconnected physical devices outfitted with sensors, software, and other technologies that collect and swap data, as well as communicate with each other via the internet or other communication channels. The role of Explainable AI (XAI) in the IoT is crucial, as it enhances user trust in machines, AI models become more interpretable and transparent, and it fosters transparency, dependability, and proficient decision-making in IoT systems. For instance, in 2023, as per a report released by Ericsson, a telecommunications company based in Sweden, total IoT connections amounted to 15.7 billion in 2023. This number is projected to grow by 16% to 38.8 billion connections by 2029. Consequently, the escalating usage of the Internet of Things (IoT) is catalyzing the expansion of the explainable AI market.
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Who Are the Dominant Players Pushing the Boundaries of the Explainable AI Market?
Major companies operating in the explainable ai market report are:
• Amazon Web Services_x000D_
• Alphabet Inc._x000D_
• Microsoft Corporation_x000D_
• Intel Corporation_x000D_
• International Business Machines Corporation_x000D_
How Are Market Trends Revolutionizing the Explainable AI Industry in Recent Times?
Prominent players in the explainable AI market are pursuing strategies of partnership to amplify their services and broaden their market reach. A strategic partnership comprises a cooperative pact between two or more entities, typically companies seeking to fulfill shared, long-term goals. For example, Fujitsu Limited, an Information and Communications Technology company based in Japan, formed a partnership with Informa D&B, a marketing and information company from Spain in July 2023. The goal of this collaboration is to improve decision-making through the utilization of Fujitsu’s transparent, data-processing and analyzing explainable AI. This step meets the growing requirement for advanced AI capable of managing risks, particularly in sectors such as financial fraud. XAI facilitates deep understanding of the decision-making process, enhances transparency and assurance while reducing biases.
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What Major Market Segments Define the Scope and Growth of the Explainable AI Market?
The explainable ai market covered in this report is segmented –
1) By Software Type: Standalone Software, Integrated Software, Automated Reporting Tools, Interactive Model Visualization
2) By Methods: Model-Agnostic Methods, Model-Specific Methods
3) By Vertical: Banking, Financial Services, And Insurance, Retail And E-Commerce, Information Technology Or Information Technology Enabled Services, Healthcare And Life Sciences, Government And Public Sector, Media And Entertainment, Manufacturing, Energy And Utilities, Telecommunications, Other Verticals
Subsegments:
1) By Standalone Software: Individual Explainability Tools, Model-Agnostic Explainability Solutions
2) By Integrated Software: Embedded Explainability in AI Platforms, Explainability In Data Analytics Tools
3) By Automated Reporting Tools: Automated Model Evaluation Reports, Compliance And Auditing Reports
4) By Interactive Model Visualization: Dashboard Visualization Tools, Interactive Data Exploration Tools
Which Geographic Areas Are Influencing the Growth of the Explainable AI Market?
North America was the largest region in the Explainable AI market in 2024. The regions covered in the explainable ai market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
How Is the Explainable AI Market Classified and Defined in Market Analysis?
Explainable artificial intelligence (XAI) is an artificial intelligence system designed to provide clear and understandable explanations of its decisions or outputs. It is used to describe an AI model, its expected impact, and potential biases and to help characterize model accuracy, fairness, transparency, and outcomes in AI-powered decision-making.
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