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Artificial Intelligence (AI) in IoT Market Value Analysis: What Growth Is Expected Over The Forecast Period?
The artificial intelligence (AI) in iot market size has experienced rapid expansion in recent years. This market is projected to increase from $19.38 billion in 2025 to $24.56 billion in 2026, demonstrating a compound annual growth rate (CAGR) of 26.7%. The growth observed during the historic period can be attributed to the adoption of cloud computing, the widespread proliferation of connected devices, significant advancements in machine learning algorithms, the expansion of smart manufacturing, and a rising demand for automation.
The artificial intelligence (AI) in IoT market size is projected to undergo significant expansion over the next few years, with an expectation to reach $63.64 billion in 2030, demonstrating a compound annual growth rate (CAGR) of 26.9%. This anticipated growth during the forecast period is largely driven by the integration of AI with edge computing, the ongoing development of smart cities and infrastructure, the expansion of industrial IoT networks, a rising demand for predictive maintenance solutions, and the advancements in autonomous transport and robotics. Prominent trends for the forecast period encompass edge AI integration, predictive maintenance solutions, real-time data analytics, AI-driven automation, and the refinement of smart sensors.
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Artificial Intelligence (AI) in IoT Market Development Factors: Which Trends Are Supporting Demand?
The future growth of Artificial Intelligence (AI) within the IoT market is anticipated to be propelled by the ongoing expansion of 5G networks. This 5G network expansion refers to the deployment and implementation of fifth-generation wireless cellular technology, which offers superior upload and download speeds, more consistent connections, and greater capacity than prior networks. The acceleration of 5G expansion is due to major operators and governments worldwide intensifying network deployments and coverage throughout 2023. Artificial Intelligence (AI) in IoT supports 5G network expansion by enabling intelligent device connectivity, real-time data processing, and automation at the edge, effectively utilizing the high-speed, low-latency capabilities of 5G infrastructure. For instance, in Germany, according to its federal network regulator Bundesnetzagentur in December 2023, 5G coverage by at least one network operator reached 90% of the country in October 2023, increasing from 79% a year earlier. Therefore, the expansion of 5G networks is a primary driver for the growth of Artificial Intelligence (AI) in the IoT market.
Artificial Intelligence (AI) in IoT Market Segment Landscape: Which Areas Lead Market Development?
The artificial intelligence (AI) in iot market covered in this report is segmented –
1) By Components: Software, Platforms, Services
2) By Technology: Machine Learning, Natural Language Processing, Image Processing, Speech Recognition
3) By-End-User: Energy And Utilities, Manufacturing, Retail, Transportation And Mobility, Banking Financial Services And Insurance (BFSI)
Subsegments:
1) By Software: AI Analytics Software, Edge AI Software, Security Software
2) By Platforms: IoT Platforms With AI Capabilities, Cloud-Based AI Platforms, Device Management Platforms
3) By Services: Consulting Services, Integration Services, Support And Maintenance Services
Artificial Intelligence (AI) in IoT Market Growth Trends Influencing Competitive Dynamics
Leading companies active in the artificial intelligence (AI) in IoT market are concentrating on developing advanced solutions, including edge AI and sensor-integrated IoT platforms, to improve operational efficiency, reduce costs, and strengthen security across connected devices. Edge AI IoT platforms refer to technological offerings that combine intelligent sensors, machine learning models operating on or near the device, and IoT connectivity to provide real-time analytics, anomaly detection, and automated decision-making without sole reliance on centralized cloud processing. For example, in December 2023, STMicroelectronics, a semiconductor company based in Switzerland, introduced the ST Edge AI Suite. This integrated ecosystem of hardware, software tools, and developer libraries is designed to assist industries such as automotive, consumer electronics, and building automation in embedding AI capabilities into smart sensors, microcontrollers, and IoT-enabled devices. The suite supports low-power edge inference, offers streamlined toolchains, and ensures seamless integration with IoT platforms to optimize both security and operational workflows.
Artificial Intelligence (AI) in IoT Market Industry Leaders And Market Competition
Major companies operating in the artificial intelligence (AI) in iot market are Amazon Inc.; Google LLC; Microsoft Corporation; Hitachi Ltd.; General Electric (GE); Intel Corporation; Accenture PLC; International Business Machines Corporation; Cisco Systems Inc.; Qualcomm Technologies Inc.; Oracle Corporation; Honeywell International Inc.; SAP SE; Fujitsu Limited; NVDIA Corporation; Texas Instruments Incorporated; STMicroelectronics; Infineon Technologies AG; Renesas Electronics Corporation; ARM Holdings; PTC Inc.; Softweb Solutions Inc.; SpaceTime Insight Inc.; CloudMinds Inc.
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Artificial Intelligence (AI) in IoT Market Leading Geography: Which Region Generates The Most Revenue?
North America was the largest region in the artificial intelligence (AI) in IoT market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence (AI) in iot market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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Wasay has over a decade of experience in market research, data modelling, and analytics, with prior experience at GlobalData and Decision Tree Consulting Services. At The Business Research Company , he leads research operations across syndicated studies, customized consulting engagements, and the Global Market Model platform. His professional experience includes supporting organizations such as Boston Consulting Group, KPMG, and Ernst & Young. Wasay holds a degree in Electronics and Communications Engineering, postgraduate management qualifications from International Management Institute Belgium and Indian School of Business and Entrepreneurship, and completed the Integrated Program in Business Analytics from Indian Institute of Management Indore.