Artificial Intelligence (AI) in Healthcare Market By Component (Hardware, Software Solutions, Services), By Technology (Computer Vision, Context Aware Computing, Machine Learning, Natural Language Processing), By Application, By End-User, By Region and By Country; Outlook and Forecast, 2024 – 2030

Report Summary

Artificial Intelligence (AI) in Healthcare Market Share Statistics

Global artificial intelligence (AI) in healthcare market estimated to reach USD 180 Billion by 2030.

The market is projected to expand at a CAGR of 35% from 2024 to 2030. 

The artificial intelligence (AI) in healthcare industry was forecasted USD 21 Billion in 2023.

This exponential growth is attributed to several factors, including the proliferation of patient health-related digital information, increasing demand for personalized medicine, and the imperative to reduce healthcare costs. The rising global geriatric population, changing lifestyles, and the prevalence of chronic diseases further fuel the demand for early disease diagnosis and improved disease understanding.

Artificial Intelligence (AI) and machine learning (ML) algorithms play a pivotal role in revolutionizing healthcare systems, enabling accurate prediction of diseases based on historical health datasets. Deep learning technologies, predictive analytics, content analytics, and natural language processing (NLP) tools empower healthcare professionals to diagnose underlying health conditions at an earlier stage, facilitating proactive and personalized healthcare delivery.

What is AI in Healthcare?

AI in healthcare comprises a wide array of technologies, including machine learning, natural language processing (NLP), deep learning, computer vision, and others. These advanced technologies are reshaping the healthcare sector, empowering professionals and enhancing patient outcomes through data-driven solutions.

Machine learning algorithms, a subset of AI, analyze extensive datasets such as electronic health records (EHRs), medical imaging, genomic data, and patient-generated information from wearable devices. They identify patterns and trends, enabling healthcare providers to make well-informed decisions. Natural language processing (NLP) aids in understanding and generating human language, allowing AI systems to extract valuable insights from unstructured clinical notes, research papers, and patient records. Deep learning, a subset of machine learning, mimics the neural networks of the human brain to analyze complex datasets. In healthcare, deep learning algorithms excel in medical imaging analysis, facilitating early disease detection and diagnosis. Computer vision enables computers to understand and comprehend visual information. It is used in healthcare for applications such as medical image analysis, robotic surgery, and drug discovery among others.

AI in Medical Diagnosis: AI aids in improving the diagnostic process, reducing treatment costs, and enhancing health outcomes. For instance, AI algorithms can predict and diagnose diseases faster and more accurately than traditional methods, leading to improved patient care. Examples include the use of deep learning AI technology to improve breast cancer risk prediction and AI recognizing skin cancer better than experienced doctors.

AI in Drug Discovery: AI accelerates drug development processes by designing drugs, predicting side effects, and identifying ideal candidates for clinical trials. Additionally, AI enhances drug safety by streamlining pharmacovigilance processes, making medicines safer for global populations. It helps improve drug safety and predict toxicity, bioactivity, and other characteristics of molecules.

AI in Patient Experience: AI supports digital communications, offering tailored health tips, reminders, and personalized care. Natural language processing (NLP), predictive analytics, and speech recognition technologies improve communication between patients and healthcare providers, leading to more effective interactions and shared decision-making.

AI in Healthcare Data Management: AI breaks down data silos, connects information efficiently, and reduces administrative burdens. It helps gather and analyze vast amounts of patient data, contributing to more informed decision-making and efficient healthcare operations.

AI in Robotic Surgery: AI-enabled robots assist surgeons in performing minimally invasive procedures, leading to fewer complications, less pain, and quicker recovery times. AI in robotic surgery enhances surgical precision and improves patient outcomes. 

AI in Healthcare Administrative Workflow: AI streamlines and automates the administrative tasks, freeing up healthcare providers’ time for patient care. Generative AI aids in note-taking, content summarization, and accurate coding, and information sharing between departments, enhancing medical records' thoroughness and accuracy.

What are the Major Growth Drivers, Restraints, and Opportunities in the AI in Healthcare Market?

Surge of Patient Health Data Driving AI Adoption in Healthcare

The increasing digitalization of healthcare records, coupled with the widespread adoption of health-related wearable devices and sensors, has resulted in an unprecedented surge in the availability of patient health data. This influx of data serves as a catalyst for the widespread adoption of artificial intelligence (AI) in the healthcare sector. AI technologies boast the capability to efficiently analyze this vast trove of data, extracting invaluable insights that have the potential to revolutionize patient care. By harnessing AI-driven analytics, healthcare professionals can achieve more accurate diagnoses, devise personalized treatment plans tailored to individual patient needs, and ultimately enhance overall patient outcomes.

Within the healthcare industry, there has been an exponential growth in the generation of diverse datasets, encompassing electronic health records (EHRs), medical imaging files, genomic data, and more. These datasets serve as the foundation upon which AI algorithms operate, allowing for the identification of intricate patterns, enhancement of diagnostic accuracy, and the formulation of highly personalized treatment strategies. By leveraging AI capabilities, healthcare providers can unlock the full potential of these datasets, transforming raw data into actionable insights that drive tangible improvements in patient care.

Rising Demand for Improved Efficiency and Cost Reduction Accelerating AI Implementation in Healthcare

The global healthcare industry faces mounting pressure to enhance efficiency and reduce costs without compromising patient care standards. In response to this challenge, healthcare providers and organizations are turning to Artificial Intelligence (AI) as a solution. AI holds promise in delivering cost-saving opportunities by streamlining administrative processes, optimizing resource allocation, minimizing medical errors, and facilitating early disease detection and prevention.

Healthcare expenditure is a significant concern for both governments and individuals worldwide. AI presents a viable strategy to address this issue by driving efficiency improvements across various healthcare operations. By automating routine tasks and workflows, AI streamlines administrative processes, thereby reducing overhead costs associated with manual labor and paperwork. Additionally, AI-powered tools and algorithms enhance the accuracy and efficiency of medical decision-making, leading to improved patient outcomes and reduced healthcare expenses over time.

Surging Demand for Personalized Medicine Expands AI in Healthcare Market

The increasing demand for personalized medicine is catalyzing the growth of the AI in healthcare market. Personalized medicine, characterized by tailoring medical treatment to the individual characteristics of each patient, is gaining prominence within the healthcare industry. This approach acknowledges the unique genetic makeup, medical history, lifestyle factors, and treatment responses of each patient, paving the way for more targeted and effective interventions.

AI algorithms play a pivotal role in enabling personalized medicine by analyzing comprehensive patient data. By scrutinizing genetic information, medical histories, lifestyle habits, and responses to previous treatments, AI algorithms can derive actionable insights to formulate personalized treatment plans. These plans are customized to address the specific needs and characteristics of individual patients, thereby maximizing treatment efficacy and patient outcomes.

Shortage of Healthcare Professionals Spurs AI in Healthcare Industry

The global healthcare industry is facing a significant shortage of healthcare professionals, presenting challenges in delivering timely and quality care to patients. In response to this shortage, Artificial Intelligence (AI) is emerging as a vital solution, offering automation and support to clinicians across various healthcare settings.

AI technologies play a crucial role in alleviating the burden on healthcare professionals by automating routine tasks and providing valuable assistance in clinical decision-making. For instance, AI systems are adept at analyzing medical images such as X-rays, MRIs, and CT scans, enabling them to flag potential abnormalities and anomalies. By automating the initial analysis of medical images, AI allows radiologists and other clinicians to prioritize and focus their attention on interpreting the most critical cases promptly.

Artificial Intelligence AI in Healthcare Market Report Scope & Snapshot

AI In Healthcare Market Trends and Opportunities

Technological Advancements and Convergence of AI with Other Technologies

The convergence of technological advancements, particularly the integration of AI with other cutting-edge technologies, presents a multitude of opportunities for market growth. Cloud computing, when combined with AI systems in healthcare, provides scalable and cost-effective storage and processing capabilities for handling vast datasets securely. This integration empowers healthcare organizations to store and analyze extensive data resources efficiently.

Moreover, the proliferation of IoT devices represents another significant advancement in AI solutions. Wearable health trackers and monitors, integrated with artificial intelligence, enable continuous data collection and analysis. AI algorithms can interpret this data in real-time, detecting anomalies, predicting potential health issues, and ultimately enhancing patient outcomes.

AI-powered Remote Patient Monitoring and Telehealth

AI-based remote patient monitoring and telehealth are revolutionizing healthcare by enabling continuous monitoring outside traditional settings. This trend, supported by advancements in AI, addresses the increasing demand for remote services. Integrating AI into wearables and sensors allows real-time data collection for early issue detection. For instance, AI-equipped wearables can detect irregular heartbeats or glucose fluctuations, alerting providers promptly. AI-powered chatbots engage patients remotely, providing support and personalized advice. Patients can inquire about medications, schedule appointments, or receive health education. These innovations enhance accessibility and efficiency in healthcare delivery, thereby bolstering growth opportunities in the AI in healthcare market.

What are the AI in Healthcare Market Segmentations and Bifurcations? 

AI In Healthcare Market Segmentation based on Component

• Hardware

  • Memory

  • Network

  • Processor

• Software Solutions

  • AI Platform

  • AI Solutions

• Services

  • Deployment & Integration

  • Support & Maintenance

  • Others

In 2023, the AI in healthcare market was dominated by the software solutions segment, which captured a commanding revenue share of around 40%. This dominance stemmed from the escalating adoption of AI-powered software solutions among various stakeholders, including healthcare providers, payers, and patients.

A pivotal shift within the healthcare AI landscape is the integration of non-procedural languages, such as SQL, signaling a departure from the conventional dominance of procedural languages like Python and Java. These intuitive, declarative languages prioritize outcomes over step-by-step instructions, democratizing AI development and enabling direct contributions from healthcare professionals. This shift promises substantial segmental growth in areas such as clinical decision support systems, medical imaging analysis, personalized medicine, and public health, ultimately enhancing patient care and outcomes.

AI In Healthcare Market Segmentation based on Technology

• Computer Vision

• Context Aware Computing

• Machine Learning

  • Deep Learning

  • Supervised

  • Unsupervised

  • Others

• Natural Language Processing

  • Smart Assistance

  • OCR (Optical Character Recognition)

  • Auto Coding

  • Text Analytics

  • Speech Analytics

  • Classification and Categorization

• Others

In 2023, Machine Learning (ML) technology emerged as the leading segment, securing the largest share of the AI in healthcare market. With the healthcare industry grappling with vast datasets, including Electronic Health Records (EHRs), medical imaging, genomic data, and wearable device data, ML emerged as a critical tool. ML's strength lies in its capacity to navigate through these extensive and varied datasets, extracting valuable insights to empower healthcare providers in making data-driven decisions and improving patient outcomes. ML technology is deeply ingrained in healthcare solutions, aiding in disease diagnosis, prognosis, and treatment planning by leveraging patient data patterns and correlations to identify early disease indicators, forecast patient outcomes, and propose personalized treatment strategies.

AI In Healthcare Market Segmentation based on Application

• Administrative Workflow Assistants

• Clinical Trials

• Connected Machines & Medical Devices

• Cybersecurity

• Diagnosis

• Dosage Error Reduction

• Fraud Detection

• Medical Imaging & Diagnostics
• Precision Medicine

• Robot-Assisted Surgery

• Virtual Assistants

• Wearables

• Others

In 2023, clinical trials, medical imaging & diagnostics, and robot-assisted surgery emerged as the leading application segments in the global AI in healthcare market. The development of new drugs entails a complex and resource-intensive process, with clinical trials serving as a pivotal stage in assessing medication efficacy and safety. AI technology boosts clinical trial procedures by harnessing its capacity to swiftly and efficiently analyze extensive datasets. Machine learning algorithms can sift through patient data, medical records, and genetic information to refine trial design, identify suitable participants, and forecast outcomes. This optimization of processes not only expedites drug development timelines but also significantly curtails costs associated with conventional trial methodologies. Furthermore, AI-driven predictive modeling aids in refining trial protocols, leading to more streamlined and cost-effective trials. By scrutinizing historical data and simulating diverse scenarios, researchers can formulate trials that yield more dependable results in a condensed timeframe.

AI In Healthcare Market Segmentation based on End User

• Healthcare Providers

• Healthcare Payers

• Healthcare Companies

• Patients

• Others

In 2023, the healthcare companies emerged as the leading end-user segment in the AI in healthcare market, capturing the largest revenue share. The widespread adoption of AI technologies in drug development has sparked a revolution in the pharmaceutical landscape. By leveraging genomic information, medical records, and clinical trial data, AI enables the identification of personalized treatment options tailored to specific patient groups. Moreover, AI-driven analytics and predictive modeling enhance the design, execution, and analysis of clinical trials, resulting in more efficient and cost-effective trials. Recent study revealed that approximately 80% of professionals in the pharmaceutical and life sciences sectors utilize AI in drug discovery. Additionally, research suggests that AI technology reduces the time required by pharmaceutical companies to discover new drugs from 5-6 years to just one year, according to another study.

What are the Regional and Country Trends in the AI in Healthcare Market?

AI in Healthcare Market: Regional Trends and Outlook 

• North America

• Europe

• Asia Pacific

• South America

• Middle East & Africa

In 2023, North America emerged as the leading region in the global AI in healthcare landscape, commanding over 50% of the market share. This dominance is credited to several factors, including advancements in healthcare IT infrastructure, increased healthcare expenditures, and widespread adoption of artificial intelligence and machine learning technologies. The region benefits from favorable government initiatives and lucrative funding options, fostering a conducive environment for market growth. Additionally, North America boasts a robust presence of key players driving innovation in AI healthcare solutions.

The AI in healthcare market in Europe is positioned for notable expansion, driven by the widespread adoption of AI technologies and increasing investments from both government and private organizations. For instance, in 2021, the Department of Health and Social Care in Europe allocated over USD 49 million across thirty-eight AI initiatives aimed at enhancing patient care and expediting diagnosis. This concerted effort underscores the region's commitment to leveraging AI for improving healthcare outcomes. Countries such as Germany, the UK, France, Spain, Ireland, Switzerland, and Belgium are pivotal contributors, bolstering the region's formidable position in the AI in healthcare market.

The Asia Pacific region is forecasted to experience the highest growth rate in the AI in healthcare market during the forecast period. One significant driver of this growth is the escalating prevalence of cancer in Asia Pacific countries. According to a report by the National Library of Medicine, the Asia-Pacific region is projected to account for half of all cancer cases and 58% of cancer-related deaths by 2023. With nearly 60% of the global population residing in this region, the burden of cancer is substantial, necessitating advanced healthcare solutions.

How is the Competition Scenario in the AI in Healthcare Market?

AI in Healthcare Market: Competition Scenario and Outlook

In the fiercely competitive landscape of the AI in Healthcare Market, companies are employing innovative strategies like product development, partnerships, and mergers & acquisitions to meet the rising demand for early disease detection, precise diagnostics, cost containment, addressing healthcare provider shortages, and delivering value-based care. This market is marked by a multitude of key players, contributing to its high fragmentation.

Partnerships and collaborations play a pivotal role in the expansion of the AI in Healthcare Market. Companies are teaming up to leverage their expertise and resources in developing groundbreaking solutions. For instance, partnerships between technology giants such as Google Inc., Microsoft, IBM, and healthcare providers have yielded AI-powered tools for medical imaging analysis, clinical decision support, and personalized medicine. Similarly, collaborations between pharmaceutical firms and AI startups aim to streamline drug discovery and development processes, leading to the introduction of novel treatments and therapies.

Mergers and acquisitions are also reshaping the competitive landscape of the AI in Healthcare Market. In recent years, companies such as IBM, Intel Corporation, and Siemens Healthineers AG have acquired AI startups specializing in healthcare analytics, medical imaging, and clinical research.

Recent developments in the AI in Healthcare Market encompass the introduction of AI-powered virtual assistants for patient engagement and remote monitoring, the utilization of natural language processing for electronic health record (EHR) management, and the integration of AI algorithms into wearable devices for continuous health monitoring.

Some of the leading companies operating in the global AI in Healthcare Market include:

• Amazon Web Services Inc.
• Atomwise
• Babylon Health
• Biobeat
• CloudMedx
• COTA
• Enlitic
• FDNA INC.
• GE HealthCare Technologies Inc.
• General Vision Inc.
• Ginger
• Google Inc.
• IBM
• Intel Corporation
• IQVIA
• Itrex Group
• Johnson & Johnson Services Inc.
• Koninklijke Philips N.V.
• Lunit Inc.
• MDLIVE
• Medidata
• Medtronic
• Merative
• Merck
• Micron Technology
• Microsoft
• NVIDIA Corporation
• Oncora Medical
• Others

Some Recent Developments in AI in Healthcare Industry

• In March 2024, NVIDIA unveiled its latest innovation, Generative AI Microservices, aimed at revolutionizing medical technology (MedTech), drug discovery, and digital health. This cutting-edge approach seeks to reshape healthcare technology by harnessing advanced AI capabilities.

• In March 2024, Johnson & Johnson unveiled a partnership with Nvidia aimed at integrating cutting-edge AI devices and platforms from pre-operation to post-operation stages. These advanced artificial intelligence devices streamline vital information for surgeons, offering comprehensive support throughout medical procedures.

• In March 2024, GE HealthCare joined forces with Nvidia in March 2024 to bring AI to ultrasound technology. Leveraging Nvidia's technology, GE HealthCare developed an AI-powered research model named SonoSAMTrack. This model combines a foundational AI framework for segmenting objects in ultrasound images, allowing for precise identification of anatomies, lesions, and other critical areas.

• In March 2024, Microsoft and NVIDIA collaborated to enhance AI innovation and accelerate computing capabilities. This partnership capitalizes on Microsoft Azure's global scale and advanced computing, combined with NVIDIA’s DGX Cloud and Clara suite, to drive innovation and elevate patient care.

• In November 2023, Koninklijke Philips N.V. partnered with Vestre Viken Health Trust in Norway, deploying its AI Manager platform to enhance radiology workflows. The AI-enabled bone fracture application streamlined diagnoses, allowing radiologists to focus on complex cases. This initiative, spanning 30 hospitals and serving around 3.8 million people, marked Philips’ most extensive AI deployment in Europe, contributing to improved patient care and accelerated diagnostic processes.

• In October 2023, Microsoft unveiled new data and AI solutions, Microsoft Cloud, at the HLTH 2023 conference, empowering healthcare organizations to unlock insights and enhance patient and clinician experiences. The industry-specific data solutions in Microsoft Fabric provide a unified analytics platform, simplifying the integration of diverse health data sources and enabling secure access to valuable insights.

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