Artificial Intelligence of Things (AIoT) Market By Component Offering, By Technology, By Deployment Type, By End-User Vertical, By Region and By Country: Industry Size, Share, Growth, Opportunities, Outlook and Forecast, 2025 – 2035

Report Summary

Artificial Intelligence of Things (AIoT) Market Share Statistics

• The Artificial Intelligence of Things (AIoT) Market is expected to reach value of USD 180 Billion by 2035. 

• In 2024, the Global AIoT Market size was valued at USD 21 Billion. 

• As per Vertex, Worldwide AIoT Market is anticipated to grow at a CAGR of 27% from 2025 to 2035.

Global AIoT market is poised for substantial growth, driven by developments in AI algorithms, growth in the usage of IoT devices, and growing demand for smart automation solutions worldwide. AIoT facilitates smart connectivity, predictive analytics, and real-time data processing, thus being a key driver of the digital transformation of industries. The speed at which the AIoT market is growing indicates how businesses are incorporating AI capabilities with IoT devices to enhance automation, efficiency, and decision-making, reflecting an upsurge in investment and adoption across various industries.

Artificial Intelligence of Things (AIoT) Market Overview

Artificial Intelligence of Things (AIoT) refers to the seamless integration of Artificial Intelligence (AI) within IoT devices that creates systems capable of learning, evolving, and making decisions autonomously. While IoT concentrates on connectivity and sensor data gathering, AI enables IoT devices to analyze in real-time data and provide actionable information and automations. AIoT devices collect information through sensors, process locally or in the cloud, and make decisions or trigger activities in real-time. In contrast to conventional IoT devices, which mainly collect and send data, AIoT devices are capable of understanding and responding to data without continuous human intervention.

Few of the main components of AIoT are sensors, edge computing, AI algorithms, connectivity, and actuators, among others. AIoT is transforming a host of applications such as smart cities, healthcare, smart manufacturing, retail, precision agriculture, smart parking management, logistics, mobility & transportation, among various others.

Artificial Intelligence of Things (AIoT) Market Insights

• Based on the component offering, the platforms & software solutions segment to grow at the highest CAGR and secure a major market share of the global AIoT market.

• Based on the technology, the machine learning (ML) segment held largest market share in 2024, while the context-aware AI segment is expected to grow with highest CAGR during the forecast period.

• Based on the deployment type, the cloud-based segment is expected to dominate the global AIoT market and projected to grow with robust CAGR during the forecast period.

• Based on the end-user vertical, the manufacturing and consumer electronics segments held the largest market shares in 2024. Meanwhile, smart cities & infrastructure, healthcare & life sciences, and transportation & logistics segments are anticipated to expand at strong growth rates.

• Based on region, North America accounted for around 40% of the global AIoT market share in 2024. Asia Pacific region is projected to be the fastest-growing market, with a CAGR exceeding 30% through 2035.

What are the Regional and Country Trends in Artificial Intelligence of Things (AIoT) Market?

Global Artificial Intelligence of Things (AIoT) Market - Regional Segmentation and Trends

• North America
• Europe
• Asia Pacific
• South America
• Middle East and Africa

Asia Pacific is projected to be the fastest growing region, with a CAGR of over 30% by 2035. The rapid industrialization of the region, government-funded smart city development, and accelerating adoption of AIoT in industries are among the top growth drivers. Key markets in the Asia Pacific include China, Japan, India, South Korea, and Australia, all benefiting from swift urbanization, strong economic growth, and substantial investments in AI and IoT technologies. 

The widespread use of internet and mobile technologies, along with a large consumer base, is driving the implementation of AIoT applications in sectors such as consumer electronics, manufacturing, and transportation. As a significant manufacturing hub, Asia Pacific is leading the way in AIoT adoption within factories and supply chains. The expanding middle class is increasing the demand for smart home devices and other AIoT solutions. There are also considerable investments in smart city projects, particularly in developing nations. The region is projected to experience a very high growth rate, propelled by rapid urbanization, industrialization, and government funding for smart infrastructure.

North America held 40% share of the global artificial intelligence of things (AIoT) market in 2024. It can be attributed to early adoption of cutting-edge technologies, a strong industrial ecosystem, and high investments in both AI and IoT infrastructure in the region. The strong technology ecosystem in the region, dominated by key industry players, plays a pivotal role in driving new innovations and enhancing the functionality of AIoT. A supportive regulatory landscape, combined with strong research and development funding, has further hastened the adoption of AIoT in key sectors. Healthcare, manufacturing, transportation, and smart cities are being revolutionized in North America, resulting in operational enhancements, improved efficiency, and the development of mass-scale innovation. In addition, heavy investments in edge computing-specialized AI chips are changing paradigms of data processing.

What are the Artificial Intelligence of Things (AIoT) Market Segmentations and Bifurcations?

Artificial Intelligence of Things (AIoT) Market Segments by Component Offering

• Hardware 
• Platforms & Software Solutions
• Services

Based on component offering, the platforms & software solutions is expected to witness the fastest CAGR over the forecast period. The growing demand for AI based automation, real-time data analytics, and solutions for connectivity is fueling demand for AIoT platforms. These platforms are pivotal to device management, data ingestion, application development, and network connectivity and, therefore, are indispensable for enterprises infusing AI with IoT ecosystems.

Hardware segment accounted for the largest share of the AIoT market in 2024, fueled by the massive use of IoT devices. The hardware segment encompasses different sensors, smart microcontrollers, connectivity modules, AI chips/accelerators, and power management units, among others.

Artificial Intelligence of Things (AIoT) Market Segments by Technology

• Machine Learning (ML)
• Natural Language Processing (NLP)
• Computer Vision
• Context Aware AI
• Edge AI

In 2024, machine learning (ML) had the largest share in the AIoT market, owing to its capability of processing huge amounts of data generated by IoT devices and optimizing real-time operations. With industries increasingly utilizing ML-based algorithms for process automation, the demand for advanced deep learning models and AI-based analytics is expected to increase.

Context-aware AI technology is gaining tremendous traction and is anticipated to see the highest CAGR during the forecast period till 2035. Context-aware AI allows IoT systems to understand real-world surroundings and respond dynamically to user actions, environmental conditions, and operational requirements. Industries such as smart homes, healthcare, retail, and personalized digital services are fast adopting context-aware AI to provide improved user experience and seamless automation.

Artificial Intelligence of Things (AIoT) Market Segments by Deployment Type

• Cloud-Based
• On-Premises

The cloud-based segment is projected to dominate the AIoT market, with high growth rate during the forecast period. In 2024, cloud-based segment held around 60% of the AIoT market revenue, indicative of the increasing adoption of cost-efficient, scalable, and effective AI-powered IoT solutions. Firms are increasingly adopting cloud infrastructure to facilitate efficient real-time data processing, simplify device management, and optimize operational efficiency. Despite the growing dominance of cloud-based AIoT solutions, on-premises installations remain relevant to industries that place emphasis on data privacy, security, and regulatory compliance.

Artificial Intelligence of Things (AIoT) Market Segments by End-User Vertical

• Agriculture
• BFSI
• Consumer Electronics
• Energy & Utilities
• Government & Defense
• Healthcare & Life Sciences
• Manufacturing
• Retail & E-commerce
• Smart Cities & Infrastructure
• Transportation & Logistics
• Others

In healthcare and life sciences, AIoT is utilized to transform remote patient monitoring, AI-powered diagnosis, and high-end imaging technology, which translates into quicker, more precise treatments and better patient care.  Meanwhile, developments in smart cities are embracing AIoT in order to advance urban planning, traffic management, and public security, allowing it to create better, more interconnected, and more sustainable communities. The transportation and logistics industry is also witnessing a rapid expansion, with AIoT solutions improving autonomous driving, real-time route optimization, and fleet management, and thus optimizing the delivery efficiency as well as reducing costs.

In 2024, manufacturing segment and consumer electronics segment were the top end-users in the global AIoT market due to growth in predictive maintenance, automated operations, and smart connected devices. Companies are using AIoT solutions to make production more streamlined, minimize downtime, and make supply chain operations more efficient, leading to lower costs and higher productivity. Consumers are increasingly asking for smart wearables, smart home appliances, and AI-powered personal assistants, thus driving growth in the consumer electronics segment.

Artificial Intelligence of Things (AIoT) Market Report Scope & Snapshot

How is the Competition Scenario in Artificial Intelligence of Things (AIoT) Market?

Artificial Intelligence of Things (AIoT) Market - Competition Landscape

The Artificial Intelligence of Things (AIoT) industry is witnessing intense competition as companies strive to create sophisticated AI-based IoT solutions. Industry leaders, new startups, and specialized technology vendors are heavily investing in innovation, strategic partnerships, and AI-based automation to outcompete others. The AIoT industry is competitive, including platform vendors, hardware vendors, solution & service providers, data analytics companies, and algorithm & model vendors.

Some of the key companies operating in Artificial Intelligence of Things (AIoT) market include -

• AWS
• Axiomtek
• Butlr
• C3 IoT
• Cisco
• Clearblade
• Falkonry
• Google
• Hitachi
• HPE
• IBM
• Intel
• Microsoft
• NVIDIA 
• Oracle
• PTC
• Qualcomm
• Relayr
• Robert Bosch
• SAP
• SAS
• Semifive
• Sharp
• Softweb Solutions
• Telit Cinterion
• Tencent Cloud
• Terminus Group
• Uptake
• Wiliot
• Others