AI in Education Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

AI in Education Market Trends & Growth Drivers

Increasing Preference for Smart Content Is a Key Trend

• The growing preference for smart content is a key trend witnessed in the AI in education market, globally. Smart content is gaining traction in schools and other education institutions, as it allows educators to achieve better understanding with respect to learning platforms, which, in turn, plays a vital role in the teaching process.
• A smart digital content platform provides interactive study material by integrating gamification techniques, thus creating a realistic and fun classroom environment.
• Thus, companies are increasingly focusing on providing smart digital content solutions that allow students to practice exercises, get personalized content solutions, and obtain real-time feedback based on their progress.
• For instance, Netex Knowledge Factory S.A., a Europe-based provider of digital learning services, offers a digital learning tool, contentCloud, which allows educators to modify content according to the learning model.
• Besides, it enables them to support their content with videos, audio, animation, augmented reality (AR), and other features.

Rising Demand for Personalized Education Based on AI

• Surging demand for AI-supported personalized education solutions is a key factor driving the growth of the market, globally.
• Personalized learning solutions help in the better understanding of students, their educational background, interests, and academic goals, which, in turn, helps in creating a customized educational experience.
• Students can design courses according to their needs and also obtain feedback related to their progress throughout the course. For instance, in April 2024, Kangarootime Inc. acquired Clay Labs Inc., which is an AI learning platform.
• This type of AI platform allows users to create and customize courses based on their hobbies, interests, and career, by typing or speaking keywords.
• With the help of ML algorithms, the platform decides which words or phrases the user is familiar with and which ones demand more practice.

Lack of Skilled Professionals Is a Challenging Factor

• The lack of professionals with the required skill set to run AI-enabled educational platforms is the major factor restraining the growth of the AI in education market.
• To adapt to the AI-based teaching model, educators need to acquire additional skills and certification.
• As teachers continue to play a primary role in the online learning process, it has become imperative for them to gain insights from the learning platforms to further offer real-time guidance and feedback to students.
• Moreover, since teachers are quite familiar with the needs of their students, the effectiveness of AI-powered learning platforms lies in the optimum use of the technology.
• Hence, educators are required to acquire competencies that can help support the effective utilization of AI-powered learning platforms in schools and colleges. Some of these competencies are provided below:
• Research and data analytical skills, in order to interpret data gathered by an AI-supported learning system and provide students with personalized feedback
• Management skills in order to handle AI and human resources effectively
• Deep understanding of the AI-powered educational platform, in order to facilitate the right decisions pertaining to the selection of topics, course material, and assignments.

AI in Education Industry Outlook

Component Insights

• The solution category is estimated to have held a larger market share, of 70%, in 2024, and it is also expected to retain its position in the coming years.
• This is majorly attributed to the rising demand for AI academic solutions to enable educators to automate administrative tasks and explore more possibilities for improving the effectiveness of classroom teaching.
• Several key players are more focused on the enhancement of education systems day by day. In addition, the rising number of smartphone users, improving internet connectivity, increasing government initiatives, and surging acceptance of digital payment are driving the market in this category.

Components covered in the report include:

• Solutions (Larger Category)
• Services (Faster-Growing Category)

Deployment Insights

• The cloud category accounts for a larger market share of 75%, as estimated in 2024, and it is expected to witness the same trend in the coming years as well.
• This is attributed to the surging usage of cloud platforms to support IT modernization and increasing focus on reducing the total cost of ownership.
• Additionally, cloud technology enables students to enhance their knowledge and helps manage business processes, which results in increased pupil engagement and improved performance.

The following deployment modes are included in the report:

• Cloud (Larger and Faster-Growing Category)
• On-Premises

Technology Insights

• The NLP category is estimated to have held the largest share, of 65%, in the market in 2024. This is ascribed to the increase in demand for a natural language conversational experience among students and educators.
• NLP helps in processing speech and text in an electronic format from chats and discussions on portals, which, in turn, provides assistance to students for writing assignments and to educators for better assessment and analysis, thus enhancing the learning model.
• Thus, with the growing utilization of NLP technology, the market is expected to witness significant growth in the coming years.

Technology types covered in the report are:

• Natural Language Processing (NLP) (Larger Category)
• Machine Learning (ML) (Faster-Growing Category)

Application Insights

• The learning platforms category is estimated to have accounted for the largest revenue share of 45% in 2024, and it is expected to remain the largest during the forecast period.
• This is primarily ascribed to the rising preference for online and distance teaching courses by professionals and pupils, the increasing trend of self-learning through online platforms, the developing of soft skills of learners, the surging focus on the integration of next-generation technologies in the education sector, and enhanced teaching platforms.
• As a result, market players are focusing on the launch of platforms that offer customized teaching services.

It is further classified as:

• Content Delivery Systems
• Learning Platforms (Largest Category)     
• Virtual Facilitators
• Intelligent Tutoring Systems (Fastest-Growing Category)

End Use Insights

• Based on end use, the market is projected to witness the fastest growth in the higher education category, advancing at a CAGR of 47.7% during the forecast period.
• This can be attributed to the growing demand for personalized counseling among students, the increasing need for automating administrative tasks during admission processes, such as enrollment and course registration, and the rising demand for AI-supported learning platforms.

During the analysis, the following categories are covered:

• K–12 Education (Largest Category)
• Higher Education (Fastest-Growing Category)
• Academic Research
• Corporate Training

North America Is the Largest Market

• North America is estimated to have generated the highest revenue, of USD 1.6 billion, in 2024, and it is expected to remain in its position over the next few years.
• This is because the region has a highly developed educational infrastructure, a high focus on reducing the burden on teachers with respect to administrative tasks, huge spending on EdTech, an increased need for personalized learning in classrooms, and a surge in demand for intelligent solutions to improve students’ academic performance in the region.
• Furthermore, several key players are more focused on academic content in the form of audio, video, and charts, which is enabled by AI to enhance pupils’ knowledge.
• On the other hand, APAC is expected to be the fastest-growing regional market, progressing with a CAGR of 47.6% during the forecast period.
• This can be attributed to the growing need for automating processes in the education sector, the increasing trend of online education, and the surging government efforts to digitize the education system in the region.
• AI, in this regard, helps introduce new methods of learning for students besides optimizing operations in terms of reducing repetitive tasks for faculty and administrative staff and managing student outcomes.

Further, regions and countries analyzed for this report include:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Fastest-Growing Country Market)
  • U.K. (Largest Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest and Fastest-Growing Country Market)
  • South Africa
  • U.A.E.
  • Rest of MEA

Market Nature – Fragmented

Competition in the global AI in education market is gradually intensifying, on account of the increasing focus of higher education institutions, schools, and corporate offices on leveraging digital learning platforms in their environments. The market is characterized by the presence of major companies, including IBM Corporation, Microsoft Corporation, Pearson plc, and Google LLC. Besides, the market comprises other prominent players such as Anthology Inc., Carnegie Learning Inc., Jenzabar Inc., and Cognii Inc.

AI in Education Industry News

• In April 2024, EDUCAUSE launched a generative AI readiness assessment tool for higher education with Amazon Web Services Inc.
• In February 2024, Microsoft Corporation announced that it would offer AI-based skilling opportunities to around 2 million people in India by the end of 2025.
• In January 2024, IBM Corporation collaborated with the Gujarat Government to boost skilling in AI and emerging technologies.
• In December 2023, Kyron Learning, an AI-based startup, announced that it would use funds received from Series A funding to develop a learning platform that is easily accessible to all learning solution providers.