Edge AI Software Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2030)

Edge AI Software Market Size

Edge AI Software Market Trends & Growth Drivers

Increasing Adoption of 5G Networks Is Key Trend in Market

• The increasing adoption of 5G networks is a key trend in the market as it helps enhance the connection speed as well as bandwidth.
• Essentially, 5G offers higher data transmission speeds compared to 4G, thus allowing for a much quicker communication between edge devices and other parts of the network.
• 5G networks can support approximately 1 million connected devices per square kilometer.
• This enhances the connectivity and enables the deployment of more IoT sensors and devices.
• In addition to enabling more-frequent updates to AI models on edge devices, 5G's greater bandwidth helps maintain the accuracy and efficiency of these models.
• These advancements are expanding AI use cases, making edge AI particularly viable in areas that require real-time processing of large amounts of data, such as smart cities.

Expanding IoT Ecosystems Are Key Driver for Market

• The expansion of the IoT ecosystem is driven by the rapid automation in all facets of life.
• As per recent studies, the number of IoT devices worldwide is forecast to double from 15.9 billion in 2023 to more than 32.1 billion in 2030.
• Moreover, the market is growing due to the variety of application areas where IoT devices create large amounts of data at the network edge.
• Instead of transmitting all this data to centralized cloud servers for processing, these systems use AI to handle the it locally, which increases efficiency and responsiveness.
• The diverse application areas, the requirement for real-time decision-making, need to increase power efficiency, the availability of customized AI models, and demand for enhanced privacy and security are propelling the market.

Data Quality Management Are Major Challenge for Market

• Few variables, such as data inconsistency, where the edge device captures certain data in multiple forms and with varying degrees of accuracy, make data quality management difficult.
• This discrepancy may cause inconsistent results across a range of data sources, which could reduce the efficacy of AI models.
• Additionally, these devices’ limited storage capacity relative to cloud servers makes it challenging to store substantial amounts of historical data for training or reference, which may influence the caliber of AI model learning.
• Moreover, data synchronization, real-time data processing, data privacy and security, data validation and cleaning, limited human oversight, bandwidth constraints, and heterogeneous data sources are the other factors challenging market growth.

Edge AI Software Market Analysis

Component Insights

• The solutions category will dominate the market by contributing 60% revenue in 2024. This is due to the direct implementation of edge devices and the higher upfront investment by businesses, which is essential for core functionality.
• This category includes AI algorithms and models, edge computing platforms, software development kits (SDKs), and application-specific software solutions.
• The service category is expected to witness a CAGR of 35% in 2024−2030.
• This growth is due to the increasing complexity of edge AI implementations, the requirement for customization and optimization, ongoing support requirements, and the growing demand for end-to-end solutions.

The components covered in the report are:

• Solutions (Larger Category)
  • Standalone
  • Integrated
• Services (Faster-Growing Category)
  • Professional
    • Consulting services
    • Deployment & integration
    • Support & maintenance
  • Managed

Deployment Mode Insights

• Cloud category will hold the largest market share, of 70%, in 2024 and will grow at a CAGR of 36% in the forecast period.
• This is due to the increasing adoption of cloud services and the advantages they offer, such as scalability, flexibility, and easier integration with other cloud-based tools and platforms.
• Cloud-based edge AI solutions can efficiently handle and analyze the massive volumes of data generated at the edge because they make use of the extensive computational and storage capabilities of cloud infrastructure.
• This deployment mode will continue to grow quickly as more businesses use cloud technology for edge AI requirements.

The deployment modes analyzed in this report are:

• Cloud (Largest and Fastest-Growing Category)
• On-premises

Data Type Insights

• Video and image data will hold the largest market share, of 40%, in 2024 and will grow at a CAGR of 30% in the forecast period.
• This is due to the increasing demand for real-time visual analytics and the proliferation of applications across various sectors, including security and surveillance, automotive (such as autonomous vehicles), and retail (for customer behavior analysis).
• In the security and surveillance industry, edge AI enables real-time monitoring and anomaly detection, reducing the need for constant human oversight and minimizing response times to security incidents.
• In the automotive industry, edge AI analyzes camera video feeds to provide features such as lane-keeping assistance and collision avoidance, thereby supporting ADAS and autonomous driving technologies.
• Moreover, video analytics helps the retail sector by providing insights into consumer behavior, optimizing store designs, and enhancing the shopping experience.

The data types analyzed in this report are:

• Video and Image Data (Largest and Fastest-Growing Category)
• Audio Data
• Text and Language Data
• Environmental and Location Data
• Biometric Data
• Multi-Modal Data

End User Insights

• The manufacturing category will grow fastest in the coming years. The growth is driven by the large-scale adoption of Industry 4.0 technologies for a wide range of applications such as predictive maintenance, quality control, and process optimization.
• These technologies are necessary to handle and store the enormous volumes of data produced by industrial IoT devices.
• Additionally, there is a strong focus on automation and smart factory initiatives, further fueling the demand for advanced solutions in the industry.
• The healthcare category is expected to witness a CAGR of 30% in 2024−2030.
• The increasing use of AI in medical imaging and diagnostics to improve their precision and effectiveness is fueling the market's expansion.
• Moreover, real-time patient monitoring and analysis are becoming necessary to provide individualized care and interventions promptly.
• Apart from significantly improving patient outcomes, this lowers healthcare expenditures.

The end users analyzed in this report are:

• Manufacturing (Faster-Growing Category)
• Healthcare
• BFSI (Largest Category)
• Government
• Defense & Aerospace
• Retail & E-Commerce
• Telecommunications
• Transport & Logistics
• Others

Geographical Analysis

• The North American region will acquire the largest market share, of 40%, in 2024, due to the presence of leading-edge AI software vendors, early adoption of edge AI technology, and the strong demand for these solutions in key industries.
• Additionally, the government is actively working on integrating AI software across a wide range of sectors, such as public utilities, financial institutions, transportation, and military surveillance.
• Moreover, this region has the strongest technological infrastructure, the presence of major tech companies and startups, a high adoption rate of IoT and AI technologies, and early adoption of 5G networks.
• The Asia-Pacific (APAC) region is set to become the fastest-growing market, with a CAGR of 40% in 2024−2030.
• The need for advanced technologies that can boost productivity and efficiency is rising as regional countries' industrial sectors continue to progress.
• This demand is being further fueled by the rapid adoption of IoT devices, as businesses and industries look to use real-time data to improve automation and decision-making.

The regions and countries analyzed for this report includes:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest and Fastest-Growing Country Market)
  • U.K.
  • 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 and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia
  • South Africa
  • U.A.E. (Largest and Fastest-Growing Country Market)
  • Rest of MEA

Edge AI Software Market Share

This market is fragmented in nature because of the presence of various key players, including Microsoft Corporation, IBM Corporation, NVIDIA Corporation, Amazon Web Services Inc., and Edge Impulse Inc. They offer customized software, which continues to evolve, for several specialized uses. Additionally, the low barriers to entry and open-source initiatives drive fragmentation.

Edge AI Software Market News

• In March 2024, Advantech Co. Ltd. extended its partnership with NVIDIA Corporation to facilitate the deployment and development of AI applications, including GenAI.
• In March 2024, Hewlett Packard Enterprise Development LP debuted an end-to-end AI-native portfolio for generative AI. It introduced an edge to data center, on-premises, hybrid, and public cloud methods within the GenAI portfolio. In addition, it declared the availability of GenAI supercomputing systems featuring Nvidia components.
• In March 2024, Akamai Technologies Inc. and Neural Magic partnered to accelerate deep learning AI.
• In October 2023, Vapor IO Inc. launched Monetize, an AI edge partner program, with the help of Vapor IO's neutral and shared host infrastructure. This offers bundled AI services to help partners deploy real-time AI faster.