The AI Governance Market is expected to rise from USD 890.6 million in 2024 to USD 5,776.0 million by 2029, achieving a CAGR of 45.3% over the forecast period, according to a report by MarketsandMarkets™. The growth is driven by increasing regulatory scrutiny and demands for AI compliance, particularly in high-risk industries like healthcare and finance.
Key Drivers:
- Regulatory Pressure: Governments worldwide, including the European Union’s AI Act, are tightening regulations to ensure AI transparency, fairness, and risk management. This regulatory push has spurred the adoption of AI governance frameworks.
- AI Adoption in Regulated Industries: Highly regulated sectors, especially BFSI and healthcare, face stringent compliance demands, accelerating the need for governance tools to ensure legal and ethical AI use.
Market Segmentation:
- Product Type: Data governance tools are expected to dominate the market due to their role in ensuring data quality, bias mitigation, and compliance with evolving regulations.
- End Users: Software and technology providers are projected to be the fastest-growing segment, as they adopt AI governance solutions to ensure ethical AI systems and comply with growing data privacy laws.
Regional Insights:
North America is set to hold the largest market share by 2024, driven by regulatory frameworks like the California Consumer Privacy Act (CCPA) and federal funding initiatives that surpassed USD 1 billion in 2023. Organizations are implementing governance tools to meet compliance and consumer expectations, with 78% of American consumers favoring brands that adopt ethical AI.
Major Companies:
Leading players include Microsoft, IBM, SAS Institute, DataRobot, and Dataiku, along with innovative SMEs like Fiddler AI and Fairly AI.
