Artificial Intelligence in Manufacturing Market to Reach $103.3 Billion by 2032

Pune, June 25, 2025 (GLOBE NEWSWIRE) -- The Artificial Intelligence in Manufacturing Market size was valued at USD 3.4 billion in 2023 and is estimated to reach USD 103.3 billion by 2032, growing at a CAGR of 46.08% during the forecast period of 2024–2032.

In 2023, the U.S. market was valued at approximately USD 0.8 billion and is projected to reach USD 23.9 billion by 2032, growing at a CAGR of around 45.73% from 2024 to 2032. Growth is fueled by Industry 4.0 adoption, a skilled AI workforce, and heavy investment in smart factory initiatives.

The hardware segment dominated the market and held the largest share, accounting for 42% of the revenue in 2023. This is attributable to the high demand for AI-enabled devices such as smart sensors, edge devices, and embedded chips in manufacturing equipment. Such elements allow data to be processed locally and in real-time, essential for cyber-physical systems in smart factories.

The software segment is expected to register the fastest CAGR, driven by cloud-native platforms, AI-as-a-Service models, and ongoing innovations in algorithms for machine learning. Manufacturers are now using software tools for predictive analytics, digital twins, production planning, and anomaly detection. Demand for flexible, subscription-based software platforms that can easily scale AI models and integrate with ERP and MES systems is driving innovation.

In 2023, the production planning segment held the largest market revenue share, due to the use of AI in real-time decision-making, demand forecasting, and optimizing resources. AI helps manufacturers by keeping track of inventories, creating an optimal sequence of workflows, and scheduling production effectively to reduce waste. With the help of AI-powered simulation tools and digital twins, production cycles can be optimized with adaptive allocation of resources.

The predictive maintenance and machinery inspection segment is projected to witness the fastest growth, driven by the demand to reduce unplanned downtime and increase machine life. AI allows for the identification of faults at an early stage, real-time diagnostics, and performance trends detection. Manufacturers now use IoT sensors and machine learning to predict failures in advance and automate maintenance schedules, saving downtime costs and enhancing safety.

The machine learning segment dominated the market and accounted for 34% of revenue share in 2023. It enables pattern recognition, process optimization, and intelligent decision-making from large datasets. This technology is instrumental in studying machine dynamics, configuring production lines, and optimizing asset usage. Elevate it to the cloud and integrate it with functions from supply chain to production, making it the foundation of AI-enabled manufacturing ecosystems.

Computer vision is expected to grow at the fastest rate due to the usage of defect detection, fine inspection, and method automation. Manufacturers are blending vision systems with AI for micro-defect detection, assembly line precision, and compliance. Visual data availability and cheap cameras make computer vision a core component of automated visual intelligence on the factory floor.

The medical device segment dominated the market in 2023, accounting for a significant revenue share due to stringent quality standards, precision requirements, and regulatory compliance. AI is used to automate cleanroom processes and enhance traceability, ensuring precision manufacturing. By combining digital twins and process analytics, manufacturers can achieve rapid prototyping and meet complex healthcare needs.

The automobile sector is projected to register the fastest CAGR due to an increase in the integration of AI with vehicle assembly, quality control, and supply chain processes. AI enables automatic welding, painting, and inspecting parts, improving consistency and throughput. AI-powered flexible manufacturing is a competitive edge in a world where there is a growing shift from petrol cars to electric and driverless cars.

North America led the market with 32% of revenue share in 2023, due to strong technological infrastructure, early adoption of Industry 4.0, and significant investments by major players in manufacturing. North America is a pioneer in AI robotics, edge computing, and software platforms integrated with smart factory models.

Rapid industrialization, smart manufacturing initiatives by governments, and increasing AI adoption among emerging economies such as China, India, and South Korea will fuel APAC's dominance during the forecast period, with the fastest CAGR. Artificial intelligence is being integrated into the electronics and automotive industries in the region for predicting maintenance needs, quality inspection, and flexible production systems.

SNS Insider, a leading market research and consulting agency, provides current, accurate market data, consumer insights, and opinions to help clients make informed decisions in a rapidly changing market landscape.