AI Governance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global AI Governance market was valued at USD 107.56 million in 2021, and it is expected to reach a value of USD 528.06 million by 2027, registering a CAGR of 31.97% over the forecast period 2022-2027.​​ The growing consumer concerns about privacy, misuse, and bias climb is among the key factors driving the demand for AI governance as one of the primary objectives of AI governance is to deliver ethical and transparent AI to establish accountability, oversight, and responsibility.

Key Highlights

• Enterprises increasingly recognize the value associated with the incorporation of artificial intelligence (AI) into their business processes to improve operational efficiency and reduce cost through automation of process flows.
• Thus, companies have been using autonomous processes to improve operations and change the face of customer service (for example, through AI-powered chatbots) while spurring innovation to new heights. AI is a set of algorithms that can solve a specific set of problems and works best with a significant volume of high-quality Big Data. Chatbots can cut down the operational costs for businesses by up to 30%.
• The growing interest of enterprises in AI Governance frameworks is also encouraging the vendors and startup companies to develop innovative frameworks that can meet the demand of their customers. For instance, in October 2021, Credo AI, a San Francisco-based company, announced that it is focusing on building ethical AI to help companies manage the regulatory and ethical risks of their artificial intelligence products. The company tries to do that in part by providing what it calls an "auditable record" of the data and decisions that go into the creation, testing, deployment, and monitoring of AI products.
• AI and Machine learning (ML) has significantly helped in analyzing data related to COVID-19. In April 2020, Amazon Web Services launched Cord-19 Search, a new website powered by ML that could help researchers quickly and easily utilize natural language questions to search tens of thousands of research papers and documents. Since the research papers and other documents often involve confidential information, the demand for effective governance frameworks is expected to grow.

Key Market Trends

Growing use of AI in Retail is Expected to Open Up New Avenues for Market Growth

• The global retail industry is witnessing a massive transformation. As customers become digital natives, their channel preferences and buying habits change. The transformation to digital has created concerns about data that drive digital transformation.​
• Proper AI governance is critical to improving overall retail performance, overcoming common challenges, and staying ahead of more powerful retail competitors and more nimble direct-to-consumer brands. Governance eliminates friction for those requiring fast access to data, which makes more data available to more decision-makers.
• AI and ML are powerful technologies that are being increasingly deployed by retail firms. However, when the companies should deploy them with a comprehensive ethics plan in the process. The development of a code of conduct is expected to create structures and accountability, leading to good data-management practices facilitating the establishment of a framework that provides guidance for the entire company.
• Ethical AI interactions are increasingly driving consumer trust, satisfaction, and decision-making. According to the Capgemini Research Institute research, the companies that are perceived to be ethically using AI and ML have a 44-point Net Promoter Score (NPS) advantage over those that are not.
• Retailers across the globe are also preparing their workforce for deploying end-to-end AI-driven solutions. This is expected to create major opportunities for the market in the future. A major retailer recently set up a comprehensive training program to equip its 40,000 employees for its AI transformation.

North America is Expected to hold the Major Share

• The North American region is one of the early adopters of AI technology and hence is also expected to generate maximum opportunities for this market. For instance, the United States National AI R&D Plan has recommended the development of an AI R&D implementation framework that helps organizations across the country incorporate ethical considerations into the R&D without compromising on public engagement and how to market one’s organization better.
• The government in the United States is also proactively adopting measures for AI Governance. The government announced the adoption of AI ethical principles in line with the Department of Defense AI strategy objective, thereby facilitating the ethical and lawful use of AI systems by the United States military and associated industries.
• Organizations in North America, particularly in the United States, leveraged the benefits of AI, ML, and deep learning technologies to stay ahead in the industry. The country has well-established economies, which enable AI, governance vendors to invest in new technologies. Furthermore, it is regarded as the center of innovation where major IT players are rolling out intelligent devices and collaborating with other companies in the AI governance market.
• Recent concerns over big tech and the impacts of technologies like facial recognition have drawn significant attention to the prospects for artificial intelligence regulation in the United States. The United States’ AI strategy has been a consistent topic of interest among academics, policymakers, and industry.
• Various activities by the stakeholders are shaping the market landscape. For instance, in March 2021, NRCan announced a collaboration with Microsoft Canada to share expertise and use the cloud, data, and artificial intelligence (A.I.) services to develop a platform for national and global scientific cooperation.

Competitive Landscape

The intensity of competitive rivalry in the market is expected to be moderately high and is expected to remain the same during the forecast period. The recent developments in the market are as follows:-

• November 2021, Dataiku, the platform for Everyday AI, announced its new AI governance and oversight as part of the company’s unified AI platform to allow organizations to scale AI initiatives and analytics under one centralized control tower.
• March 2021 - Indo-US Science and Technology Forum (IUSSTF) launched its flagship program, the US-India Artificial Intelligence Initiative. The activity will bring together key stakeholders from India and the USA to foster AI innovation by sharing ideas and experiences, identifying new opportunities in research and development, and bilateral collaboration.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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