AI Model Risk Management Market Opportunities and Strategies to 2034

This report describes and explains the AI model risk management market and covers 2019-2024, termed the historic period, and 2024-2029, 2034F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global AI model risk management market reached a value of nearly $6.17 billion in 2024, having grown at a compound annual growth rate (CAGR) of 13.14% since 2019. The market is expected to grow from $6.17 billion in 2024 to $11.41 billion in 2029 at a rate of 13.09%. The market is then expected to grow at a CAGR of 12.77% from 2029 and reach $20.81 billion in 2034.

Growth in the historic period resulted from the rising demand for cloud adoption, surge in digital transactions, growing awareness of cyber security threats and growing government initiatives. Factors that negatively affected growth in the historic period was lack of skilled professionals and integration challenges with legacy systems.

Going forward, the rise in use of AI and ML models in regulated industries, expansion of internal audit and compliance functions, growing complexity of AI models and increase in model failure incidents will drive the growth. Factor that could hinder the growth of the AI model risk management market in the future include resistance to change within organizations, high cost and complexity of implementation and impact of trade war and tariff.

North America was the largest region in the AI model risk management market, accounting for 37.66% or $2.32 billion of the total in 2024. It was followed by Asia Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the AI model risk management market will be Asia Pacific and Middle East where growth will be at CAGRs of 15.74% and 14.71% respectively. These will be followed by Africa and Western Europe where the markets are expected to grow at CAGRs of 12.71% and 12.32% respectively.

The global AI model risk management market is concentrated, with large players operating in the market. The top 10 competitors in the market made up 41.97% of the total market in 2023. International Business Machines Corporation was the largest competitor with 6.94% share of the market, followed by Microsoft Corp. with 5.84%, Google LLC with 4.89%, SAS Institute with 4.73%, FICO Corp. with 3.99%, Databricks Inc. with 3.33%, MathWorks Inc. with 3.12%, DataRobot Inc. with 3.05%, Accenture plc with 3.04% and Amazon.com Inc. with 3.02%.

The AI model risk management market is segmented by component into solution and service. The solution market was the largest segment of the AI model risk management market segmented by component, accounting for 66.96% or $4.13 billion of the total in 2024. Going forward, the service segment is expected to be the fastest growing segment in the AI model risk management market segmented by component, at a CAGR of 14.15% during 2024-2029.

The AI model risk management market is segmented by deployment mode into cloud-based and on-premise. The cloud-based market was the largest segment of the AI model risk management market segmented by deployment mode, accounting for 62.57% or $3.86 billion of the total in 2024. Going forward, the cloud-based segment is expected to be the fastest growing segment in the AI model risk management market segmented by deployment mode, at a CAGR of 14.24% during 2024-2029.

The AI model risk management market is segmented by organization size into large enterprises and small and medium-sized enterprises (SMEs). The large enterprises market was the largest segment of the AI model risk management market segmented by organization size, accounting for 62.50% or $3.85 billion of the total in 2024. Going forward, the small and medium-sized enterprises (SMEs) segment is expected to be the fastest growing segment in the AI model risk management market segmented by organization size, at a CAGR of 15.01% during 2024-2029.

The AI model risk management market is segmented by application into model documentation, model governance, model monitoring and model validation. The model validation market was the largest segment of the AI model risk management market segmented by application, accounting for 32.43% or $2.0 billion of the total in 2024. Going forward, the model monitoring segment is expected to be the fastest growing segment in the AI model risk management market segmented by application, at a CAGR of 14.29% during 2024-2029.

The AI model risk management market is segmented by industry vertical into banking, financial services & insurance, healthcare, IT & telecommunications, retail e-commerce and other industry vertical. The IT & telecommunications market was the largest segment of the AI model risk management market segmented by industry vertical, accounting for 31.45% or $1.94 billion of the total in 2024. Going forward, the healthcare segment is expected to be the fastest growing segment in the AI model risk management market segmented by industry vertical, at a CAGR of 14.05% during 2024-2029.

The top opportunities in the AI model risk management market segmented by component will arise in the solution segment, which will gain $3.32 billion of global annual sales by 2029. The top opportunities in the AI model risk management market segmented by deployment mode will arise in the cloud-based segment, which will gain $3.65 billion of global annual sales by 2029. The top opportunities in the AI model risk management market segmented by organization size will arise in the large enterprises segment, which will gain $2.89 billion of global annual sales by 2029. The top opportunities in the AI model risk management market segmented by application will arise in the model validation segment, which will gain $1.72 billion of global annual sales by 2029. The top opportunities in the AI model risk management market segmented by industry vertical will arise in the IT & telecommunications segment, which will gain $1.66 billion of global annual sales by 2029. The AI model risk management market size will gain the most in the USA at $1.52 billion.

Market-trend-based strategies for the AI model risk management market include focus on developing innovative products such as digital identity to increase their market presence in the market, focus on developing innovative solutions, such as advanced artificial intelligence (AI) models, to gain a competitive edge in the market and focus on adopting a strategic partnership approach for business expansion in the market.

Player-adopted strategies in the AI model risk management market include focus on new launches to better serve the industry and to strengthen position and strengthening business capabilities through new product solutions.

To take advantage of the opportunities, the analyst recommends the AI model risk management market companies to focus on strengthening digital identity capabilities for AI agents, focus on advancing AI model capabilities to strengthen governance and compliance, focus on the fastest growing service segment to maximize market expansion, focus on the cloud-based segment to capture high-growth opportunities, focus on the SME segment to drive high-growth market penetration, expand in emerging markets, focus on forming strategic partnerships to enhance capabilities and market reach, focus on structuring value-based pricing to reflect model complexity and compliance needs, focus on targeted digital campaigns for high-value decision makers, focus on building thought leadership through industry collaboration and data-driven insights, focus on the model monitoring segment to accelerate growth and resilience and focus on the healthcare segment to capture high-growth potential.