Explainable Artificial Intelligence for Diagnostics Market Report 2025

The explainable artificial intelligence for diagnostics market size has grown exponentially in recent years. It will grow from $1.34 billion in 2024 to $1.69 billion in 2025 at a compound annual growth rate (CAGR) of 26%. Growth in the historic period was driven by the increasing prevalence of chronic and lifestyle-related diseases, rising demand for early disease detection, greater patient awareness of personalized care, growing need for accurate and efficient diagnostic solutions, and expanding use of medical imaging and pathology data.

The explainable artificial intelligence for diagnostics market size is expected to see exponential growth in the next few years. It will grow to $4.21 billion in 2029 at a compound annual growth rate (CAGR) of 25.7%. Growth in the forecast period is expected to result from rising demand for explainable and interpretable AI solutions, growing need for personalized medicine, stronger emphasis on predictive analytics, increasing regulatory support for AI-driven diagnostics, and higher demand for transparency in medical decision-making. Primary trends anticipated for the forecast period include advancements in AI algorithms for transparent predictions, integration of AI with medical imaging and genomics, development of cloud-based AI diagnostic platforms, innovations in automated pathology scoring systems, and progress in user-friendly interpretability dashboards.

The growing demand for personalized medicine is expected to fuel the expansion of the explainable artificial intelligence (AI) for diagnostics market. Personalized medicine involves customizing prevention, diagnosis, and treatment based on an individual's genetic makeup, lifestyle, and environment. As advancements in genomic data and sequencing technologies continue, treatments are becoming more targeted, effective, and tailored to individual patients. Explainable AI in diagnostics plays a crucial role in this by offering clear and interpretable insights into patient-specific data, facilitating more precise treatment decisions. For example, in February 2024, the Personalized Medicine Coalition, a U.S.-based non-profit organization, reported that the FDA approved 16 new personalized treatments for rare diseases in 2023, a significant increase from six in 2022. These treatments included cancer drugs and therapies for other diseases, highlighting the growing focus on personalized care. This surge in personalized medicine is driving demand for explainable AI in diagnostics.

Companies in the explainable AI for diagnostics market are developing advanced solutions, such as AI-driven HER2 scoring algorithms, to improve diagnostic accuracy and transparency in cancer care. The HER2 scoring algorithm is an AI-powered tool that analyzes medical images, such as breast cancer tissue samples, to assess the expression levels of the HER2 protein. It provides accurate, consistent, and interpretable results to guide diagnosis and personalized treatment decisions. For example, in July 2023, PathAI, a U.S.-based AI-powered digital pathology company, launched AIM-HER2 Breast Cancer, which offers automated, reproducible HER2 scoring. This system uses explainable AI heatmaps to highlight key tissue features, enhancing diagnostic confidence and transparency. By analyzing entire biopsy slides without requiring manual region selection, the tool streamlines pathologists’ workflows, especially for challenging cases. This AI-powered solution aims to improve accuracy and efficiency in HER2 scoring, benefiting both biopharma research and clinical labs.

In July 2025, Mindpeak GmbH, a German company specializing in AI-powered digital pathology, partnered with Techcyte Inc. to enhance automated pathology workflows. This collaboration integrates Mindpeak’s explainable AI tools into Techcyte’s Fusion platform, improving diagnostic accuracy, efficiency, and reproducibility in digital pathology. The integration aims to enhance cancer diagnostics and overall patient care by enabling scalable, AI-driven workflows across the healthcare industry. Techcyte, a U.S.-based company, offers a cloud-based AI-driven digital pathology platform that focuses on improving diagnostic results through advanced technology.

Major players in the explainable artificial intelligence for diagnostics market are Fujitsu Limited, Koninklijke Philips N.V., Tempus AI, Owkin Inc., PathAI Inc., Aidoc Medical Ltd., Viz.ai Inc., Qure.ai Technologies Private Limited, Paige.AI Inc., Digital Diagnostics Inc., Enlitic, Aignostics GmbH, Proscia Inc., Corti ApS, Fiddler AI Inc., Riverain Technologies LLC, Arthur AI Inc., InData Labs, Ibex Medical Analytics Ltd., Mindpeak GmbH, and Therapixel SAS.

North America was the largest region in the explainable artificial intelligence for diagnostics market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in explainable artificial intelligence for diagnostics report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the explainable artificial intelligence for diagnostics market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sudden escalation of U.S. tariffs and the consequent trade frictions in spring 2025 are severely impacting the healthcare sector, particularly in the supply of critical medical devices, diagnostic equipment, and pharmaceuticals. Hospitals and healthcare providers are facing higher costs for imported surgical instruments, imaging equipment, and consumables such as syringes and catheters, many of which have limited domestic alternatives. These increased costs are straining healthcare budgets, leading some providers to delay equipment upgrades or pass on expenses to patients. Additionally, tariffs on raw materials and components are disrupting the production of essential drugs and devices, causing supply chain bottlenecks. In response, the industry is diversifying sourcing strategies, boosting local manufacturing where possible, and advocating for tariff exemptions on life-saving medical products.

Explainable artificial intelligence for diagnostics is the application of AI in healthcare that delivers transparent and interpretable outputs, allowing clinicians and patients to understand how diagnostic decisions are made. Its primary goal is to improve trust, accountability, and accuracy in AI-driven medical assessments by making algorithms understandable.

The primary components of explainable artificial intelligence for diagnostics include software, hardware, and services. Software consists of programs, instructions, or data that operate computers and perform specific tasks. Deployment methods include on-premises and cloud-based solutions. Applications cover medical imaging, pathology, genomics, risk assessment, treatment recommendation, and other areas. Primary end users include hospitals, diagnostic laboratories, research institutes, clinics, and others.

The explainable artificial intelligence for diagnostics market research report is one of a series of new reports that provides explainable artificial intelligence for diagnostics market statistics, including explainable artificial intelligence for diagnostics industry global market size, regional shares, competitors with an explainable artificial intelligence for diagnostics market share, detailed explainable artificial intelligence for diagnostics market segments, market trends and opportunities, and any further data you may need to thrive in the explainable artificial intelligence for diagnostics industry. This explainable artificial intelligence for diagnostics market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The explainable artificial intelligence for diagnostics market includes revenues earned by entities by providing services such as data annotation and preparation services, cloud-based AI diagnostics-as-a-service (DaaS), AI-powered diagnostic consulting services, ongoing model monitoring, updates, and maintenance services, and patient-centric explainability reporting services. The market value includes the value of related goods sold by the service provider or included within the service offering. The explainable artificial intelligence for diagnostics market also includes sales of medical imaging devices, digital pathology scanners, molecular diagnostic analyzers, and point-of-care testing devices. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values and are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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