AI in Cosmetics Formulation Market Report 2026

The artificial intelligence (AI) in cosmetics formulation market size has grown exponentially in recent years. It will grow from $0.58 billion in 2025 to $0.71 billion in 2026 at a compound annual growth rate (CAGR) of 22.5%. The growth in the historic period can be attributed to increasing demand for personalized beauty products, growing use of data-driven formulation methods, rising adoption of artificial intelligence (AI)-based ingredient analysis, expanding focus on clean and safe formulations, and growing need for faster product development cycles.

The artificial intelligence (AI) in cosmetics formulation market size is expected to see exponential growth in the next few years. It will grow to $1.6 billion in 2030 at a compound annual growth rate (CAGR) of 22.3%. The growth in the forecast period can be attributed to increasing integration of artificial intelligence (AI) in research and development (R&D) workflows, growing demand for hyper-personalized cosmetic solutions, rising adoption of predictive formulation tools, expansion of digital twins in formulation design, and growing investment in artificial intelligence (AI)-enabled ingredient optimization. Major trends in the forecast period include technology advancements in artificial intelligence (AI)-powered formulation engines, continuous innovations in ingredient prediction models, developments in virtual testing and simulation tools, rising research and developments in smart cosmetic materials, and advancements in automated formulation platforms.

The growing demand for personalized skincare is expected to drive the growth of the artificial intelligence (AI) in cosmetics formulation market in the coming years. Personalized skincare involves customized solutions tailored to an individual’s unique skin type, concerns, genetics, lifestyle, and environmental factors. This demand is increasing as advanced skin analysis technologies, including AI-based diagnostics, enable consumers to receive products specifically designed for their skin needs. AI-powered cosmetics formulation supports personalized skincare by leveraging detailed skin and lifestyle data to develop or recommend custom products that more accurately address individual requirements and enhance skincare outcomes. For example, in September 2024, a report by Harris Williams, a US-based investment bank, indicated that over 89% of consumers surveyed were maintaining or increasing their spending compared to 2023, up slightly from approximately 86% the previous year. Hence, the rising demand for personalized skincare is fueling the growth of the AI in cosmetics formulation market.

Major companies in the artificial intelligence (AI) in cosmetics formulation market are focusing on AI-driven ingredient optimization systems, such as AI-powered personal care formulation discovery tools, to streamline product development, improve ingredient performance, and deliver highly personalized skincare solutions more efficiently. AI-powered personal care formulation discovery tools are intelligent platforms that leverage artificial intelligence to design or recommend optimal cosmetic formulations based on detailed ingredient and skin analysis. For example, in April 2025, Nouryon, a Netherlands-based specialty chemicals company, launched BeautyCreations, an AI-driven digital portal for personal care formulators, at in-cosmetics Global in Amsterdam. Powered by AI from Albert Invent and trained specifically on personal care chemistry, the tool allows users to input natural language queries describing formulation needs or desired product claims, quickly retrieving relevant hair and skincare recipes from Nouryon's extensive database while ensuring intellectual property compliance. Formulators can use these vetted starting formulations to innovate faster, simplifying access to Nouryon's ingredient expertise and positioning the company as a leader in AI-enhanced R&D collaboration within the cosmetics industry.

In June 2024, The Estée Lauder Companies Inc., a US-based cosmetics company, acquired DECIEM Beauty Group Inc. for an undisclosed amount. Through this acquisition, The Estée Lauder Companies Inc. aims to strengthen its skincare portfolio and engage younger consumers by leveraging DECIEM’s innovative approach for global growth. DECIEM Beauty Group Inc., a US-based beauty company, employs artificial intelligence (AI) to enhance operations, including product development, personalization, and customer experience.

Major companies operating in the artificial intelligence (AI) in cosmetics formulation market are BASF SE, Unilever PLC, Perfect Corp., L’Oréal S.A., Evonik Industries AG, Beiersdorf AG, Givaudan SA, Shiseido Company Limited, Nouryon Chemicals Holding B.V., Symrise AG, Amorepacific Corporation, Ashland Global Holdings Inc., Avon Products Inc., The Estée Lauder Companies Inc., TECHNIA AB, PROVEN Skincare, Revieve Inc., LipoTrue S.L., Dermala Inc., Haut.AI.

North America was the largest region in the artificial intelligence (AI) in cosmetics formulation market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence (AI) in cosmetics formulation market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the artificial intelligence (AI) in cosmetics formulation market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, 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.

Tariffs have impacted the artificial intelligence in cosmetics formulation market by increasing costs for imported smart lab equipment, automated ingredient dispensers, and specialized formulation analytics hardware. These effects are more visible in hardware-intensive segments and in regions reliant on cross-border equipment sourcing, particularly Asia-Pacific and Europe. Higher costs can slow adoption among small and mid-sized cosmetic manufacturers, while software-centric solutions remain less affected. On the positive side, tariffs are encouraging localized manufacturing, regional sourcing of lab equipment, and greater emphasis on cloud-based and software-driven AI formulation tools.

Artificial intelligence (AI) in cosmetics formulation refers to the application of AI to design, test, and optimize cosmetic products with increased speed and accuracy. It analyzes large datasets on ingredients, skin types, and performance outcomes to develop safer and more effective formulations. This approach enables cosmetic brands to reduce development time, minimize trial-and-error, and bring innovative products to market more quickly.

The main components of artificial intelligence (AI) in cosmetics formulation are software and services. AI-driven software in cosmetics formulation comprises digital tools and platforms that allow brands to design, test, and optimize products more efficiently using intelligent algorithms. These systems assess ingredient interactions, predict product stability, and recommend optimal formulations. They can be deployed via cloud-based or on-premises models and leverage advanced technologies such as machine learning, deep learning, computer vision, natural language processing, predictive analytics, generative AI, and cloud-based AI. Key applications include product development, ingredient analysis, personalized formulations, quality control, and other related uses, serving end-users such as cosmetic manufacturers, contract manufacturers, research institutes, and other industry participants.

The artificial intelligence (AI) in cosmetics formulation market consists of revenues earned by entities by providing services such as quality assurance, regulatory support, integration services, and maintenance services. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (ai) in cosmetics formulation market includes sales of automated ingredient dispensers, formulation analytics hardware, and smart lab equipment. 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 that 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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