Explainable AI Market Size, Share & Trends Analysis Report By Component, By Deployment, By Application (Fraud & Anomaly Detection, Drug Discovery & Diagnostics, Predictive Maintenance), By End-use, By Region, And Segment Forecast, 2023 - 2030

Explainable AI Market Growth & Trends

The global explainable AI market size is anticipated to reach USD 21.06 billion by 2030, registering a CAGR of 18.0% from 2023 to 2030, according to a new report by Grand View Research, Inc. Explainable AI refers to the development of artificial intelligence (AI) systems that can provide understandable and transparent explanations for their decision-making processes. While AI models have achieved remarkable performance in various domains, their inherent complexity often makes it challenging to understand why and how they arrive at particular conclusions or predictions. Explainable AI aims to bridge this gap and enhance trust, accountability, and interpretability in AI systems. It is closely tied to broader growth and advancements in technology. As technology continues to evolve and improve, explainable AI enables the development and implementation of more sophisticated and transparent AI systems.

The exponential growth in computing power, driven by advancements in hardware and parallel processing, has facilitated the training and deployment of complex AI models. High-performance computing resources likesupercomputers and high-performance clusters enable the exploration of larger and more interpretable models, as well as the efficient analysis of their decision-making processes. Moreover, advancements in NLP have enabled the development of conversational interfaces and chatbot systems that can provide explanations in human-readable formats. NLP techniques, such as text generation and sentiment analysis, contribute to the development of intuitive and understandable explanations for AI decisions. These significant developments in technologies are fueling the explainable AI industry’s growth.

The growing interest in explainable AI has led to the emergence of startups likeAlation,EXPAI, and Fiddler Labs focused on developing and commercializing explainability solutions. Venture capital firms and angel investors are actively investing in these startups to support their research, development, and market adoption. Startups often receive funding to refine their explainability algorithms, build user-friendly interfaces, and create scalable products for various industries.

Explainable AI Market Report Highlights

• The service segment is expected to register the highest CAGR of 20.9% during the forecast period, attributed to the prominent growth of companies specializing in explainable AI and providing consulting and advisory to organizations seeking to make their AI systems more transparent and interpretable. For instance, Iflexion, a software development and XAI service provider, offers consulting services and software services in XAI to their customers
• Fraud and anomaly detection led the global revenue share, accounting for over 23% in 2022. This growth is attributed to transparency in fraud and anomaly detection models with explainable AI, allowing users to understand how decisions are made. Traditional black-box models may produce accurate predictions, but they lack interpretability
• Major launches and innovations are augmenting the automation tool segment. For instance, IBM's AI Explainability 360 toolkit provides a set of open-source algorithms and tools for explaining the outputs of machine learning models. It includes methods for generating rule-based explanations, feature importance analysis, and other interpretability techniques.

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