Global on-device AI market tops $10bn in 2024

As the internet of things (IoT) evolves and expands, among the most recent developments is the integration of artificial intelligence (AI) capabilities directly onto IoT devices to unlock a new generation of applications. Now, a study from IoT analysts at Berg Insight has found that the on-device AI market having risen by 22% from 2023-2024.

Over the course of the lpst few years, leading technology providers have demonstrated how on-device AI is driving a number of use cases – in particular, automotive and industry 4.0 applications – with embedded AI platforms, as well as micro-power Wi-Fi silicon on chip (SoC), enabling intelligent computing.

In its study, The on-device AI market for IoT applications, Berg Insight said that it has identified 40 key companies that shape the on-device AI landscape, and it believes that the market can broadly be divided into two layers. The first encompasses hardware categories such as AI SoCs or system-on-modules (SoMs), AI accelerators and AI microcontroller units (MCUs), each optimised for different levels of performance, power efficiency and integration.

The analyst said AI SoCs typically integrate components such as general-purpose and specialised AI compute cores, on-chip memory and connectivity on a single chip, while SoMs extend this design by including external system memory, storage and interface components on a larger board, targeting more advanced use cases. AI accelerators are those designed to enhance AI inference efficiency in existing systems, typically working alongside a separate host processor in embedded applications.

AI MCUs serve lower-power devices by bringing neural network capabilities to sensors, wearables and IoT endpoints where energy efficiency and cost are most critical. The second layer consists of on-device AI platforms that combine hardware, software and developer tools to simplify model deployment and optimisation.

In all, Berg calculates that the on-device AI market reached US$ 10.1bn 2024 in a market including AI SoCs/SoMs, AI accelerators, AI MCUs and specialised on-device AI software and platforms. The analyst expects the market to grow to US$ 30.6bn in 2029, representing a compound annual growth rate (CAGR) of 25%. The figures excluded revenues generated by non-IoT applications such as smartphones, tablets and personal computers.

Berg noted that the market for on-device AI solutions is characterised by a high degree of heterogeneity in both technologies and applications, in contrast to cloud-based AI where the hardware is typically designed around predefined use cases and centralised infrastructure. It added that embedded AI processing can be architected in numerous ways depending on the end use case, and it can be integrated into an almost limitless range of devices across consumer, industrial and automotive domains.

The analyst said this leads to a differentiated market landscape, with unique design constraints, performance requirements and optimisation strategies. However, it cautioned that the overarching objective is typically the same for all suppliers, which is to achieve the highest possible performance per watt for the intended use case.

“Over the past decade, the on-device AI market has been driven primarily by traditional machine learning use cases such as computer vision and anomaly detection, which have seen steady annual growth of around the 10 percent range,” said Berg Insight IoT analyst Melvin Sorum.

“In recent years, the market has reached an inflexion point as emerging technologies and applications in generative AI, robotics and autonomous driving have opened up new dimensions of growth. These developments are expected to accelerate market growth and give rise to entirely new use cases and product categories.”