AI in Education Market Size, Share, Growth, and Industry Analysis, By Type (Deep Learning and Machine Learning & Natural Language Processing (NLP)), By Application (Educational Institutes & Educational Publishers), and Regional Insights and Forecast to 2032

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AI IN EDUCATION MARKET OVERVIEW

The AI in Education Market size was valued at USD 2.46 billion in 2024 and is expected to reach USD 28.22 billion by 2032, growing at a compound annual growth rate (CAGR) of 35.6% from 2024 to 2032.

The market for AI in education is quickly revolutionizing the way that courses and instruction methods and delivery are conceived and delivered. AI in education has been embraced to tailor learning to suit the students’ personalities and handle laborious and time-consuming processes. The global market volume is anticipated to grow due to the rising popularity of new models of digital learning and the use of artificial intelligence in education. This revolution in education is helping deliver improved student results while also improving efficiency in institutions globally.

COVID-19 IMPACT

AI in Education Industry Had a Positive Effect Due to Remote learning during COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

That is why the COVID-19 crisis acted as a catalyst for AI implementation in the education process due to the transfer of schools and universities to online and blended learning environments. As the COVID-19 pandemic caused transitions towards remote learning, AI tools for individualized learning, virtual lessons, and tests expanded... This act brought into limelight the role of AI in enhancing continuity in education in case of lockdown since education solutions that are efficient and scalable are very vital in such scenarios. Consequently, the global AI in education market took off and created a foundation for the relatively long-term development of the market.

LATEST TREND

AI-driven adaptive learning in education fuels significant market growth

Another emerging trend in the AI in Education Market is the emergence of learning management systems incorporating adaptive learning concepts in that they deliver education customized to specific student characteristics. These platforms leverage AI to determine student data and modify content delivery in real time so as to optimize learning results. Further, technologies such as intelligent grading, virtual instructors, and most prominently intelligent student profiling are also on the rise. This move to student-centered learning is taking the whole teaching profession to another level where teaching is done more effectively. 

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AI IN EDUCATION MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Deep Learning and Machine Learning & Natural Language Processing (NLP)

• Deep Learning and Machine Learning: Deep learning and machine learning are revolutionizing AI in education by enabling systems to learn from vast amounts of data, improving personalized learning experiences. These technologies are used for content recommendations, predictive analytics, and adaptive learning platforms. As these tools become more sophisticated, they are enhancing both teaching methods and student outcomes through automated assessments and real-time feedback.

• Natural Language Processing (NLP): Natural Language Understanding in education focuses on enabling AI to process, interpret, and respond to human language in a meaningful way. NLP is used in applications such as AI chatbots, virtual tutors, and language translation tools, facilitating communication between students and educators. It also assists in grading essays, enhancing language learning, and improving accessibility for students with disabilities.

By Application

Based on Application, the global market can be categorized into Educational Institutes & Educational Publishers

• Educational Institutes: AI in educational institutes helps in providing the content and prepares the students to take up each subject and lesson as per student needs. Primarily, it helps to avoid any paper work involved in the academic evaluation process, like the grading system, timetable, student’s performance, etc. Further, educators describe how artificially intelligent avatars replace conventional teachers and virtual teaching assistants assist students with real-time learning, thereby expanding the array of learning opportunities.

• Educational Publishers: AI is assisting educational publishers in delivering customized education content in the form of smart texts, adaptive co-curricular texts, and highly engaged e-learning packages. Analyzing the obtained information, it is possible for publishers to create the content, which would be relevant and interesting for students and, therefore, stimulate their interactions with the provided materials. It is also the perfect way to develop tools such as automatic grading systems and intelligent content suggestions for learners as well as instructors.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Tailored AI education models drive market growth through enhanced learning outcomes

The need for tailor-made education is perhaps one of the key reasons that have made AI attractive to participants in the education market. It also allows for the delivery and design of new instructional models that focus on the pace and performance of each student. Thus, the application of this approach contributes to the higher level of students’ participation and learning achievement, so AI is an effective tool for both teachers and students.

Rising EdTech adoption fuels market growth through improved education quality

One way through which AI is rapidly gaining acceptance is the use of educational technology (EdTech) in institutions of learning. AI applications increase the educational services’ quality via intelligent classrooms, artificial intelligence tutors, and others’ automation. Since the number of institutions implementing the digital transformation increases daily, the need for AI-based solutions remains high and resulting AI in Education Market growth.

Restraining Factor

High costs limit AI adoption, challenging market growth in education

At present, the high cost of incorporating the AI technologies in the learning institutions is one of the major limiting factors. AI can be seen as a costly technology for education, where schools and universities, especially in developing areas, may face some problems of being capital intensive to implement the new system. This is a major financial constraint that poses a major challenge to AI, as it is an area that has not experienced an influx of adoption because of this reason.

Opportunity

AI-driven special education solutions support inclusion and boost market growth

One of the more exciting prospects for a stronger market for AI in education is the use of AI for special education. Since students with disabilities have a special need to learn, AI technologies are used for the particular learning needs of the disabled to give them speech recognition and reading machines and also to keep track of the behaviors of each disabled child. With the current increased emphasis on inclusion in institutions of learning, AI helps in providing ramps and better learning outcomes for various needs of the students. They also have the potential to harness significant growth for the market by following this trend. In the context of AI in the education market, a major issue reported is data privacy and security.

Challenge

Data privacy challenges hinder market growth in education globally

A significant challenge faced by AI in the education market is data privacy and security concerns. Collection and use of the student data in learning systems that use AI brings out the question of data privacy, security, and ethical utilization. It is also difficult and expensive to address compliance with strict legal requirements and the protection of personal data when in educational institutions. This challenge may reduce the rate of adoption of AI-enabled environments in the institution. North America is the largest AI in the education market due to having the most sophisticated technology framework and massive spending on EdTech advancements.

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AI IN EDUCATION MARKET REGIONAL INSIGHTS

• North America

North America's advanced tech and investments drive market growth

North America dominates AI in the education market due to the region's advanced technological infrastructure and significant investments in EdTech innovation. A major role is played by the United States, where key technology companies and learning institutions promote the adoption of AI decision support systems for learning management and administrative solutions. Unted State AI in the education market is aided by a strong startup culture and a pool of research funding. Each of them contributes towards placing North America as one of the most strategic regions in offering AI education.

• Europe

Data privacy challenges hinder market growth in education globally

Europe holds remarkable AI market share through digital education transformation and government support for AI in school education, Europe remains a key region for the core market. Today the focus on AI-related platforms is evident in many European countries, which use them for improving personalized learning, accessibility, and reducing administrative burden. There is also cooperation between educational institutions and creators of AI technologies for the development of innovations in the region. The European data protection culture and the focus on ethical deployment of AI create a safe and continual growth context for AI in the educational sector.

• Asia

Growing digital literacy and investments drive market growth in Asia

Asia stays representative in the AI in Education Market by boosting up digital literacy and enhancing investment in AI-based learning devices. China, Japan, and India are adding the value of AI in delivering specific lessons, online education systems, and smart classrooms. A big part of the region’s population consists of students, and there is a focus on educational advancements, making the need for customizable AI solutions rather high. Further, active governmental programs and the formation of collaborations with high-tech corporations have shifted the application of AI into educational systems, increasing at an accelerated rate in Asia.

KEY INDUSTRY PLAYERS

Tech giants drive market growth through innovative, accessible tools

Prominent industry leaders, among which are Google, Microsoft, and IBM, are having a decisive impact on the growth of AI in the education market by introducing new technologies, including learning platforms, virtual classrooms, and personalized educational tools. Their sponsorship in research, school collaborations, and the innovative design of low-cost, future-proof technologies to support students across the world make them the catalyst for trends in AI for education today.

List of Top AI in Education Companies

• Google (US)
• IBM (US)
• Pearson (UK)
• Microsoft (US)
• AWS (US)

KEY INDUSTRY DEVELOPMENT

October 2024: Pearson, a leading education company, reported a 5% increase in underlying sales for the third quarter, attributing this growth to the successful integration of AI-powered study tools within its higher education products. These AI tools, utilized by over 5 million students and incorporated into more than 90 titles during the back-to-school period, have significantly enhanced student engagement and learning outcomes. CEO Omar Abbosh highlighted the accelerating deployment of AI technology as a key driver of these commercial benefits, underscoring Pearson's commitment to leveraging AI to improve educational experiences. 

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential Applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

This research report examines the segmentation of the market by using both quantitative and qualitative methods to provide a thorough analysis that also evaluates the influence of strategic and financial perspectives on the market. Additionally, the report's regional assessments consider the dominant supply and demand forces that impact market growth. The competitive landscape is detailed meticulously, including shares of significant market competitors. The report incorporates unconventional research techniques, methodologies and key strategies tailored for the anticipated frame of time. Overall, it offers valuable and comprehensive insights into the market dynamics professionally and understandably.