AI in Healthcare Market Size & Forecast: How Big Is The Industry 2025?

Artificial intelligence makes the lives of patients, doctors, and healthcare organizations easier by executing jobs that humans usually do, but in less time and at a lower cost. AI powers surgery-assisting robots in healthcare to discover novel connections between genetic codes, automate administrative work, and customize treatment alternatives.

The most recent data indicates that the worldwide AI market will be valued at about $747.91 billion in 2024. Meanwhile, the size of the AI in the healthcare market was estimated at 27.59 billion in 2024. 

Businesses need to understand the market size of AI in the healthcare sector to make an informed decision to invest in AI-powered solutions. AI development for healthcare services can help you integrate AI-powered solutions into your current systems for efficient, quick results.

In this blog, we have provided a detailed analysis of AI in the healthcare market size, the latest trends influencing the market growth, challenges, and opportunities for business.

  Generate  Key Takeaways Generating...

• With the support of technical innovations, the healthcare industry's use of AI is expected to grow significantly and reach billions of dollars in the near future.
• Around 95% of healthcare organizations are using AI in some capacity.
• Market adaptation and AI in healthcare market growth vary in different regions. Europe and North America are leading with healthcare innovation. 
• In the coming years, the growth of healthcare data will exceed 10 trillion gigabytes, according to the DATCON index.

 Understanding AI In the Healthcare Market 

AI in the healthcare market has grown exponentially in the last few years. It will increase from $18.16 billion in 2024 to $24.18 billion in 2025.

Increased funding for artificial intelligence in healthcare, the prevalence of chronic diseases, the use of AI in radiology, cost-effective drug discovery, and the growing number of financial collaborations contribute to this period's growth.

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Let's go through the basics of artificial intelligence in the healthcare market and explain why it is essential.

How is AI Used In the Healthcare Market?

Deep learning, machine learning, neural network processing, and many more algorithms are used to provide AI solutions in the healthcare sector. These technologies are the reason behind the improved research innovation. Patient diagnosis and patient care have improved with the help of these technologies.

Why is it important?

1. Better Patient Care: AI helps in individualized treatments and early disease identification.   
2. Diagnostic Innovations: Cutting-edge algorithms are used for diagnosis and imaging, producing more accurate and quicker results. 
3. Operational Efficiency: Resource management is optimized through automation and predictive analytics.

Related Read: AI Revolution in Healthcare: Transforming the Industry

AI in Healthcare Market Size and Growth Trends

AI In Healthcare Industry Size

According to a report by Towards Healthcare, the global market for generative AI in the healthcare segment is expected to reach USD 39.8 billion in 2035. At the moment, North America has the largest market share worldwide.

• Healthcare companies are opting for AI-powered medical imaging technologies on a larger scale. 
• The market is dominated by North America, which has many substantial firms.
• Due to 24/7 support systems, virtual assistants and AI chatbots are experiencing increased demand. 
• Precision medicine and healthcare delivery are revolutionized when AI is combined with complementary technologies like blockchain or robotics.

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Healthcare AI Market Size Analysis

The global artificial intelligence in the healthcare sector market is divided into four segments:

• Component
• Technology
• Applications
• Geography

Let’s explore all four segments in detail.

1. AI in healthcare Market Size by Component

The software solution component category held a notable market share because of the growing demand for AI-powered healthcare solutions.

Over time, in the healthcare industry, hardware solutions are expected to grow at a rate of 39.4%. The main reason behind the market's expansion is the use of AI-based technologies in various healthcare applications like dosage error reduction, robot-assisted surgeries, chatbots, and other clinical trials.

2. Healthcare Artificial Intelligence Market Size by Technology

The machine learning technology segment held the largest share with USD 19.3 billion in 2023. The technology is extensively integrated into healthcare systems to generate data-driven decisions and provide insightful information derived from large data sets.

Machine learning is widely being used for various operations in healthcare systems. Machine learning models can evaluate, estimate, and identify diseases early. ML algorithms can suggest personalized treatment plans by studying the data patterns.

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The natural language processing technology market is anticipated to expand at substantial market growth between 2024 and 2030. Medical transcription, coding, and charting are examples of clinical documentation procedures that can be automated and optimized using natural language processing.

By automatically collecting and classifying information from clinical data, natural language processing speeds up documentation workflows, lessens administrative load, and guarantees billing and payment accuracy.

3. Analysis of the AI in Healthcare Market Size By Application

The three main areas leading the way for AI applications in healthcare are connected machines, assisted surgeries, and clinical trials. Diagnostics, error reduction, and cybersecurity are progressing slower. 

Robots with AI capabilities improve the accuracy of surgical procedures. AI robotics can provide the utmost precision for intricate neurology or cardiovascular surgery. AI systems are also altering clinical trial procedures.
Every stage of clinical trials benefits from the ability to analyze patient health data quickly, which increases accuracy, cost-effectiveness, and focus on patient care.

Furthermore, AI is essential to using connected machines in the medical field. AI combines sensor and Internet of Things data into a unified healthcare system. Large volumes of data can be collected, shared, and analyzed.

3. Geographical Breakdown Of The AI In Healthcare Market Size

North America

North America dominates the AI in healthcare market size with a 45% revenue share in 2023. The government provides excellent support to healthcare providers and the healthcare sector in the United States. Future application of AI solutions is made possible by the public and private healthcare sectors' early adoption of AI technologies.

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The growing number of chronic diseases, the need to cut healthcare spending, the increased investment in AI-based startups, and the increasing integration of cutting-edge technology into healthcare systems are some of the significant healthcare market growth factors driving the North American region's extensive use of big data and deep learning in healthcare.

Europe

Europe is the AI healthcare market's second-largest region. Germany, UK, France, Spain, Ireland, Switzerland, and Belgium are important countries in the healthcare sector. They are concentrating on biotechnology, drug discovery, and research and development.

In Europe, highly developed public healthcare systems use AI solutions to increase patient care and productivity.

Asia-Pacific

The Asia-Pacific area is anticipated to grow the fastest in the coming years. High technological advancement and strong regulatory frameworks are advantages of developed markets, whereas rising healthcare digitalization in emerging economies offers enormous unrealized potential.

Local tech companies frequently collaborate with multinational corporations to customize AI solutions for regional healthcare needs.

AI in Healthcare Market Forecast and Latest Trends

AI is all set to ace the global healthcare industry with its powerful solutions. The healthcare provider needs to gear up for AI in healthcare market trends in 2025.
We have witnessed the power of AI in previous years.

Likewise, AI will continue to transform the healthcare industry in the upcoming year with advancements in technology. Better patient outcomes, accurate diagnostics, patient data monitoring, and drug discovery are the main AI trends in the healthcare market.

1. Precise Diagnostics of Diseases

Artificial intelligence is enhancing the field of diagnostics in the healthcare market. It not only helps in the accurate diagnosis of the disease but also simplifies workflows, such as remote patient monitoring and analyzing patient data. The global AI in diagnosis market size is projected to be around USD 1.77 billion in 2025.

2. Enhancing Precision in Medical Imaging

The current AI in medical imaging market size is calculated at 1.67 billion in 2025, and it will reach around USD 14.46 billion by 2034 at a market growth rate of 27.10% from 2025 to 2034.

AI in CT imaging uses convolutional neural networks to enhance image quality. This approach is trained to improve image reconstruction by identifying and reducing noises without harming specific anatomical structures. It can help reduce radiation doses.

Related Read - Early Disease Detection through AI in Medical Imaging

3. Early Disease Detection

AI is being used for early disease detection with the help of different IoT devices and wearables. Gen AI can analyze patient-reported symptoms and data from wearable devices. By studying the patterns in the analyzed data, Gen AI can indicate early disease detection.

4. Easier Ultrasound Measurements

Ultrasounds have emerged as an essential tool in cardiac disease treatment. Echo quantification has become faster and more accurate with the help of AI-powered automatic ultrasound measurements. Automatic measurements provide precise patient data and accurate diagnostic decisions by eliminating the fluctuations involved in manual tasks.

5. Remote Patient Monitoring

Cloud-based AI is utilized to detect irregularities in the heart rhythm and atrial fibrillation early by monitoring the remote electrocardiogram readings. This proactive monitoring trend is improving patient outcomes.

6. Customized Treatment Plans

Gen AI examines patient data such as medical history, genetic data, and lifestyle to create a customized treatment plan. This process effectively ensures the treatment of patients' unique medical requirements, reducing the risk of unwanted effects. 

7. Cancer Research and Treatment

AI in the healthcare market is being used to increase understanding of the spread, development, and metastasis of cancer. With the help of AI in the healthcare market, cancer detection is becoming more accurate and dependable.

Artificial intelligence is being used to generate new cancer treatments using data analysis and drug discovery. AI technology has the power to speed up treatment decisions for patients by assisting in the genetic subtyping of brain tumor tissue after surgery.

8. Drug Discovery

AI is improving drug development and discovery in the pharmaceutical sector while facilitating healthcare professionals with the availability of new treatments. AI in the drug discovery market size is projected to reach 6.93 billion in 2025 and is forecasted to hit around USD 16.52 billion by 2034. 

Traditional approaches for drug development are expensive and time-consuming. They may take billions of dollars and years to reach the preclinical stage. Conversely, AI can reduce the expenses and time period for research.

By 2025, generative AI methods will systematically discover approximately 30% more new medications and materials than now. Given the potential to cut costs and time in drug research, generative AI is a promising technology for the healthcare sector.

9. Chatbots and Virtual Assistants

The shortage of skilled medical staff increases the burden of excessive duties on the existing staff. This results in errors and poor employee performance and can negatively impact patient care. AI in healthcare is there for rescue; AI chatbots and assistants can automate tasks and improve patient outcomes.

 AI-powered virtual chatbots and virtual assistants are very helpful for patients. These bots can respond to patient queries. These AI solutions have seen an increased demand due to the 24/7 access and trustworthy answers they provide.

This technology can communicate with patients efficiently in a human-like way and can transfer conversations to other channels if required. AI-powered assistants can reduce the staff workload. The healthcare chatbot market size is expected to reach USD 1.49 billion in 2025.

Challenges for AI in the Healthcare Sector

Healthcare providers are effectively using AI for various purposes. It includes early disease diagnosis, medical imaging, streamlining operations, and data monitoring. However, despite all the benefits, AI for the healthcare sector has major challenges. Let's discuss them further.

1. Lack of Quality Data

AI in the healthcare industry encounters the challenge of insufficient data. AI systems need a lot of accurate data to perform tasks like predictions and recommendations. The AI system will not work efficiently with the availability of poor-quality data to train algorithms.  

2. Research Methods Issues

The number of peer-reviewed studies and established techniques on AI in the healthcare market is insufficient. Most of the research and study is based on old medical data.

It is important to use prospective research over time to incorporate the benefits of AI into the healthcare industry fully.

3. Data Security and Privacy Concerns

Data security is a great challenge for AI in healthcare companies. Healthcare providers are most likely to encounter cyberattacks because they have vast amounts of sensitive patient data.

To overcome security concerns, healthcare companies can discuss strategic AI planning and implementation with a software development company to develop a secure and reliable AI-powered tool.

Factors Affecting AI In Healthcare Market Trends

Various factors are affecting AI trends in the healthcare market. Some of them are listed below.

1. Healthcare Data Explosion

The explosion of healthcare data will soon surpass 10 trillion gigabytes, according to the DATCON index. AI algorithms can help handle this data and operations and provide valuable insight. 

2. Population Ageing

As individuals live longer, they need more medical care and treatment. AI-powered technologies have the potential to improve people's lives and treatments. 

3. AI Integrated Software

Introducing AI-integrated software enables programs to learn from large datasets and make decisions. This software can perform different tasks, such as disease diagnosis and medical image analysis, more effectively and accurately. 

4. Rising Chronic Diseases

The rapidly growing numbers of chronic diseases such as heart disease, diabetes, and cancers are putting a strain on the whole healthcare system for better preventative and treatment strategies. 

5. Investments and Funding For the Healthcare Market

The government and many other organizations are investing in AI for the healthcare industry to provide better care at lower healthcare costs. Investors are funding AI for different operations that can speed up the process of disease diagnosis and improve treatment. 

6. Innovation In Services and Products

AI in the healthcare market is experiencing a significant rise due to the growing need for AI-powered solutions. A massive increase in the launch of new services and products can be seen in the future.

Upgrade Operational Efficiency With Our AI-Powered Solutions

The size of AI in the healthcare market is expanding quickly. It offers many opportunities for healthcare companies, developers, and investors. Everyone can make strategic decisions for their businesses depending on the various factors such as the AI in healthcare market size, challenges, opportunities, and applications in different healthcare sectors.

Whether you want to enhance efficiency in disease diagnosis, individualized patient care, or data-driven decision-making, our AI-powered healthcare solutions offer the efficiency, flexibility, and optimization you want. 

Our AI-powered solutions will not only simplify healthcare operations but also enhance patient care. With the help of a custom AI solution at Signity, you can get the best solutions for your healthcare organization. Contact us today and book a consultation.