Natural Language Processing Market Size to Reach USD 72.6 + Billion by 2032 – Rise with Steller CAGR 16.3%
Page Contents
Market Overview
The Natural Language Processing Market is an area of artificial intelligence and computer science that explores the relationship between computers, human language, and machines. NLP involves processing natural language data (text or speech) in order to perform specific tasks like language translation, sentiment analysis, and chatbot interaction. NLP technology enables machines and humans to understand each other's languages through various methods like statistical algorithms or machine learning models.
The global natural language processing market is expected to reach USD 72.6 billion by 2032, up from the projected value of USD 16.0 billion in 2022. The compound annual growth rate for this forecast period (2023-2032) will be 16.3%.
Due to increasing customer demand for automated service solutions, the global natural language processing market is growing at an astounding rate. Businesses can now leverage machine learning and NLP techniques to analyze large amounts of unstructured data such as customer reviews or social media posts – providing valuable insight into customer behavior. NLP algorithms are even used by virtual assistants such as Siri and Alexa which have been made possible due to advances in voice recognition technology.
Given the sheer complexity of human languages, accurate NLP systems remain elusive. Computers often struggle to interpret meaning without context information due to factors like context-dependent meanings and idiomatic expressions. These issues are being researched actively as part of ongoing research initiatives. NLP systems could be enhanced through the incorporation of advanced semantic analysis techniques.
Key Takeaways
In 2021, the North American natural language processing market is estimated to be worth USD 8.2 billion.
By 2021, high-tech and telecom will account for more than 23.1% of total revenues.
By 2021, healthcare would account for 10% of the market.
In 2021, the solution segment accounted for 76% of the component revenue share.
In 2021, the on-premise segment generated 56% of the revenue share.
Also in 2021, organizational size accounted for the largest market share.
In 2021, North America held the highest revenue share at 43%.
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Regional Snapshot
North America: North America is expected to dominate the NLP industry due to its abundance of major market participants and growing adoption across various sectors such as healthcare, banking, and finance. The expansion of this market is primarily driven by growth in the United States alone.
Europe: Due to the rising demand for NLP-based applications across various industries such as automotive, retail, media, and entertainment, Europe is predicted to hold a large share of the global NLP market. Countries like UK, Germany, and France are anticipated to lead this expansion within Europe's borders.
Asia-Pacific: With the growing use of NLP applications across various industries such as healthcare, banking and finance, and e-commerce, Asia-Pacific is expected to experience considerable growth in the NLP market. Nations such as China, India, and Japan are projected to experience faster growth rates for this region.
Latin America: Latin America is expected to experience consistent growth in the NLP market due to expanding use of NLP-based applications across a range of sectors, such as healthcare and retail. Brazil and Mexico are projected to lead this expansion within Latin America.
Middle East and Africa: NLP applications are becoming more prevalent across a range of industries, such as healthcare and government, so the Middle East and Africa can expect significant growth in the NLP market. South Africa and the United Arab Emirates (UAE) are leading this region's NLP market expansion at an impressive clip.
DRIVING FACTORS
Small and Medium-Sized Companies Are Adopting Cloud-Based NLP and AI Software to Foster Market Expansion
Businesses are adopting cloud-based NLP systems to reduce time spent on data collection and processing. Data is collected via AI-powered methods like interactive speech recognition systems, chatbots, and voice search natural language processing technology – which aid in processing numerous predictive analyses about a product. By automating laborious data-gathering tasks, technological advancement in AI has revolutionized Big Data analytics and driven efficient services worldwide. To further automate enterprises around the world with AI software applications, top players are releasing such solutions.
RESTRAINING FACTORS
Data Security Issues Could Stem Industry Growth
The market's expansion is hindered by growing concerns over data security and limited enterprise interoperability of NLP-based technologies. Authorship attribution and sentiment analysis rely on this software, which forms the basis of Apple's Siri and IBM's Watson; however, these platforms are vulnerable to security issues that limit market expansion. On average, companies experience costs from malware and cybersecurity attacks of over USD 2.6 million annually; this trend is expected to slow growth in this space.
OPPORTUNITIES
Emerging and underdeveloped nations present a major market opportunity for natural language processing. With advances in internet-of-things technologies that promote increased human-machine interaction, these emerging nations could potentially become major buyers in this space. Government support with more initiatives and investments in health sector NLP development have only compounded growth within this space; high demand from buyers and investments to enhance connectivity are two reasons why market leaders in NLP innovation and investment have emerged.
CHALLENGES
Maintaining a balance between costs and technological advances should be maintained without making any modifications to the new technologies, as high costs of innovations with enhanced benefits in the NLP market could stifle growth. Software upgrades needed for simple workflow management come at an increased expense as well. As technology progresses, so too do individual skill levels and abilities of professionals who will use it. A lack of talent could hamper expansion for NLP; lack of connectivity may result in reduced workflow capacity as connectivity is an integral element in this field; concerns with natural processing language include interoperability and dependability issues.
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Key Market Segments:
Type
- Rule-Based
- Statistical
- Hybrid
Application
- Web Search
- Language Translation
- Customer Service
Key Market Players included in the report:
- Apple Incorporation
- Dolbey Systems
- Microsoft Corporation
- Verint Systems
- 3M
- IBM Incorporation
- NetBase Solutions
- SAS Institute Inc
- HP
Market Report Scope
| Report Attribute | Details |
| The market size value in 2022 | USD 16.0 Bn |
| Revenue forecast by 2032 | USD 72.6 Bn |
| Growth Rate | CAGR Of 16.3% |
| Regions Covered | North America, Europe, Asia Pacific, Latin America, and Middle East & Africa, and Rest of the World |
| Historical Years | 2017-2022 |
| Base Year | 2022 |
| Estimated Year | 2023 |
| Short-Term Projection Year | 2028 |
| Long-Term Projected Year | 2032 |
Industry Developments
- In July 2022, SAP SE acquired Askdata, a search-driven analytics company. Through this acquisition, Askdata will enable businesses to make informed decisions using AI-powered natural language searches.
- To make AI more accessible in on-premises, cloud, and edge contexts, Intel released its first open-source AI reference kits in July 2022. These kits boast improved accuracy, higher performance, and lower overall deployment costs, demonstrating to data scientists and developers how to apply AI in healthcare, manufacturing, retail, and other industries.
- In July 2022, SoundHound and LG joined forces to develop Speech AI Technology for in-vehicle infotainment systems. This collaboration is expected to open new income opportunities for OEMs.
Frequently Asked Questions
Q: What is the size of the global NLP market?
A: Natural language processing market is expected to reach USD 72.6 billion by 2032, up from the projected value of USD 16.0 billion in 2022. The CAGR for this forecast period (2023-2032) will be 16.3%.
Q: What are some key players in the NLP market?
A: Some of the key players in the global NLP market include Apple Incorporation, Dolbey Systems, Google, Microsoft Corporation, Verint Systems, 3M, IBM Incorporation, NetBase Solutions, SAS Institute Inc, and HP.
Q: What are the industries using NLP?
A: NLP is being used in various industries, such as healthcare, banking and finance, retail and e-commerce, media and entertainment, and government and defense.
Q: What are the regions witnessing significant growth in the NLP market?
A: North America, Europe, and the Asia-Pacific region are witnessing significant growth in the NLP market due to the increasing adoption of NLP-based applications in various industries.
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