AI governance aims to guide the development and application of artificial intelligence by aligning it with human values and priorities through oversight and transparency. As AI application expands into critical decision-making domains like healthcare, education, and criminal justice, the need for governing its use to ensure model compliance, fairness and accountability is growing exponentially. AI models need proper governance mechanisms to address issues like unintended algorithmic bias, data provenance validation, and restricting high-risk applications.

The global AI Governance Market is estimated to be valued at US$ 193.37 Mn in 2023 and is expected to exhibit a CAGR of 46.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity:

The opportunity to address model compliance and fairness issues is projected to drive substantial growth of the AI governance market over the forecast period. With AI increasingly influencing important decisions in people's lives, lack of adequate oversight on models can harm human well-being and societal values. Establishing governance frameworks to audit models for bias, scrutinize data sources and eliminate discrimination will be critical for responsible development of AI. Regulators across countries are also bringing new regulations around model accountability and transparency, necessitating advancement of AI governance solutions.

Porter's Analysis

Threat of new entrants: The AI governance market requires significant investment in R&D and has scale economies, making it difficult for new players to enter the market.

Bargaining power of buyers: Buyers have moderate power in this market due to the specialized and unique nature of AI governance solutions.

Bargaining power of suppliers: Suppliers have low bargaining power due to the availability of substitute components and inputs.

Threat of new substitutes: Substitutes are emerging but none provide the comprehensive oversight and control on AI systems.

Competitive rivalry: Intense as key players compete on the basis of product offerings and pricing.

SWOT Analysis

Strength: Established technology leadership and strong R&D capabilities among key players. Growing demand for AI oversight and risk mitigation.

Weakness: Lack of common standards make it difficult for organizations to determine the right solution. High costs of implementation and skilled workforce shortage.

Opportunity: Increasing spend on AI governance among industries like healthcare, automotive, and banking. Rising concerns around algorithmic bias and model integrity.

Threats: Competition from open-source and in-house developed solutions. Regulatory uncertainty around global AI governance laws.

Key Takeaways

The Global AI Governance Market Size is expected to witness high growth over the forecast period driven by the growing complexity of AI systems and the need for accountability and oversight. North America currently dominates the market due to extensive research activities and presence of leading technology companies in the US and Canada. The Asia Pacific region is expected to grow at the fastest pace led by increasing investments from Chinese and Indian companies in developing responsible AI technologies.

Key players operating in the AI Governance market are Facebook, Inc. (Meta Platforms Inc), IBM Corporation, Integrate.ai Inc., Google LLC (Alphabet Inc.), H2O.ai, Inc., SAP SE, SAS Institute Inc., Microsoft Corporation, Pymetrics Inc., FICO Inc., and Salesforce.com, Inc. These companies have been focused on developing explainable and transparent AI that adhere to quality, privacy, and fairness principles through model monitoring and control solutions.
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