AI governance market size set to hit $3.5B by 2033

Surveys have shown that people overwhelmingly want privacy laws around AI

Artificial intelligence is here, whether people are ready or not. Due to the speed at which this technology is being implemented, significant trust gaps remain, specifically when it comes to privacy. In fact, surveys have found that privacy laws are viewed overwhelmingly positively, and that increased knowledge of privacy laws leads to more trust in AI.

This is why AI governance is so important: it involves the regulations, policies, and practices around the deployment, development, and usage of AI. Specifically, it focuses on societal impact, privacy, fairness, accountability, and safety. 

AI governance is becoming big business, with the market size for solutions and services in the space expected to reach $185.5 million by 2024 and then $3.5 billion by 2033, according to Dimension Market Research, with a compound annual growth rate of 39%.

In the U.S. alone the space is expected to reach $1.3 million in 2024, while North America is predicted to have a 32.9% share of revenue share in the global AI governance market. The the software segment looking to get a majority share, specifically the government and defense segment.

"The AI governance market is expected to significant growth as organizations prioritize ethical AI use, regulatory compliance, and risk management. With the increasing adoption of AI technologies across industries, the need for strong governance frameworks will rise, driving innovation and collaboration among stakeholders to ensure responsible and transparent AI deployment," Dimension Market Research wrote in its announcement. 

Companies are currently investing in technologies such as bias detection, transparency tools, and privacy protection with an aim of addressing ethical and regulatory challenges. Some of the major players in the market include IBM, Alphabet, Microsoft, Amazon Web Services, SAS Institute, and SAP SE.

For example, IBM AI Governance launched in 2022 to allow companies to develop a transparent model management process, capture model development time, metadata, post-deployment model monitoring, and customized workflows. 

Its not only private companies that are making AI governance a priority, but governments as well, specifically those in Europe and North America.

In August, the European Commission's passed the AI Act, the first-ever legal framework on artificial intelligence, to addresses the risks of AI. The Act will be fully implemented over the next two years and, in the meantime, to facilitate the transition to this new regulatory framework, the Commission launched the AI Pact, which invites AI developers from Europe, and elsewhere, to comply with the key obligations of the AI Act ahead of time. 

So far, the pledge has been signed by over 130 companies, including SAS, IBM, Adobe, IKEA, MasterCard, Open AI, Palantir, SAP, Vodafone, and Workday.

The Biden administration has also made ethics around artificial intelligence a priority: a year ago, it issued an Executive Order (EO) on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, directing action to strengthen AI safety and security, while also protecting the privacy of Americans.

Earlier this month the government came out with new guidelines for agencies when it comes to buying AI, issuing a memo called the Advancing the Responsible Acquisition of Artificial Intelligence in Government, aka M-24-18, detailing how agencies should appropriately manage risks and performance; promote a competitive marketplace; and implement structures to govern and manage their business processes related to acquiring AI.

M-24-18 builds on OMB M-24-10, issued in March 2024, which introduced government-wide binding requirements for agencies to strengthen governance, innovation, and risk management for use of AI. 

(Image source: spiceworks.com)