AI in Automotive Market is expected to reach US$ 172.95 Billion by 2034

Global AI in Automotive Market Forecast to 2034: Key Insights

According to our latest study on "Global AI in Automotive Market – Global and Regional Share, Trend, and Growth Opportunity Analysis – by Component, Deployment, Organization Size, and Geography," the market was valued at US$ 11.71 billion in 2025 and is expected to reach US$ 172.95 billion by 2034. The AI in automotive market is estimated to register a CAGR of 35.7% during 2026–2034.

One of the most significant AI in automotive market trends is the growing adoption of agentic AI. Agentic AI systems are designed to act autonomously, make decisions, and execute tasks with minimal human intervention. In the automotive industry, this capability is becoming increasingly valuable as vehicles evolve into intelligent, software-driven platforms. Agentic AI can plan actions, learn from real-world data, and adapt to changing driving and operational conditions. 

AI in Automotive Market

Automakers and tech companies are now using advanced systems to improve driver?assistance features, self?driving functions, maintenance alerts, and in?car personalization. These systems can watch how the vehicle is performing, manage energy use, and react quickly in situations where safety is at risk. In factories and supply chains, they also help by automating tasks like scheduling, checking product quality, and planning the movement of parts and materials. This makes the whole process faster, smoother, and more reliable.

The popularity of agentic AI is also driven by advances in machine learning, edge computing, and sensor technologies, which enable faster decision-making within vehicles. Additionally, rising consumer expectations for safer, smarter, and more responsive vehicles are accelerating adoption. As regulatory frameworks and safety validation methods mature, agentic AI is expected to play a central role in shaping the future of connected, autonomous, and intelligent mobility solutions.

Government Initiatives and Investments Supporting AI Adoption Drive Global AI in Automotive Market Growth

Government initiatives and large-scale investments are playing a critical role in accelerating the AI in automotive market growth . In January 2025, US President Donald Trump announced a major private-sector investment initiative of nearly US$ 500 billion aimed at strengthening AI infrastructure and innovation within the US. This initiative is intended to reinforce the country’s global competitiveness in AI and advanced digital technologies by encouraging collaboration between the government and leading technology organizations.

A central element of this announcement was the formation of a new joint venture called Stargate, established by OpenAI, SoftBank Group Corp., and Oracle Corporation. The venture focuses on expanding AI computing capacity, data infrastructure, and large-scale model development. By bringing together expertise in software, cloud infrastructure, and global investment, Stargate is expected to support faster commercialization and deployment of AI solutions across multiple sectors.

Several technology and consulting companies are increasing their investments in AI development. Firms such as Accenture Plc, Contents SpA, Aleph Alpha GmbH, and Mistral AI are actively funding research, talent development, and AI-driven product innovation. These investments reflect growing confidence in AI’s long-term value and its ability to transform business operations and customer experiences.

In June 2023, Accenture Plc announced a US$ 3 billion investment to accelerate the development of new AI-based solutions. This investment focuses on expanding AI capabilities, building industry-specific use cases, and supporting clients in scaling AI adoption responsibly. Such large?scale private-sector investments, combined with government-backed initiatives, are contributing to an environment that supports rapid innovation. This ecosystem lowers barriers to adoption and fuels the widespread integration of AI technologies across global industries—an impact that is expected to significantly influence the overall AI in automotive market size as automation and intelligent systems become increasingly central to vehicle development.

Global AI in Automotive Market: Segmental Overview

The market is segmented on the basis of component, organization size, and deployment. Based on component, the market is divided into hardware, software, and services. The software segment is sub-segmented into cloud-based and on-premise. In terms of organization size, the market is categorized into large enterprises and SMEs. The market is expected to witness tremendous growth in the coming years owing to the expanding industries, technological advancements, favorable government initiatives, and surging AI usage in the healthcare sector.

Based on component in AI in automotive market report, the software segment held the largest AI in automotive market share in 2025, driven by the increasing integration of AI algorithms into vehicle systems. Automotive software solutions support critical functions such as advanced driver-assistance systems (ADAS), autonomous driving, predictive maintenance, and in-vehicle infotainment. Rising demand for over-the-air updates, real-time data processing, and machine learning-based decision-making has further strengthened software adoption. Additionally, automakers are increasingly investing in AI software platforms to enhance vehicle safety, improve user experience, and enable continuous system upgrades, thereby reinforcing the dominance of the software segment in the AI in automotive market share.

Global AI in Automotive Market Analysis: Competitive Landscape and Key Developments

The global AI in automotive market report highlights factors driving market growth and the key developments of prominent players. Accenture Plc, Advanced Micro Devices Inc, Google LLC, International Business Machines Corp, Intel Corp, Microsoft Corp, NVIDIA Corp, Amazon Web Services Inc, SAP SE, and SAS Institute Inc are among the prominent players profiled in the report. Market players focus on new product launches, expansion, diversification, and acquisition strategies to capitalize on prevailing business opportunities.

• DXC Advances AI Innovation in Automotive and Manufacturing through Startup Collaboration: In September 2025, DXC Technology (NYSE: DXC)—a leading Fortune 500 global technology services provider—announced cutting-edge collaborations with Acumino, CAMB.AI, and GreenMatterAI to develop AI solutions for the automotive and manufacturing industries. The initiatives are part of DXC's long-standing partnership with STARTUP AUTOBAHN, powered by Plug and Play, a global innovation platform that facilitates collaboration between promising early-stage innovators and large enterprises in the mobility sector.

• Polestar Adopts Google Gemini AI Assistant Across Vehicle Lineup Starting 2026
  Polestar is advancing its digital strategy with a significant update to its in-car technology ecosystem, confirming that Google’s next-generation Gemini AI assistant will become a core feature across its vehicle lineup, starting with the Polestar 2. The integration, scheduled to roll out in phases in 2026, represents one of the most substantial leaps the Swedish electric vehicle manufacturer has made in enhancing driver–vehicle interaction.

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