Data Annotation Tools Market Overview and Growth by 2031

Historic Data: 2021-2022   |   Base Year: 2023   |   Forecast Period: 2024-2031

Data Annotation Tools Market Size and Forecast (2021–2031), Global and Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: Type (Text, Image, and Others); Annotation Type (Manual, Semi-Supervised, and Automatic); End-user (Automotive, Government, Healthcare, Financial Services, Retail, IT and Telecom, and Others); and Geography

  • Report Date : Aug 2025
  • Report Code : TIPRE00008379
  • Category : Technology, Media and Telecommunications
  • Status : Data Released
  • Available Report Formats : pdf-format excel-format
  • No. of Pages : 150

The data annotation tools market size is projected to reach US$ 7.92 billion by 2031 from US$ 1.58 billion in 2023. The market is expected to register a CAGR of 22.3% in 2023–2031. The emergence of advanced annotation tools, such as computer vision and natural language processing (NLP), is likely to remain a key data annotation tools market trends.

Data Annotation Tools Market Analysis

The data annotation tools market is growing at a rapid pace due to the growing adoption of AI in the healthcare industry and the increasing large volume of data generated by advanced technologies such as ML, IoT, advanced predictive analytics, AI, and robotics. The market is expanding steadily, driven by the increasing demand for self-service applications. Moreover, the increasing adoption of data annotation tools by organizations and the growing deployment of next-generation data annotation tools by industries are providing lucrative opportunities for market growth.

Data Annotation Tools Market Overview

Data annotation tools are often built utilizing a mix of data science techniques and software development. The process begins with the selection of appropriate data samples for annotation, which are subsequently labeled or annotated by either human annotators or automated algorithms. Annotations can take the form of bounding boxes, key points, polygons, or text labels, depending on the type of data being annotated. Data annotation tools are essential in artificial intelligence and machine learning projects, as they support users in the labeling and annotation of data, making it suitable for training ML algorithms. These technologies are necessary for applications such as object detection, text categorization, image segmentation, and speech recognition. Significant benefits offered by data annotation tools such as zooming, resizing, and panning increase its adoption among organizations, hence driving the market.

Customize This Report To Suit Your Requirement

You will get customization on any report - free of charge - including parts of this report, or country-level analysis, Excel Data pack, as well as avail great offers and discounts for start-ups & universities

Data Annotation Tools Market: Strategic Insights

data-annotation-tools-market
  • Get Top Key Market Trends of this report.
    This FREE sample will include data analysis, ranging from market trends to estimates and forecasts.

Data Annotation Tools Market Drivers and Opportunities

Growing Adoption of AI in the Healthcare Industry is Driving the Market

Data annotation plays an important role in improving Al applications used in the healthcare industry. In medical imaging data technology, Al-powered systems use computer vision or machine vision to identify probable injuries and patterns, allowing health practitioners to automatically write reports once the patient has been analyzed. AI is used to quickly examine a database of X-ray images, CT scans, and MRI scans for diagnoses of various injuries. Data annotation tools help Al-based systems separate data acquired from average and injured medical photographs in order to generate the final reports of the examined individuals. This increases the adoption of data annotation tools for enhancing Al applications in the healthcare industry.

Increasing Adoption of Data Annotation Tools by Organizations - An Opportunity in the Data Annotation Tools Market

The effectiveness of automated data annotation tools and the growing usage of cloud computing to annotate large datasets are creating opportunities in the market. Businesses use data annotation tools to improve accuracy and manage their staff. AI-based data annotation tools have automated capabilities, which increases its adoption among organizations for workforce management. Data annotation tools are integrated with significant workforce management features, including task assignment and productivity analytics, which measure the amount of time spent on each job or subtask.

Data annotation tools provide organizations with a comprehensive method for managing the datasets and workflow. These tools support organizations in investigating, importing, and handling the large volume of data and file formats they need to label, which is expected to create opportunities for the market during the forecast period.

Data Annotation Tools Market Report Segmentation Analysis

Key segments that contributed to the derivation of the data annotation tools market analysis are type, automation types, and end-user.

  • Based on type, the data annotation tools market is divided into text, image, and others. The text segment held a larger market share in 2023.
  • Based on annotation type, the market is divided into manual, semi-supervised, and automatic. The manual segment held a larger market share in 2023.
  • In terms of end-user, the data annotation tools market is categorized as automotive, government, healthcare, financial services, retail, IT and telecom, and others. The IT and telecom segment held a larger market share in 2023.

Data Annotation Tools Market Share Analysis by Geography

The geographic scope of the data annotation tools market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South America/South & Central America.

In terms of revenue, the North America market accounted for the largest data annotation tools market share, due to the growing popularity of data labeling tools and increasing usage of AI and machine learning technologies by enterprises. Many organizations in North America use data labeling technology to ensure high-quality data input is driving the market. Moreover, the evolution of AI and deep learning technologies is boosting the market in the region.

Data Annotation Tools Market Regional Insights

The regional trends and factors influencing the Data Annotation Tools Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Data Annotation Tools Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

data-annotation-tools-market-global-geography
  • Get the Regional Specific Data for Data Annotation Tools Market

Data Annotation Tools Market Report Scope

Report Attribute Details
Market size in 2023 US$ 1.58 Billion
Market Size by 2031 US$ 7.92 Billion
Global CAGR (2023 - 2031) 22.3%
Historical Data 2021-2022
Forecast period 2024-2031
Segments Covered By Type
  • Text
  • Image
By Annotation Type
  • Manual
  • Semi-Supervised
  • Automatic
By End-user
  • Automotive
  • Government
  • Healthcare
  • Financial Services
  • Retail
  • IT
  • Telecom
Regions and Countries Covered North America
  • US
  • Canada
  • Mexico
Europe
  • UK
  • Germany
  • France
  • Russia
  • Italy
  • Rest of Europe
Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
South and Central America
  • Brazil
  • Argentina
  • Rest of South and Central America
Middle East and Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of Middle East and Africa
Market leaders and key company profiles
  • Appen Limited
  • CloudFactory Limited
  • Cogito
  • Keylabs.ai LTD
  • Google LLC
  • Labelbox, Inc
  • LIGHTTAG
  • Tagtog Sp. z o.o.
  • ClickWorker GmbH
  • SCALE AI, INC.

  • Data Annotation Tools Market Players Density: Understanding Its Impact on Business Dynamics

    The Data Annotation Tools Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

    Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

    Major Companies operating in the Data Annotation Tools Market are:

    1. Appen Limited
    2. CloudFactory Limited
    3. Cogito
    4. Keylabs.ai LTD
    5. Google LLC
    6. Labelbox, Inc

    Disclaimer: The companies listed above are not ranked in any particular order.


    data-annotation-tools-market-cagr

    • Get the Data Annotation Tools Market top key players overview

    Data Annotation Tools Market News and Recent Developments

    The data annotation tools market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. The following is a list of developments in the market for data annotation tools and strategies:

    • In November 2023, Appen Limited, a leading provider of high-quality data for the AI lifecycle, selected Amazon Web Services (AWS) as its primary cloud for its AI solutions and innovation. The companies are expanding their relationship with a multi-year agreement as Appen develops new enterprise solutions for AI data sourcing, annotation, and model evaluation. (Source: Appen Limited, Press Release, 2023)

    Data Annotation Tools Market Report Coverage and Deliverables

    The “Data Annotation Tools Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:

    • Market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
    • Market dynamics such as drivers, restraints, and key opportunities
    • Key future trends
    • Detailed PEST/Porter’s Five Forces and SWOT analysis
    • Global and regional market analysis covering key market trends, major players, regulations, and recent market developments
    • Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments
    • Detailed company profiles

    Frequently Asked Questions

    What is the incremental growth of the global data annotation tools market during the forecast period?

    The incremental growth expected to be recorded for the global data annotation tools market during the forecast period is US$ 6.33 billion.

    Which are the key players holding the major market share of the global data annotation tools market?

    The key players holding majority shares in the global data annotation tools market are Appen Limited, CloudFactory Limited, Cogito, Keylabs.ai LTD, and Google LLC.

    What will be the market size of the global data annotation tools market by 2031?

    The global data annotation tools market is expected to reach US$ 7.92 billion by 2031.

    What are the future trends of the global data annotation tools market?

    The emergence of advanced annotation tools, such as computer vision and natural language processing (NLP), to play a significant role in the global data annotation tools market in the coming years.

    What are the driving factors impacting the global data annotation tools market?

    The growing adoption of AI in the healthcare industry and the increasing large volume of data generated by advanced technologies such as ML, IoT, advanced predictive analytics, AI, and robotics are the major factors that propel the global data annotation tools market.

    What is the estimated market size for the global data annotation tools market in 2023?

    The global data annotation tools market was estimated to be US$ 1.58 billion in 2023 and is expected to grow at a CAGR of 22.3% during the forecast period 2023 - 2031.

    Ankita Mittal
    Ankita Mittal
    Manager,
    Market Research & Consulting

    Ankita is a dynamic market research and consulting professional with over 8 years of experience across the technology, media, ICT, and electronics & semiconductor sectors. She has successfully led and delivered 100+ consulting and research assignments for global clients such as Microsoft, Oracle, NEC Corporation, SAP, KPMG, and Expeditors International. Her core competencies include market assessment, data analysis, forecasting, strategy formulation, competitive intelligence, and report writing.

    Ankita is adept at handling complete project cycles—from pre-sales proposal design and client discussions to post-sales delivery of actionable insights. She is skilled in managing cross-functional teams, structuring complex research modules, and aligning solutions with client-specific business goals. Her excellent communication, leadership, and presentation abilities have enabled her to consistently deliver value-driven outcomes in fast-paced and evolving market environments.

    • Historical Analysis (2 Years), Base Year, Forecast (7 Years) with CAGR
    • PEST and SWOT Analysis
    • Market Size Value / Volume - Global, Regional, Country
    • Industry and Competitive Landscape
    • Excel Dataset

    Testimonials

    user

    I wish to appreciate your support and the professionalism you displayed in the course of attending to my request for information regarding to infectious disease IVD market in Nigeria. I appreciate your patience, your guidance, and the fact that you were willing to offer a discount, which eventually made it possible for us to close a deal. I look forward to engaging The Insight Partners in the future, all thanks to the impression you have created in me as a result of this first encounter.

    DR CHIJIOKE ONYIA, MANAGING DIRECTOR, PineCrest Healthcare Ltd.
    user

    The Insight Partners delivered insightful, well-structured market research with strong domain expertise. Their team was professional and responsive throughout. The user-friendly website made accessing industry reports seamless. We highly recommend them for reliable, high-quality research services

    Yukihiko Adachi CEO, Deep Blue, LLC.

    Reason to Buy

    • Informed Decision-Making
    • Understanding Market Dynamics
    • Competitive Analysis
    • Customer Insights
    • Market Forecasts
    • Risk Mitigation
    • Strategic Planning
    • Investment Justification
    • Identifying Emerging Markets
    • Enhancing Marketing Strategies
    • Boosting Operational Efficiency
    • Tracking Industry Innovations
    • Aligning with Regulatory Trends
    Your Key Concerns Addressed - Question & Answer
    Can I view a sample of the report before purchasing?

    Yes! We provide a free sample of the report, which includes Report Scope (Table of Contents), report structure, and selected insights to help you assess the value of the full report. Please click on the "Download Sample" button or contact us to receive your copy.

    Is analyst support included with the purchase?

    Absolutely — analyst assistance is part of the package. You can connect with our analyst post-purchase to clarify report insights, methodology or discuss how the findings apply to your business needs.

    What are the next steps once I place an order?

    Once your order is successfully placed, you will receive a confirmation email along with your invoice.

    • For published reports: You’ll receive access to the report within 4–6 working hours via a secured email sent to your email.
    • For upcoming reports: Your order will be recorded as a pre-booking. Our team will share the estimated release date and keep you informed of any updates. As soon as the report is published, it will be delivered to your registered email.

    Can the report be tailored to suit my specific needs?

    We offer customization options to align the report with your specific objectives. Whether you need deeper insights into a particular region, industry segment, competitor analysis, or data cut, our research team can tailor the report accordingly. Please share your requirements with us, and we’ll be happy to provide a customized proposal or scope.

    In what format is the report delivered?

    The report is available in either PDF format or as an Excel dataset, depending on the license you choose.

    The PDF version provides the full analysis and visuals in a ready-to-read format. The Excel dataset includes all underlying data tables for easy manipulation and further analysis.
    Please review the license options at checkout or contact us to confirm which formats are included with your purchase.

    How secure is the payment process on your platform?

    Our payment process is fully secure and PCI-DSS compliant.

    We use trusted and encrypted payment gateways to ensure that all transactions are protected with industry-standard SSL encryption. Your payment details are never stored on our servers and are handled securely by certified third-party processors.
    You can make your purchase with confidence, knowing your personal and financial information is safe with us.

    Do you provide special pricing for buying multiple reports?

    Yes, we do offer special pricing for bulk purchases.
    If you're interested in purchasing multiple reports, we’re happy to provide a customized bundle offer or volume-based discount tailored to your needs. Please contact our sales team with the list of reports you’re considering, and we’ll share a personalized quote.

    Can I connect with your team to discuss the report before buying?

    Yes, absolutely.
    Our team is available to help you make an informed decision. Whether you have questions about the report’s scope, methodology, customization options, or which license suits you best, we’re here to assist. Please reach out to us at sales@theinsightpartners.com, and one of our representatives will get in touch promptly.

    Will I get a billing invoice upon purchase?

    Yes, a billing invoice will be automatically generated and sent to your registered email upon successful completion of your purchase.
    If you need the invoice in a specific format or require additional details (such as company name, GST, or VAT information), feel free to contact us, and we’ll be happy to assist.

    Is there support available if I can’t access my report?

    Yes, certainly.
    If you encounter any difficulties accessing or receiving your report, our support team is ready to assist you. Simply reach out to us via email or live chat with your order information, and we’ll ensure the issue is resolved quickly so you can access your report without interruption.

    Our Clients
    Sales Assistance
    US: +1-646-491-9876
    UK: +44-20-8125-4005
    Email: sales@theinsightpartners.com
    Chat with us
    DUNS Logo
    87-673-9708
    ISO Certified Logo
    ISO 9001:2015
    ISO Certified Logo