Artificial Intelligence (AI) in Education Market - Share Analysis (2024–2032)

Artificial Intelligence (AI) in Education Market Synopsis:

Artificial Intelligence (AI) in Education Market Size Was Valued at USD 1.86 Billion in 2023 and is Projected to Reach USD 8.12 Billion by 2032, Growing at a CAGR of 17.8% From 2024-2032.

AI in Education refers to using Artificial Intelligence (AI) technologies to enhance teaching, learning, and administrative processes in educational settings. Education technology (edtech) in schools is becoming more mainstream. Similarly, the use of AI, a technology that enables machines to perform tasks that typically require human intelligence, is becoming more mainstream in everyday life. Bringing the two together is a natural step that can benefit students, teachers, staff, and administrators.

AI can take many shapes and forms in education. Most recently, there’s a growing interest in generative AI (GenAI) tools that can create content and complete tasks in response to naturally phrased questions. These systems can personalize content, deliver near-real-time feedback, and guide coaching and skills development. Incorporating intelligent AI technology into schools can also help teachers, staff, and administrators by automating repetitive or time-consuming tasks, freeing time to focus on enabling student success. The growing demand from the educational sector is also driving the growth of the market.

Artificial Intelligence (AI) in Education Market Growth and Trend Analysis:

AI Is Transforming Education Through Personalized Learning, Adaptive Teaching, And Immersive Technologies, Driving Engagement And Improved Outcomes

• The adoption of AI in education increased since the pandemic period. However, today, AI is revolutionizing the learning landscape, and 60% of administrators claim to use AI in their institutions. Further, 97% of the students are more likely to take courses that involve AR and VR, and over 9 in 10 educators agreed that AR and VR can boost students’ engagement in education.
• Generative AI is poised to revolutionize education by creating intelligent, adaptive learning companions that enhance the student experience. The AI Teacher offers a personalized learning path, adjusting to each student’s pace while delivering tailored lessons and instant feedback to foster better understanding. 
• The latest technology trends in education are all about the effective use of data. Gen AI products gather information on academic performance, learning styles, and students’ strong and weak sides. This helps develop teaching strategies that adapt to the personal needs of all students. Research by Knewton shows that AI content improved the test results for 62% of respondents. 
• For instance, in September 2024, Skillsoft announced several new features aimed at improving skill-building and certification processes through AI-powered enhancements. These updates are designed to streamline learning, making it more personalized and adaptable to individual needs. The platform now includes Smart Content Discovery, where an AI Assistant offers customized recommendations, instant support, and career guidance. The platform’s AI-assisted search further refines queries and suggests related topics, making it easier for learners and administrators to find relevant learning experiences and resources. This accelerates AI adoption in EdTech, attracting more users, corporate clients, and investors, ultimately driving the growth of AI in the education sector.

Data Privacy and Security Concerns Deterring the AI Adoption

• Educational platforms powered by artificial intelligence contain significant amounts of sensitive information that combines personal data with academic records and student learning habits. Renewed cyber threat activity makes these extensive data repositories target-rich for hackers. Educational institutions can reduce these risks by complying with the requirements of the General Data Protection Regulation (GDPR) which ensures data collection and processing transparency. The design of Al systems needs to balance minimum personal data collection against strong security protocols for protecting system data against compromised integrity.

Developing High-Quality Learning Content

• AI has evolved with innovations like Natural Language Processing and Machine learning technologies that allow the generation of high-quality learning content and materials. Both teachers and students can take the help of these tools to create engaging and high-quality content that facilitates an easy learning process. AI technology also helps educators develop and disseminate complicated concepts with the use of effective presentations. Generative AI tools are known to have the potential to scan through a host of websites and gather relevant information on any topic in a matter of seconds. Teachers can leverage this advantage to create a well-researched and informative article and content for students. Researchers can make excellent use of this AI opportunity in education for their research requirements, allowing them to save time and conduct extensive research. 

Artificial Intelligence (AI) in Education Market Segment Analysis:

Artificial Intelligence (AI) in Education Market is segmented based on type, application, end-users, and region

By Software Type, the Learning Management System segment is expected to dominate the market during the forecast period

• Improving technological innovations in the LMS industry is helping to redefine the global learning process at a rapid rate. The introduction of cutting-edge eLearning innovations such as 3D images, AI, Machine Learning, and Live engagements with professionals in several fields has improved the adoption rate of LMS solutions across the globe.
• For instance, In March 2024, Accenture (NYSE: ACN) agreed to acquire Udacity, a digital education pioneer with deep expertise in the development and delivery of proprietary technology courses that blend the flexibility of online learning with the benefits of human instruction. This move enhances personalized, AI-driven learning experiences, boosting LMS adoption across industries and reinforcing its market dominance during the forecast period.

By Application, the Machine Learning segment held the largest share in 2023

• This technology is widely adopted in ITS, automated assessments, and predictive analytics, enhancing both teaching efficiency and student outcomes. Educational institutions and EdTech companies are leveraging Machine Learning (ML) for tasks such as content recommendation, chatbot assistance, and performance forecasting, further expanding its scope.
• Research from PwC estimated that global GDP could be up to 14% higher in 2030 as a result of AI. This would equate to an additional $15.7 trillion, making it the biggest commercial opportunity in our global economy today. With machine learning at the forefront of AI’s development more than ever since the advent of ChatGPT, it’s likely that the technology will continue to play a pivotal role in the industry’s growth.

Artificial Intelligence (AI) in Education Market Regional Insights:

North America is Expected to Dominate the Market Over the Forecast Period

• The North American AI in education market is expected to dominate the market during the forecast period, driven by significant investments in educational technology and a focus on customized learning solutions. The rising demand for personalized learning experiences is driving educational institutions to adopt AI-powered solutions that cater to individual student needs and learning styles.
• Looking ahead, AI's role in United States classrooms is set to expand significantly. The U.S. Department of Education has already begun initiatives to create a framework for integrating AI into teaching and learning. By 2027, the global E-learning market is expected to surpass $460 billion, with AI-driven educational tools playing a central role in this growth. As AI continues to develop, it will help equip students with the skills needed for a future dominated by digital technologies, fostering a generation of learners who are prepared for the challenges of tomorrow's workforce.

• North America remains at the forefront of AI adoption with a 58% adoption rate, driven by private-sector investments and technological advancements. Europe saw the fastest growth, closing the gap with North America.
• China leads globally, showing the highest AI adoption rate (59%). Developing regions are growing but still lag, highlighting the need for more AI infrastructure and investment.
• To sum up, North America’s advanced AI adoption and its strong footprint in the EdTech industry are critical factors in driving the growth of AI in education. As AI continues to revolutionize teaching, learning, and administrative functions, North America is poised to dominate the AI education market by providing innovative solutions, establishing best practices, and driving international demand for AI-based education technologies.

Artificial Intelligence (AI) in Education Market Active Players:

• Adobe (USA)
• Alibaba Cloud (China)
• AWS (USA)
• Baidu (China)
• Carnegie Learning (USA)
• Cengage Group (USA)
• DreamBox Learning (USA)
• Duolingo (USA)
• Google (USA)
• Grammarly (USA)
• HPE (USA)
• IBM (USA)
• Knewton (USA)
• Microsoft (USA)
• OpenAI (USA)
• Other Active Players
• Quizlet (USA)
• Skillsoft (USA)
• Stride (USA)
• Udacity (USA)
• Vimeo (USA)
• Other Active Players

Key Industry Developments in the Artificial Intelligence (AI) in Education Market:

• In December 2024, A new hub launched at the Department of Education at the University of Oxford which will promote a research-informed and ethical approach to Artificial Intelligence (AI) in Education. The AI in Education at Oxford University (AIEOU) is an interdisciplinary research hub supporting the diverse needs of the global educational landscape through collaboration and knowledge exchange.
• In November 2024, Tech giant Google launched an AI-powered experimental learning tool titled “Learn About” in order to augment educational learning. This feature is built on top of Google’s LearnLM AI model, which is also applied in other company products such as Google Search using AI Overview, on Android devices using Circle to Search, and AI chatbot Gemini which uses Gems.