Artificial Intelligence in Medical Diagnostics Market: Growth, Size, Share, and Trends

Market Growth Outlook Summary

The global artificial intelligence in medical diagnostics market growth forecasted to transform from USD 1.3 billion in 2023 to USD 3.7 billion by 2028, driven by a CAGR of 23.2%. Growth in this market is driven by influx of big data, increasing cross-industry partnerships & collaborations, rising government initiatives to drive AI-based technologies, availability of funding for AI-based startups. However, inadequate AI workforce and ambiguous regulatory guidelines for medical software are factors expected to restrain the market growth.

Key Takeaways:

• Driver: Growing demand for AI-based solutions to alleviate work pressure on radiologists.
• Restraint: Insufficient AI workforce and unclear regulatory guidelines for medical software.
• Challenge: Reluctance to adopt AI-based technologies.
• Opportunity: Potential in untapped emerging markets.
• Software Segment Dominance: The software segment held the largest share of the global AI in medical diagnostics industry.
• Hospital Segment Dominance: Hospitals were the largest end-user segment in the AI in medical diagnostics industry.
• Regional Dominance: North America led the global AI in medical diagnostics industry in 2022.

Global AI in medical diagnostics Market Trend

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AI in Medical Diagnostics Market Dynamics

Driver: Increasing demand for AI-based solutions to reduce work pressure on radiologists

Over the years, the demand for AI-based solutions has increased considerably in the diagnostics industry as these solutions have immense potential in medical image diagnosis. Some advantages include faster analysis of diagnostic images, efficient interpretation of the smallest possible data often missed by radiologists, and improved imaged triage and clinical decision support.  Radiologists use these solutions to shift their focus from interpreting images to providing better care. According to a study by the Association of American Medical Colleges, the shortage of radiologists could increase to nearly 42,000 by 2033. The US has as few as 100 radiologists per million population. Considering this, radiologists experience tremendous pressure and workload to interpret unlimited diagnostic data.

Restraint: Inadequate AI workforce and ambiguous regulatory guidelines for medical software

AI is a complex system, and companies need a workforce with certain skill sets for developing, managing, and implementing AI systems. For instance, personnel dealing with AI systems should be informed of technologies such as cognitive computing, ML and machine intelligence, deep learning, and image recognition. Additionally, integrating AI solutions into existing systems needs extensive data processing for replicating human brain behavior. Even a small error can result in system failure or negatively affect the desired result. Moreover, the lack of professional standards and certifications in AI/ML technologies is restraining the growth of AI in healthcare.

Challenge: Hesitancy to adopt AI-based technologies

Extensive growth in digital health has allowed healthcare providers to support patients through novel treatment approaches. AI technologies provide doctors tools that facilitate them diagnose and essentially treat patients better. However, there is an observed hesitancy among doctors for the acceptance of new technologies. For instance, medical practitioners have a false impression that AI will replace doctors in the coming years. Doctors and radiologists trust that skills such as empathy and persuasion are human skills; thus, technologies cannot wholly rule out the presence of a doctor. In addition, there is a worry that patients may be greatly inclined toward these technologies and may forgo required in-person treatments, which might also challenge long-term doctor-patient relationships. Several healthcare professionals have doubts about AI’s capabilities in precisely diagnosing patient conditions. Therefore, proving providers that AI-based solutions are cost-effective, efficient, and reliable solutions that provide doctors ease and better patient care is challenging. However, healthcare providers are gradually accepting the likely benefits of AI-based solutions. Hence, there is a probability that in the coming years, doctors and radiologists will be more inclined toward AI-based technologies in healthcare.

Opportunity: Untapped emerging markets

Emerging markets such as India, China, and Brazil are anticipated to provide substantial growth opportunities for players operating in the AI in medical diagnostics market. This can be due to the expanding patient population in these countries. In India, as per National Institute of Health and Family Welfare, it is estimated that there are 2 to 2.5 million cancer patients at any given point; every year, about 0.7 million new cases are reported in the country. Moreover, the healthcare sectors in emerging economies, such as India and China, are rapidly expanding with the introduction of new medical technologies with a particular focus on progressed imaging equipment. All these factors, coupled with the growing population in these countries, are anticipated to increase the medical imaging data volumes in their respective healthcare systems. This gives an untapped development opportunity for AI-based solutions in emerging countries.

Based on component, software segment accounted for the largest share of the global AI in medical diagnostics industry

Based on component, the AI in medical diagnostics market is bifurcated into software, services, and hardware. The software segment accounted for the largest share of the global AI in medical diagnostics Market in 2022. The large share of this segment is attributed to as the software solutions help healthcare providers a competitive edge over others, despite the challenges of being short-staffed and challenging increasing imaging scan volumes.

Based on end user ,the hospitals segment accounted for the largest share of the AI in medical diagnostics industry

Based on end users, the AI in medical diagnostics market is bifurcated into hospitals, diagnostic imaging centers, diagnostic laboratories, and other end users. The hospitals segment accounted for the largest share of the global AI in medical diagnostics Market in 2022. Factors such as growing  inclination of hospitals toward the automation and digitization of radiology patient workflow, and growing adoption of minimally invasive procedures in hospitals and healthcare facilities to advance the quality of patient care and focus on patient centric care.

Based on region , North America accounted for the largest share of the global AI in medical diagnostics industry in 2022

In 2022, North America accounted for the largest market share of AI in medical diagnostics market. Factors such as the shortfall of radiologists, the increasing prevalence of chronic diseases, improved research on the ethical implementation of AI in diagnostic tools, and increased funding for research are the key factors driving the growth of this regional market.

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Some of the prominent players in this market are Microsoft (US), NVIDIA Corporation (US), Merative (US), Intel Corporation (US), Google (US), Siemens Healthineers (Germany), GE HealthCare (US), Digital Diagnostics Inc. (US), Advanced Micro Devices, Inc. (US), InformAI (US), HeartFlow, Inc. (US), Enlitic, Inc. (US), icometrix (Belgium), Aidence (Netherlands), Butterfly Network, Inc. (US), Nano-X Imaging LTD. (Israel), Viz.ai, Inc (US), Quibim (Spain), Qure.ai (India), Therapixel (France), Aidoc (US), Koninklijke Philips N.V. (Netherlands), Lunit, Inc. (South Korea), EchoNous, Inc. (US), and Brainomix (UK).

Scope of the AI in Medical Diagnostics Industry:

The study categorizes the AI in medical diagnostics market to forecast revenue and analyze trends in each of the following submarkets:

By Component

• Software
• Services
• Hardware
  • Processors
    • MPU
    • GPU
    • FPGA
    • ASIC
  • Memory
  • Networks
    • Adapters
    • Switches
    • Interconnects

By Application

• In Vivo diagnostics
  • By Specialty
    • Radiology
    • Cardiology
    • Neurology
    • Obstetrics/gynecology
    • Ophthalmology
    • Other specialties
  • By Modality
    • Computed tomography
    • X- Ray
    • Magnetic resonance imaging
    • Ultrasound
    • Other modalities
  • In Vitro diagnostics

By End User

• Hospitals
• Diagnostics Imaging Centers
• Diagnostics Laboratories
• Other End User

By Region

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe (RoE)
• Asia Pacific
  • Japan
  • China
  • India
  • Rest of APAC (RoAPAC)
• Latin America
• Middle East & Africa

Recent Developments of AI in Medical Diagnostics Industry

• In September 2023, Mayo Clinic (US) and GE HealthCare (US) collaborated on research and product development programs to better equip clinicians and help diagnose and treat medical conditions.
• In January 2023, Intel Corporation (US) launched 4th Gen Intel Xeon Scalable processors (code-named Sapphire Rapids), the Intel Xeon CPU Max Series (code-named Sapphire Rapids HBM) and the Intel Data Center GPU Max Series (code-named Ponte Vecchio), delivering a leap in data center performance, efficiency, security and new capabilities for AI, the cloud, the network and edge, and the world’s most powerful supercomputers.
• In October 2022, Google Cloud (US) launched Medical Imaging Suite, a new industry solution that makes imaging healthcare data more accessible, interoperable, and useful. Google Cloud enables the development of AI for imaging to support faster, more precise diagnosis of images, increased productivity for healthcare workers, and improved care access and patient outcomes.
• In January 2022, Siemens Healthineers (Germany) and Ohio State Wexner Medical Center (US) partnered to provide cutting-edge imaging and treatment technology to Ohio State patient care, research institutions, and the surrounding regions. The alliance offers cutting-edge radiation oncology and advanced imaging modalities on the Outpatient Care West Campus.

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