Artificial Intelligence (AI) in Cybersecurity Market | 2031

Report Description

The global AI in cybersecurity market size was nearly USD 16.5 Bn in 2022 and is likely to reach USD 91.8 Bn by 2031, expanding at a CAGR of 24.4% during 2023–2031. The market growth is attributed to the ­­rising demand for cloud-based security solutions and the proliferation of 5G technology.

Artificial Intelligence in cyber security is gaining popularity due to the rising cyberattacks on defense, government agencies, and high-tech companies. The AI technologies such as machine learning (ML) and natural language processing (NLP) are in vogue to secure information, detect, protect, and respond to threats. AI in cybersecurity addresses security concerns and spots various types of assaults that occur randomly.

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With a proactive mechanism, cyber-AI offers protection with detection accuracy. AI in cybersecurity analyzes system usage patterns to detect threats, and malicious activities, and predict cyber-attacks before usher in. AI is gaining strong demand for the verification of users in terms of biometrics. Key players are prioritizing machine learning algorithms to leverage the power of AI to fortify security intelligence.

The importance of AI-based cybersecurity solutions in the finance sector, the rise in privacy concerns, complexity & frequency of cyber threats are fostering market growth. AI has the ability to classify and solve cyberattack problems, which prevents unexpected risks from devouring a business. This increases the cyber security system’s performance against cyberattacks. For instance, to increase company values, companies use AI technology such as ML to reduce financial risk and improve loan underwriting.

The COVID-19 pandemic has boosted the market. The outbreak of the COVID-19 pandemic has augmented the need for state-of-art technologies, as many companies followed work-from-home policies. The rise in demand for digital services and products has constrained organizations to invest funds into deep learning algorithms and machine learning, as employees were using insecure devices and networks. For instance, during the pandemic pervasive scams related to the novel coronavirus along with impersonation of government organizations were observed. In April 2020, google LLC observed more than 17 million phishing emails on COVID-19 scams. Furthermore, the AI-powered protections blocked more than 98% of spam.

AI in Cybersecurity Market Dynamics

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Major Drivers

Increasing threats of cyberattacks are driving AI in cybersecurity market. The cyberattacks on the network, endpoints, data, defense, and other IT infrastructure have led to tremendous financial loss for organizations as well as individuals, which created the need for AI in cybersecurity. For instance, the report published by CISCO cybersecurity threat in 2021 stated that nearly 85% of organizations have one user who tries to connect to spam sites, 68% encountered crypto mining, 70% of organizations had users that served malicious browser ads, and about 51% organizations experienced ransomware-related activity.

The drastic rise in digital transaction worldwide across various domains have increased the prevalence of cybercrime. The growth in industry data leakage is propelling the market for cybersecurity services and products. Thus, enterprises need to safeguard the cyber threats for their business growth. For instance, as per Microsoft, in the year 2020, the US was the target of almost 45% of cyberattacks.

Existing Restraints

The inability of AI to stop advanced threats is expected to hinder the market. All the Artificial Intelligence algorithms are based on past experiences like how malware behaves and how it looks like. The protection against advanced threats should not rely on prior attacks or malware. This may restrain the market to a certain limit.

Emerging Opportunities

Zero-trust security model is expected to create an immense opportunity in the market. Zero-trust framework provides advanced security against external and internal threats. It authorizes and validates each connection made by the user to the software. Moreover, it allows organizations to counter cyber threats.

Scope of the AI in Cybersecurity Market Report

The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

AI in Cybersecurity Market Segment Insights

Security Segment Analysis

Based on security type, the AI in cybersecurity market is divided into application security, network security, cloud security, and endpoint security. The network security segment held 37% shares in 2021 and is expected to expand at a significant growth rate during the projection period, due to the growing prominence of artificial intelligence and machine learning. Businesses are highly leveraging cybersecurity to prevent cyber threats that occur in the company’s network. The growing need to safeguard sensitive data available in the company’s network is further likely to propel the segment.

The cloud security segment is anticipated to grow at a rapid pace in the coming years, owing to its cost effectiveness, centralized security, and reliability. It offers a unified way in the form of SaaS to secure business applications. For instance, a cloud-native SIEM named Azure Sentinel uses machine learning and artificial intelligence in OnPrem and the cloud to detect threats. It uses Office 365 logs, activity logs, and security center alerts as data sources.

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Application Segment Analysis

On the basis of application, the global market is segregated into fraud detection, data loss prevention, risk and compliance management, unified threat management, identity and access management, and threat intelligence. The fraud detection segment is projected to register a considerable CAGR during the forecast period, as AI tools, such as machine learning have become a judicious tool to detect fraudulent activities. The increasing incidence of fraud is further likely to boost the segment. For instance, in February 2022, the federal trade commission revealed that around 2.9 million fraud reports were received from consumers.

Offering Segment Analysis

Based on offering, the AI in cybersecurity market is categorized into software, services, and hardware. The services segment held about 35% of the market share in 2021 and is expected to expand at a high CAGR during the projection period, due to its ability to detect abnormal activities with a high degree of accuracy. The segment growth is further attributed to the vigorous demand for application program interfaces such as sensor data, speech & vision, and machine learning algorithms.

The software segment is anticipated to register a significant growth rate during the forecast period, due to state-of-art cybersecurity solutions and funds emphasized by industry participants in software platforms. For instance, in 2020, AMD and IBM entered into a strategic alliance to boost AI and cybersecurity offerings. This further allows both companies to build open system architecture and open-source software to augment confidential computing.

Technology segment analysis

On the basis of technology, the AI in cybersecurity market is segmented into natural language processing (NLP), machine learning, and context-aware computing. The machine learning segment held around 46.4% of the market share in 2021 and is expected to register a robust growth rate during the assessment period, owing to the rapid adoption of deep learning by end-users. Machine learning has the ability to filter email and detects threats. For instance, the products of Palo Alto Networks support a wide range of needs from endpoint protection, cloud security, and firewalls to threat detection, with solutions to anchorage inline deep learning and machine learning.

The natural language processing (NLP) segment is expected to expand at a significant pace in the coming years, owing to a rise in sentiment analysis, the popularity of text summarization, question-answering systems, standard overlaps, frameworks, as well as security infrastructure flaws. It further identifies overlaps in data and detects vulnerabilities in security infrastructure, which further fuels the segment.

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Vertical segment analysis

Based on vertical, the global market is fragmented into healthcare, government & defense, BFSI, manufacturing, automotive & transportation, enterprise, and others. The enterprise segment accounted for a key market share in 2022 and is estimated to generate a major share of the market during the projected period, due to a surge in small and midsize enterprises (SMEs). The concept of cloud computing in SMEs provides a flexible and reliable infrastructure for cybersecurity. The growing requirement to avoid online scams is further likely to propel the segment.

The BFSI segment is projected to register a considerable CAGR during the forecast period. The rise in technological innovations resulted in a drastic shift in making purchases, withdrawals to crowdfunding, payments, and applying for loans. Cybersecurity plays a crucial role in BFSI to prevent financial losses, enhance security, and limit data leaks.

The government & defense segment is expected to augment the market, owing to the growing inclination towards AI. The government & defense sector includes all kinds of data such as personally identifiable information (PII), protected health information (PHI), intellectual property, government and business information, and device information that needs to be protected. For instance, in January 2022, over 90 websites of the Ukraine government witnessed a cyberattack that damaged the computers of numerous government institutions and spread harmful software.

Regional Outlook

In terms of region, the global AI in cybersecurity market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America accounted for nearly 36.9% of the market share in 2021 and is expected to dominate the market during the projection period, owing to the increasing adoption of cybersecurity in financial institutes. America is at the forefront of technological advancements, resulting in a rapid surge in cyber incidents. Furthermore, rising adoption of network-connected devices in the region is likely to fuel the market.

The market in Asia Pacific is projected to hold a large market share in the coming years, due to the high adoption of cutting-edge technologies coupled with Internet of things (IoT) and bring your own device (BYOD). The growing awareness regarding cybersecurity among organizations and the rapid expansion of SMEs, BFSI, and the government sector are further likely to contribute to market expansion.

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