July 25, 2024
Natural Language

Natural Language Processing Market is in trends by surging adoption of AI assistants

NLP allows machines to read, understand, and derive meaning from human language in a smart and intuitive manner. It forms the backbone of various AI assistants such as Amazon’s Alexa, Apple’s Siri, Google Assistant and Microsoft’s Cortana. These intelligent virtual assistants have revolutionized the way humans interact with technology through natural conversations. NLP enables AI assistants to comprehend user queries, offer personalized responses, perform tasks and provide a seamless dialogue experience for humans. The growing popularity of messaging platforms, smart home devices, virtual agents and other AI-enabled applications is propelling the demand for NLP.

The Global Natural Language Processing Market is estimated to be valued at US$ 23122.23 Bn in 2024 and is expected to exhibit a CAGR of 19% over the forecast period from 2024 to 2031.

Key Takeaways

Key players
Key players operating in the natural language processing are Walmart, Costco Wholesale Corporation, The Kroger Co., Walgreens Boots Alliance Inc., TESCO PLC, Amazon.com Inc., METRO, Home Depot Product Authority LLC. , Target Brands Inc., Best Buy, Intert IKEA Systems B.V, Carrefour SA, eBay Inc. These players are investing heavily in R&D to integrate advanced NLP capabilities in their AI and machine learning platforms.

Growing demand
The burgeoning AI industry and widespread deployment of AI assistants across multiple devices are the main factors driving the demand for NLP solutions. Furthermore, NLP is also witnessing increased adoption in various verticals such as healthcare, BSFI, transportation and e-commerce to enhance customer experience through conversational interfaces.

Global expansion
North America currently dominates the global NLP market. However, the Asia Pacific region is presenting lucrative growth opportunities for NLP vendors due to the rising investments in AI technologies by key economies like China, India and Japan. Major players are expanding their presence in developing nations to tap the massive growth potential offered by Asia’s growing digital economies.

Market key trends
One of the key trends in the Natural Language Processing Market Size is the shift from rule-based to neural network models. Earlier NLP systems relied on handcrafted rules and features defined by humans. However, recent years have witnessed a paradigm shift towards deep learning models that can learn patterns from massive amounts of text data on their own. Neural network models such as RNNs, CNNs, transformers etc. have significantly improved the state-of-the-art for various NLP tasks. These models have empowered applications with more contextual understanding, human-like conversational capabilities. Going forward, self-supervised learning and transfer learning will further help advance neural NLP systems.

Porter’s Analysis

Threat of new entrants: Low costs of entry to the market due barriers to acquire necessary technology to develop NLP systems. However, existing players have established networks, resources and customer base.

Bargaining power of buyers: Buyers have high bargaining power due to availability of substitutes and less switching costs. They can negotiate on price and demand additional services.

Bargaining power of suppliers: Suppliers have moderate power given the specialized skillsets and technology required in NLP domain. However, growing demand keeps their power in check.

Threat of new substitutes: Threat is moderate as other analytic techniques can be used instead of NLP for various tasks. However, NLP provides unique advantages that are difficult to substitute.

Competitive rivalry: Intense as major tech giants compete to provide comprehensive NLP solutions and many startups offer niche capabilities. Players differentiate based on performance, ease of use and customization.

Geographical regions with market concentration:

North America accounts for the largest share currently due to advanced economies, focus on innovation and presence of major players. Europe and Asia Pacific also have significant shares and are growing.

Fastest growing region: Asia Pacific region is expected to grow at the fastest pace due to increasing investment in AI adoption by governments and businesses, rising internet penetration, growing tech-savvy population and developing economies. China, India and other Southeast Asian countries will be key drivers.

*Note:
1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it