Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Artificial Intelligence (AI) in Medical Diagnostics Market size was over USD 3.1 billion in 2024 and is estimated to reach USD 29 billion by the end of 2037, expanding at a CAGR of 26.1% during the forecast timeline, i.e., 2025-2037. In 2025, the industry size of artificial intelligence (AI) in medical diagnostics is assessed at USD 3.8 billion.
The amplifying burden of chronic disorders is pushing healthcare systems worldwide to accommodate faster and more accurate diagnoses, fueling demand for artificial intelligence (AI) in medical diagnostics market. According to the WHO, 74.1% of the mortalities around the globe originated from non-communicable diseases (NCDs). Similarly, the Robert Koch Institute reported that Germany alone consisted of a 12.5 million cardiovascular disease (CVD) population in 2025, displaying a 22.3% rise from 2018. This demography testifies to the growing need for next-generation diagnostic methods and tools, such as AI-powered solutions, to enable early intervention for better outcomes.
The artificial intelligence (AI) in medical diagnostics market often presents notable economic pressure for payers, following recent trends in payers' pricing. Demonstrating the same, in 2023, the U.S. Bureau of Labor Statistics (BLS) recorded a 4.3% year-over-year (YoY) rise in the producer price index (PPI) for medical diagnostic equipment. Further, a similar upward flow, with a 3.9% increase, was highlighted by another key indicator, the consumer price index (CPI), for diagnostic services. Moreover, the heightening cost and resistance to AI implementation, particularly in resource-constrained regions, is limiting optimum reach and adoption in this sector. However, the collective efforts from governing bodies and authorized insurers to increase public access to advanced diagnostics are minimizing this disparity.
Artificial intelligence (AI) in Medical Diagnostics Sector: Growth Drivers and Challenges
Growth Drivers
- Magnifying government support and investments: The escalating adoption in the artificial intelligence (AI) in medical diagnostics market is highly attributable to the trend of digitalization and modernization in the healthcare industry. The proactive participation of governing bodies from across the globe, particularly in emerging economies, is fueling this cohort with steady capital engagement. In this regard, in 2023, the U.S. Medicare spent approximately USD 1.3 billion on AI-powered assessments. Moreover, the regulatory frameworks are also promoting the wide adoption of advanced technologies in mainstream workflow, based on the improvement of efficiency and patient outcomes.
- Financial and clinical benefits of AI integration: As more pieces of evidence are cultivated through studies and trials, the validation of offerings from the artificial intelligence (AI) in medical diagnostics market solidifies. For instance, in 2022, the Agency for Healthcare Research and Quality (AHRQ) published a study, revealing an 18.2% reduction in the need for hospital admissions for diabetic retinopathy due to using AI-diagnostics. Further, it was also found to save more than USD 2.2 billion over 2 years. Besides, such an advanced form of chest X-ray analysis decreased the rate of misdiagnosis by 27.4% in U.S. emergency departments. Moreover, the clinical proof of minimizing upfront costs increased adoption, even among smaller clinics.
Historical Patient Growth Analysis: Foundation for Future AI Diagnostics Market Expansion
The notable transition in the volume of the patient population around the globe within the timeline from 2010 to 2020 highlighted the need for scalable solutions, particularly during emergency outbreaks. This created a sustainable consumer base for the artificial intelligence (AI) in medical diagnostics market. In addition, the data procured from the study on this historic demography helped to analyze and predict the characteristics of the present and future growth trajectories. Besides, the impact of comorbidities, including aging, obesity, and a sedentary lifestyle, also underscored the importance of early detection, which subsequently dragged the focus on accessibility of advanced medical solutions, fostering a strong foundation for this sector.
Historical Patient Growth Data (2010–2020)
|
Country |
2010 Patients (Million) |
2020 Patients (Million) |
CAGR (2010–2020) |
Key Driver |
|
U.S. |
0.9 |
12.2 |
31.6% |
FDA approvals, Medicare coverage |
|
Germany |
0.4 |
4.8 |
29.0% |
EU MDR compliance, aging population |
|
France |
0.3 |
3.6 |
27.4% |
National AI Health Strategy |
|
Spain |
0.2 |
2.3 |
25.9% |
Telemedicine adoption |
|
Australia |
0.06 |
1.5 |
24.2% |
Private insurer partnerships |
|
Japan |
0.5 |
7.0 |
29.8% |
Geriatric care demand |
|
India |
0.03 |
3.2 |
58.5% |
Portable AI diagnostics |
|
China |
0.2 |
8.6 |
52.4% |
Govt. AI investment, rural healthcare |
Feasible Expansion Models Shaping the AI Diagnostics Market
The significance of region-specific strategies is internationally recognized by the adoption and success gained by key players in the artificial intelligence (AI) in medical diagnostics market. Their understanding of the current and possible dynamics crafted a suitable guideline for new entrants and investors to attain maximum profit from this sector. For instance, the 12.4% revenue hike from the partnership between AI pioneers and telemedicine platforms in India between 2022 and 2024 opened a new pathway for outstretching commercialization up to underserved areas. Similarly, leaders in Germany showcased the potential of federated learning in reducing data compliance costs by 15.2%, creating an option to bring affordability to this field.
Feasibility Models for Market Expansion
|
Region |
Strategy |
Revenue Impact (2020–2024) |
Key Driver |
|
U.S. |
Medicare reimbursement integration |
+9.1% YoY |
CMS coverage expansion (CMS.gov) |
|
India |
Telemedicine partnerships |
+12.4% (2022–2024) |
WHO Digital Health Initiative |
|
Germany |
Federated learning compliance |
-15.2% data costs |
EU AI Act (EU Commission) |
|
China |
Govt.-subsidized AI clinics |
+18.1% (2023–2025) |
NHC AI Diagnostics Plan |
|
Japan |
Geriatric AI diagnostics focus |
+11.1% YoY |
MHLW Aging Society Policy |
Challenge
- Resistive tendency toward automation: Despite offering a wide range of advantages, including better accuracy and scalability, many legacy medical service providers and physicians refrain from adopting commodities from the artificial intelligence (AI) in medical diagnostics market. The trust issue further escalates to patients, which may slow the expansion of the consumer base in this sector. For instance, in 2023, a survey conducted by the American Medical Association revealed that around 40.2% of U.S. doctors lack faith in AI diagnostics. However, the government and private initiatives to train and teach selected healthcare professionals have shown promising improvement in combating this skepticism.
Artificial intelligence (AI) in Medical Diagnostics Market: Key Insights
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
26.1% |
|
Base Year Market Size (2024) |
USD 3.1 billion |
|
Forecast Year Market Size (2037) |
USD 29 billion |
|
Regional Scope |
|
Artificial intelligence (AI) in Medical Diagnostics Segmentation
Component (Software, Hardware, Services)
In terms of components, the software segment is expected to show dominance in the artificial intelligence (AI) in medical diagnostics market with a share of 62.1% over the assessed period. Having better scalability and cost-efficiency compared to services and hardware, AI-as-a-Service (AIaaS) models have become the most preferred choice in this sector. This leadership can further be testified by the 40.3% YoY growth in the adoption of cloud-based pathology in 2024, as per the WHO Digital Health Report. Moreover, the expedited surge in flexible and value-based diagnostic solutions is democratizing access to advanced medical services, which is propelling cash inflow in this sector.
Application (Radiology, Cardiology, Pathology, Oncology, Neurology)
Based on applications, the radiology segment is poised to garner the largest revenue share of 38.3% in the artificial intelligence (AI) in medical diagnostics market throughout the assessed timeframe. The complexity of conducting diagnoses and analyzing outputs from this discipline requires a solution with higher scalability and specificity, where commodities from this sector fit perfectly. In addition, the wide use of radiology tools in various clinical evaluations, such as cancer, musculoskeletal deformities, and cardiovascular events, ensures a greater revenue generation from this segment. Moreover, the regulatory support toward deploying streamlined workflow for radiology assessments is solidifying its leadership.
Our in-depth analysis of the global artificial intelligence (AI) in medical diagnostics market includes the following segments:
|
Component |
|
|
Application |
|
|
End user |
|
Vishnu Nair
Head - Global Business DevelopmentCustomize this report to your requirements — connect with our consultant for personalized insights and options.
Artificial intelligence (AI) in Medical Diagnostics Industry - Regional Synopsis
North America Market Analysis
North America is predicted to dominate the global artificial intelligence (AI) in medical diagnostics market by capturing 38.4% by the end of 2037. Its proprietorship is highly pledged to the growing population of cancer-afflicted patients and ongoing advancements in oncology. In this regard, the CDC reported that the heightening occurrence of malignancies across the region is escalating the expansion of AI-powered oncology diagnostics by 35.1% YoY. Furthermore, the well-established healthcare infrastructure, the presence of internationally recognized AI pioneers, constant regulatory support, and enhanced reimbursement coverage are accumulatively amplifying growth in the North America landscape.
The projections display the dominance of the U.S. over the regional artificial intelligence (AI) in medical diagnostics market by 2037, generating a USD 12.5 billion revenue. This can be testified by the expansions in Medicare and Medicaid Services, which offered a collective overage of up to USD 5.2 billion till 2024. Private insurers are also extending their territory in this sector, offering 70.4% coverage in 2025, as per the calculations from the American Medical Association. Moreover, the Federal investment of USD 2.2 billion in the AIM-HI program also accelerated the adoption of this merchandise.
Canada is also augmenting a prosperous future for the key players in the artificial intelligence (AI) in medical diagnostics market. The frequent investments and initiatives from the Federal government and health associations are enabling a steady capital influx. For instance, Health Canada allocated USD 3.3 billion in this category. Simultaneously, telemedicine-integrated AI solutions drove adoption by 40.2% in rural regions. On the other hand, the USD 200.4 million AI cancer screening initiative by PHAC also propelled the country's contribution to this sector.
APAC Market Statistics
The Asia Pacific artificial intelligence (AI) in medical diagnostics market is anticipated to exhibit the highest CAGR over the discussed tenure. Its pace of propagation is accelerated with rapid aging, digitalization, and modernization. Particularly, the proactive governments in emerging economies, such as China and India, are participating in this transformation, fueling adoption in this sector. For instance, in 2024, the wide user base of the telemedicine industry in India, totaling 500.3 million, is fostering a lucrative flow of business in this landscape by creating a surge in scalable solutions. This is further attracting both domestic and foreign AI pioneers to invest.
China dominates the regional artificial intelligence (AI) in medical diagnostics market with regulatory support and the enlarging medical device industry. For instance, in 2025, the NMPA accelerated AI/ML approvals, and a USD 8.2 billion fund in AI healthcare collectively propelled the country's augmentation in this sector. Additionally, in 2023, approximately 1.6 million patients in China were diagnosed with AI, showcasing rapid clinical integration. On the other hand, breakthroughs, such as AI-powered CT scans, cut TB detection time by 50.3%, highlighting greater penetration of the sector with improved affordability.
Besides Japan, South Korea is also strengthening its technological edge to lead the regional artificial intelligence (AI) in medical diagnostics market. The landscape of innovation in this country is fueled by several public and private initiatives. For instance, in 2024, the national MedTech AI fund totaled USD 2.1 billion, according to a report from the Ministry of Food and Drug Safety. On the other hand, the commencement of the AI Act mandated AI deployment in 30.4% of hospitals in South Korea by 2030, ensuring widespread integration with diagnostic tools.
Companies Dominating the Artificial intelligence (AI) in Medical Diagnostics Landscape
- IBM Watson Health
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Google Health (DeepMind)
- Siemens Healthineers
- GE Healthcare
- Philips Healthcare
- Medtronic
- Zebra Medical Vision
- Qure.ai
- Samsung Healthcare
- NVIDIA Healthcare
- Microsoft Healthcare
- Butterfly Network
- Tempus Labs
- Arterys
- Lunit Inc.
- BioMind
- InferVision
- Aidence
The artificial intelligence (AI) in medical diagnostics market features intense competency among tech giants and specialized healthcare firms, such as IBM Watson Health and Google Health. Individual leaders are opting for indifferent strategies to advance their existing pipelines and commercial territories. Following the same pathway, Qure.ai and Lunit Inc. are establishing a strong foundation for AI in cancer detection by delivering more accurate and faster outcomes. Simultaneously, Siemens Healthineers and GE Healthcare are more focused on developing dedicated solutions for radiology. Moreover, their alignment with the shift toward precision medicine and automated diagnostics consolidates their leadership in the upcoming years.
Recent Developments
- In March 2024, GE Healthcare launched MyBreastAI Suite, an AI-powered breast cancer detection platform designed to enhance mammography systems and improve early diagnosis accuracy. The company also shared that, early trials in U.S. and European hospitals demonstrated a 15.4% increase in diagnostic efficiency.
- In January 2024, Siemens Healthineers launched its AI-Powered CT Stroke Detector, an advanced imaging tool that automates stroke diagnosis, slashing detection time from 30 minutes to under 5 minutes. Early-adopting hospitals reported a 20.1% reduction in stroke treatment delays, significantly improving patient outcomes.
- Report ID: 3731
- Published Date: Jun 10, 2025
- Report Format: PDF, PPT
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