Natural Language Processing (NLP) Market size is estimated to reach USD 345.7 Billion by the end of 2035, growing at a CAGR of 28.7% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of NLP was over USD 16.74 Billion. growth of the market can be attributed to the increasing use of chatbots for assisting customer services and for advertising the business. Customer service leverages NLP tools as a first point of contact to answer simple questions related to products and features. Around 75% of Chinese marketers are keen to employ chatbots for promoting their products and businesses. In addition, nearly 54% of respondents in China believe chatbots can deliver intelligent solutions to customer complaints. In addition to this, around 62% of customers would rather utilize a customer care bot than wait for human personnel to respond to their inquiries.
In addition to these, factors that are believed to fuel the market growth of natural language processing include the rising adoption of automation and higher implementation of the multi-languages in the machines. For instance, in August 2022, Ameca, created by the UK-based corporation Engineered Arts, presented a wide range of human-like expressions. Ameca's creators have now revealed a new video in which the robot is seen demonstrating its polyglot-like abilities, speaking numerous languages including Japanese, German, Chinese, French, British, and American English. Besides this, the NLP market growth is attributed to the rising spending on AI-related technologies. In 2021, end-user spending on artificial intelligence (AI) systems in Japan was over USD 2 billion.
Growth Drivers
Challenges
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~28.7% |
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Base Year Market Size (2022) |
~ USD 16.74 Billion |
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Forecast Year Market Size (2035) |
~ USD 345.7 Billion |
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Regional Scope |
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Organization (Large Enterprise, SMEs)
The NLP market is segmented and analyzed for demand and supply by enterprise size into large enterprises, and small & medium enterprises. Out of the two sizes of enterprises, the small & medium segment is estimated to gain the largest market share in the year 2035. The growth of the segment can be attributed to the increasing adoption of digitization by small and medium businesses. According to a survey, digitization is continuously growing, with up to 70% of small firms increasing their use of digital technologies as an outcome of the pandemic across the globe. On the other hand, the growth of the segment is also attributed to a rise in the number of small size of businesses. According to the World Economic Forum, small enterprises are the foundation of the world's economy, representing 90% of all businesses, around 60-70 percent of overall employment, and 50% of the global GDP. In addition to this, there are currently approximately 400 million SMEs worldwide. They are responsible for the majority of new employment creation and account for around 99% of all firms.
Deployment (On-Premise, Cloud)
The global natural language processing market is also segmented and analyzed for demand and supply by deployment into on-premise, and cloud. Amongst these two segments, the cloud segment is expected to garner a significant share in the year 2035. The growth of the segment is primarily attributed to the higher deployment of cloud services. The exceptional circumstances imposed by the epidemic prompted the usage of the cloud. By 2020, more than 80% of company workloads will have been migrated to the cloud. On the other hand, many organizations have made considerable expenditures in updating their cloud computing infrastructures. Moreover, around 94% of all organizations globally use cloud computing in their operations. On the other hand, higher use of cloud natural language processing services is likely to augment the segment growth. A cloud NLP service is used by more than three-quarters of natural language processing (NLP) users, worldwide. Furthermore, cloud-based NLP solution provides multiple pricing options based on usage and necessity.
Our in-depth analysis of the global market includes the following segments:
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By Component |
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By Deployment |
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By Enterprise Size |
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By Processing Type |
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By Application |
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North American Market Forecast
The natural language processing market in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~36% by the end of 2035. The growth of the market can be attributed majorly to the increasing investment in AI-related technologies. Funding for artificial intelligence startups in the United States has expanded significantly in recent years, rising from a minimum of under USD 300 million in 2011 to about USD 17 billion in 2019. On the other hand, the rising use of chatbots and social media is likely to boost market growth in the region. With approximately 16,000 websites containing a chatbot, the United States is a global leader. Furthermore, the United States had approximately 300 million social media users as of 2023. That is, approximately 90% of the general public in the United States actively uses social media.
APAC Market Statistics
Asia Pacific natural language processing market is projected to be the second largest, registering a share of about ~27% by the end of 2035. This growth is attributed to the higher adoption of digitization followed by a rise in the number of smartphone users. The start of the government's Digital India plan of action, coupled with recent increases in internet penetration, resulted in the country's digital population reaching approximately 692 million active users by February 2023. Furthermore, mobile user traffic in India is the second greatest in the world. In addition to this, the number of organizations offering virtual assistant platforms is increasing, as the use of natural language processing is also expected to boost the natural language processing market growth in the region. For instance, Kore.ai, a prominent AI software vendor, has launched an enterprise-grade virtual assistant platform. This platform encompasses various conversational AI technologies including NLP, machine learning, NLU, predictive analytics, and deep learning.
Europe Market Forecast
Further, the natural language processing market in the Europe is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the rise in the number of online shoppers. According to Eurostat, the average number of e-shoppers increased by 20 percentage points (pp) from 55% in 2012 to 75% in 2022. Moreover, in 2022, the Internet users who bought or ordered products or services through the internet in the Netherlands, Denmark, and Ireland had the largest proportions of 92%, 90%, and 89%, respectively.
Author Credits: Abhishek Verma
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