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Market Structure & Evolution |
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Segmental Data Insights |
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Demand Trends |
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Competitive Landscape |
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Strategic Development |
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Future Outlook & Opportunities |
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The global explainable AI market is experiencing robust growth, with its estimated value of USD 12.7 billion in the year 2025 and USD 62.7 billion by the period 2035, registering a CAGR of 17.3% during the forecast period. The explainable AI (XAI) market is experiencing strong global expansion due to the increasing need for transparency, accountability, and trust in AI-based decision-making.

"Trust is not negotiable," IBM CEO Arvind Krishna stated. "While adoption increases, data integrity, accountability, and workforce readiness remain the pillars that safeguard explainability and fairness across mission-critical applications," he said, emphasizing the need for AI systems to be transparent and interpretable.
Organizations across a variety of sectors (like government, healthcare, and finance) are highly interested in using explainable models to comply with regulatory mandates and to demonstrate fairness in automated practices. For example, also in May, 2025, Google Cloud introduced the Explainable Model Monitoring Suite, a tool intended for helping enterprise users visualize model reasoning and developing bias detection capabilities, further marking a significant progression toward responsible AI usage.
Additionally, as AI becomes integrated into critical applications, such as fraud detection, credit scoring, and diagnostics, demand for reasoned algorithms continues to rise. For example, in August 2025, IBM Research launch a causal inference framework, a capability that increases transparency in predictive models, improving decision accuracy in the healthcare and financial risk industries.
However, challenges, such as the complexity in integrating explainable tools to existing AI systems, and the trade-offs between model performance and interpretability, are critical impediments to widespread adoption.
Opportunities are arising as providers create AI governance platforms, regulatory compliance tools, or auditing solutions for AI. There are natural language explainers, visualization interfaces, and trust frameworks evolving within the market. Combining explainability with generative AI, edge computing, and federated learning is likely to set new best practices for ethical and trustworthy AI—boosting user trust and promoting responsible innovation at a global level.


The global explainable AI market is becoming more consolidated, led by significant players, such as IBM Corporation, Google LLC, Microsoft Corporation, Fiddler AI, H2O.ai, and DataRobot with advanced AI transparency tools, interpretable machine learning frameworks, and governance-driven analytic solutions. They lead in the market by embedding explainability directly into enterprise AI workflows, which enhances trust, accountability, and compliance in sectors like finance, healthcare, and defense.
The leading companies do focus on types of innovation in explanation tools-such as IBM’s AI Explainability 360 toolkit or Fiddler AI’s Model Performance Monitoring Platform for bias detection, interpretability visualizations, and model performance. All of these contributing to responsible AI adoption and model governance.
Government and institutional support are also significant. As of March 2025, the US National Institute of Standards and Technology (NIST) incorporated interpretability and bias mitigation into their updated Framework for Risk Management of AI, resulting in large organization processes aligning on ethical standards for AI.
Additionally, leading companies are adding to their product line through end-to-end integrated explainable ML systems that drive operational excellence and compliance. In June 2025, the Microsoft Azure AI in Krell recognized new interpretable deep learning modules improved model transparency by 25% more in rationalizations of classification accuracy. This is an indication of the measurable growth of explainable AI.

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Attribute |
Detail |
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Market Size in 2025 |
USD 12.7 Bn |
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Market Forecast Value in 2035 |
USD 62.7 Bn |
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Growth Rate (CAGR) |
17.3% |
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Forecast Period |
2026 – 2035 |
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Historical Data Available for |
2021 – 2024 |
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Market Size Units |
USD Bn for Value |
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Report Format |
Electronic (PDF) + Excel |
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Regions and Countries Covered |
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North America |
Europe |
Asia Pacific |
Middle East |
Africa |
South America |
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Companies Covered |
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Segment |
Sub-segment |
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Explainable AI Market, By Component |
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Explainable AI Market, By Deployment Mode |
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Explainable AI Market, By Technology |
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Explainable AI Market, By Model Type |
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Explainable AI Market, By Enterprise Size |
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Explainable AI Market, By Function |
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Explainable AI Market, By Application |
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Explainable AI Market, By Industry Vertical |
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Table of Contents
Note* - This is just tentative list of players. While providing the report, we will cover more number of players based on their revenue and share for each geography
Our research design integrates both demand-side and supply-side analysis through a balanced combination of primary and secondary research methodologies. By utilizing both bottom-up and top-down approaches alongside rigorous data triangulation methods, we deliver robust market intelligence that supports strategic decision-making.
MarketGenics' comprehensive research design framework ensures the delivery of accurate, reliable, and actionable market intelligence. Through the integration of multiple research approaches, rigorous validation processes, and expert analysis, we provide our clients with the insights needed to make informed strategic decisions and capitalize on market opportunities.
MarketGenics leverages a dedicated industry panel of experts and a comprehensive suite of paid databases to effectively collect, consolidate, and analyze market intelligence.
Our approach has consistently proven to be reliable and effective in generating accurate market insights, identifying key industry trends, and uncovering emerging business opportunities.
Through both primary and secondary research, we capture and analyze critical company-level data such as manufacturing footprints, including technical centers, R&D facilities, sales offices, and headquarters.
Our expert panel further enhances our ability to estimate market size for specific brands based on validated field-level intelligence.
Our data mining techniques incorporate both parametric and non-parametric methods, allowing for structured data collection, sorting, processing, and cleaning.
Demand projections are derived from large-scale data sets analyzed through proprietary algorithms, culminating in robust and reliable market sizing.
The bottom-up approach builds market estimates by starting with the smallest addressable market units and systematically aggregating them to create comprehensive market size projections.
This method begins with specific, granular data points and builds upward to create the complete market landscape.
Customer Analysis → Segmental Analysis → Geographical Analysis
The top-down approach starts with the broadest possible market data and systematically narrows it down through a series of filters and assumptions to arrive at specific market segments or opportunities.
This method begins with the big picture and works downward to increasingly specific market slices.
TAM → SAM → SOM
While analysing the market, we extensively study secondary sources, directories, and databases to identify and collect information useful for this technical, market-oriented, and commercial report. Secondary sources that we utilize are not only the public sources, but it is a combination of Open Source, Associations, Paid Databases, MG Repository & Knowledgebase, and others.
We also employ the model mapping approach to estimate the product level market data through the players' product portfolio
Primary research/ interviews is vital in analyzing the market. Most of the cases involves paid primary interviews. Primary sources include primary interviews through e-mail interactions, telephonic interviews, surveys as well as face-to-face interviews with the different stakeholders across the value chain including several industry experts.
| Type of Respondents | Number of Primaries |
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| Tier 2/3 Suppliers | ~20 |
| Tier 1 Suppliers | ~25 |
| End-users | ~25 |
| Industry Expert/ Panel/ Consultant | ~30 |
| Total | ~100 |
MG Knowledgebase
• Repository of industry blog, newsletter and case studies
• Online platform covering detailed market reports, and company profiles
Multiple Regression Analysis
Time Series Analysis – Seasonal Patterns
Time Series Analysis – Trend Analysis
Expert Opinion – Expert Interviews
Multi-Scenario Development
Time Series Analysis – Moving Averages
Econometric Models
Expert Opinion – Delphi Method
Monte Carlo Simulation
Our research framework is built upon the fundamental principle of validating market intelligence from both demand and supply perspectives. This dual-sided approach ensures comprehensive market understanding and reduces the risk of single-source bias.
Demand-Side Analysis: We understand end-user/application behavior, preferences, and market needs along with the penetration of the product for specific application.
Supply-Side Analysis: We estimate overall market revenue, analyze the segmental share along with industry capacity, competitive landscape, and market structure.
Data triangulation is a validation technique that uses multiple methods, sources, or perspectives to examine the same research question, thereby increasing the credibility and reliability of research findings. In market research, triangulation serves as a quality assurance mechanism that helps identify and minimize bias, validate assumptions, and ensure accuracy in market estimates.
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