AI in smart factory infrastructure, manufacturing projected to reach $155B by 2030

The global artificial intelligence in manufacturing market is projected to surge from $34.18 billion in 2025 to $155.04 billion by 2030, representing a compound annual growth rate of 35.3%, according to a new MarketsandMarkets™ report. This explosive growth reflects manufacturers’ accelerating adoption of AI technologies for real-time data analysis, intelligent automation, and operational optimization across industries ranging from automotive to pharmaceuticals, positioning AI as a foundational technology for next-generation manufacturing capabilities.

Key market dynamics: The expansion is fueled by the integration of AI with industrial IoT platforms, edge computing, and cloud analytics, enabling responsive and scalable operations across diverse manufacturing environments.

• Advanced AI applications including machine vision, predictive maintenance, digital twins, and robotic process optimization are empowering manufacturers to detect equipment problems early and reduce unexpected downtime.
• Growing investments in smart factory infrastructure, cybersecurity, and AI model customization are accelerating deployment in both new and existing facilities.
• The shift toward energy efficiency, sustainability, and autonomous production systems is creating new use cases for AI implementation.

Hardware segment leads growth: AI-enabled hardware is expected to witness the highest growth rate during the forecast period, driven by rising deployment of intelligent edge devices and smart sensors.

• Demand is accelerating for high-performance, energy-efficient hardware capable of real-time data capture and analysis, including edge computing modules, AI processors, industrial cameras, and robotic systems.
• Hardware growth is particularly strong in high-speed, precision manufacturing industries such as electronics, automotive, semiconductors, and food & beverage.
• Rising interest in collaborative robots (cobots), AI-enabled programmable logic controllers, and industrial IoT gateways is boosting hardware demand.

Pharmaceutical sector prominence: The pharmaceutical industry holds a prominent share of the AI in manufacturing market, supported by the sector’s reliance on data-driven production and stringent regulatory compliance requirements.

• AI technologies are widely used in formulation prediction, adaptive process optimization, and in-line quality inspection to maintain good manufacturing practices (GMP) compliance.
• Machine learning algorithms help identify patterns in vast datasets from bioreactors, cleanrooms, and filling lines, supporting both product quality and yield improvements.
• The industry leverages AI for real-time environmental monitoring, automated deviation detection, and predictive maintenance in highly controlled environments.

North America dominates: The region is anticipated to record the highest market share during the forecast period, driven by early technology adoption and robust industrial infrastructure.

• The concentration of major AI technology providers, advanced manufacturing facilities, and innovation-focused enterprises in the US and Canada accelerates adoption.
• Government support for smart manufacturing initiatives and industrial AI research, including programs promoting digital twin adoption and workforce upskilling, contributes to market leadership.
• Manufacturers focus on cybersecure AI architectures and interoperable systems to protect intellectual property and ensure regulatory compliance.

Market challenges and opportunities: The report identifies key factors shaping the market’s trajectory beyond growth projections.

• Key challenge: Difficulty in managing real-time AI decision feedback loops significantly limits responsiveness and disrupts tightly synchronized production workflows.
• Major opportunity: Increasing focus on remote operations is boosting AI use for real-time optimization and coordination across multiple manufacturing sites.
• Primary driver: Rapid growth of industrial IoT and connected devices is advancing AI adoption in manufacturing environments.

Major players: Leading companies in the AI in manufacturing space include NVIDIA Corporation, IBM, Siemens, Intel Corporation, and Microsoft, representing a mix of technology giants and industrial automation specialists.