; AI in Chemicals Market Size, Share, Trend, Forecast, 2034

AI in Chemicals Market

AI in Chemicals Market Size, Share, and Analysis, By Type (Hardware, Software, and Services), By Application (Discovery of New Material, Production Optimization, Pricing Optimization, Load Forecasting of Raw Materials, Product Portfolio Optimization, Feedstock Optimization, and Others), By End-User (Base Chemicals & Petrochemicals, Specialty Chemicals, and Agrochemicals), By Region (North America, Europe, Asia-Pacific, and Rest of the World), And Regional Forecast 2024-2034

Published on: May-2024
Report Code: FG ICT 01993
No. of Pages: 170-350
Report Format: PDF

AI in Chemicals Market is anticipated to exhibit a Compound Annual Growth Rate (CAGR) of 34.2% during the forecast span from 2024 to 2034. In 2023, the market size was assessed at USD 1.2 billion and is projected to reach USD 29.9 billion by the completion of 2034.

Product Overview

AI in chemicals are the integration of artificial intelligence techniques with chemical research and applications, which includes tasks such as drug discovery, materials design, reaction prediction, and process optimization. The method involves the analysis of vast chemical data to identify patterns and propose new molecules or materials with specific characteristics by using machine learning algorithms. In addition, drug development is accelerated by recreating the interaction of molecules and predicting potential drug candidates, which helps save time and money. Moreover, AI-driven automation improves chemical operations and enhances efficiency, along with sustainability. This synergy between AI and chemistry promises to transform drug development and pave the way for discoveries in the field of chemistry.

Market Highlights

AI in Chemicals Market is expected to grow at a compound annual growth rate (CAGR) of 34.2% from 2024 to 2034

AI in Chemicals Market is projected to reach USD 29.9 billion over the forecast period, driven by the growing demand for effective solutions in drug discovery and process optimization. Artificial intelligence is reshaping traditional methods in chemical research and improving the pace of discoveries by using innovations in machine learning and big data analytics. In the pharmaceutical sector, the predictive capabilities of AI in the identification of drug candidates are simplifying the procedure of drug development. Similarly, AI-driven automation is improving chemical procedures across various industries, which leads to high productivity and sustainability. As a result, the AI in chemicals market is attracting major investments from established firms and startups, that are aimed at improving AI-driven solutions in chemistry.

Source: Fatpos Global

AI in Chemicals Market Segmentation

Software segment will lead as it provides flexibility and easy integration

AI in Chemicals Market is segmented based on the Type in Hardware, Software, and Services. The software segment holds a leading position in the AI in the chemicals market as software solutions offer unparalleled flexibility and smooth integration into existing chemical research infrastructure. This adaptability addresses the needs of various users across pharmaceutical and industrial domains. Additionally, software-based AI algorithms are continuously improving with the help of machine learning and refining their capabilities. This improvement ensures accurate and effective solutions to perform tasks like drug discovery and process optimization. Therefore, the dominance of the software segment in the AI in the Chemicals market is due to its improvement mechanisms and cost-effectiveness, which makes it the preferred choice for industry stakeholders.

Specialty Chemicals segment will dominate due to its unique characteristics and popularity

AI in Chemicals Market is divided based on End-User into Base Chemicals & Petrochemicals, Specialty Chemicals, and Agrochemicals. The specialty chemicals segment is predicted to lead the AI in the chemicals market due to the distinct demands and characteristics of specialty chemicals in industries such as pharmaceuticals, automotive, and construction. These chemicals require accurate formulations and properties for specific applications, which makes them perfect for optimization through AI technologies. Moreover, the complex nature and applications of specialty chemicals present abundant opportunities for AI-driven solutions, such as predictive maintenance and regulatory compliance. Thus, the specialty chemicals segment emerges as the leader in the AI in chemicals market as it promotes innovation in industries that are dependent on specialized chemical products.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Growing Demand for Efficiency and Innovation Will Promote the Growth of AI in Chemicals

Across the chemical industry, there's a visible surge in the need for efficiency and innovation. This demand covers various sectors like pharmaceuticals, materials science, and industrial manufacturing. Additionally, companies are under intense pressure to cut costs and introduce new products. As a result, AI technologies emerge as potential solutions to tackle these challenges by simplifying operations and improving predictive capabilities. For instance, in drug discovery, AI algorithms can accurately identify potential drug candidates by sifting through large chemical data. Similarly, AI-driven simulations empower materials scientists to create novel materials that are customized for specific applications. Therefore, as industries increasingly recognize the transformative potential of AI in boosting efficiency and innovation, the demand for AI solutions in the chemical sector is expected to soar.

Improvements in AI and Big Data Analytics Will Promote the Adoption of AI in Chemicals

Continuous innovations in artificial intelligence and big data analytics are transforming the chemical industry and unlocking new capabilities. AI algorithms are driven by machine learning and deep learning techniques, due to which they are becoming more advanced and enabling accurate predictions in chemical processes. Moreover, AI models can extract invaluable insights, due to the abundance of chemical data, that were once inaccessible. For instance, AI can examine molecular structures and materials properties, which simultaneously improve the process of drug discovery and process optimization. These developments are resulting in significant improvements in efficiency and innovation across the chemical industry, thus boosting competitiveness in a rapidly evolving market landscape.

Restraints

Data Privacy and Security Concerns May Prevent Growth in the Market

Concerns surrounding data privacy and security are primary issues that are hindering the vast adoption of AI in the chemical industry. The AI in chemical industry is handling highly sensitive data, such as proprietary formulations and information regarding regulatory compliance, due to which, the risk of data breaches, unauthorized access, and misuse looms large.  In addition, regulatory requirements such as GDPR and HIPAA are imposing rigorous guidelines on data handling and privacy, which further complicates the implementation of AI solutions. Thus, to mitigate these risks, companies must invest in strong cybersecurity measures and data encryption techniques to safeguard sensitive data and ensure regulatory adherence. However, navigating this complicated ecosystem of data privacy presents a key challenge for the chemical industry, which limits the growth potential of AI adoption.

Recent Developments

  • In 2023, IBM launched IBM Watson Works with Chemical Engineering capabilities, which utilizes AI for data-driven materials discovery and optimization AI for Materials Discovery in Chemical Engineering.
  • In 2024, Microsoft is expected to release Azure Cognitive Services for Chemicals, a set of AI tools for anomaly detection and predictive maintenance in chemical plants Azure Cognitive Services for Chemicals.
  • In 2022, Google LLC launched DeepMind, a subsidiary of Alphabet, and published research on using AI for molecule generation, potentially impacting chemical manufacturing processes DeepMind AI for Molecule Generation.
  • In 2021, IBM Corporation announced the availability of IBM Maximo for Chemical, an AI-powered solution for predictive maintenance and asset management in chemical plants AI in Chemical Plants for Predictive Maintenance.
  • In 2023, Google further launched the Google Cloud Platform and announced Vertex AI for Chemicals, a suite of AI tools for process optimization and quality control in chemical production Google Cloud Platform Vertex AI for Chemicals.

AI in Chemicals Market

Key Players:

  • IBM Corporation
  • Microsoft Corporation
  • Accenture plc
  • NVIDIA Corporation
  • DeepMind Technologies
  • Cognizant Technology Solutions Corporation
  • Intel Corporation
  • Siemens AG
  • Oracle Corporation
  • Dow Chemical Company
  • Bayer AG
  • Google LLC 
  • SAS Institute Inc.
  • BASF SE
  • Merck KGaA
  • Other Prominent Players (Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis)

Regional Analysis

AI in Chemicals Market is segmented based on regional analysis into five key regions: North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. The North American region leads the AI in the chemical industry due to its strong ecosystem of technology companies and venture capital firms, that encourage innovation and collaboration in AI development. The concentration of pharmaceutical, biotechnology, and chemical companies across the region are early adopters of AI technologies for drug discovery and materials design. Moreover, supportive government policies and a skilled workforce further contribute to the leadership of the North American region in AI adoption.

Conversely, the Asia Pacific region is expected to be the fastest-growing region in the AI chemical industry due to its fast economic growth, which attracts high investment in research and development. Furthermore, government initiatives and a growing startup ecosystem are expected to accelerate AI adoption in the chemical industry across the Asia Pacific region.

Source: Fatpos Global

Impact of COVID-19 on the AI in Chemicals Market

COVID-19 pandemic has substantially impacted the AI in Chemicals market. Initially, disruptions in supply chains caused major delays in research and production activities across the chemical industry. However, as the pandemic advanced further, the importance of AI technologies became increasingly evident in addressing challenges such as vaccine and therapeutic drug discovery. Thus, there has been a high emphasis on using AI to improve agility and efficiency in the chemical sector. Also, despite initial setbacks, the pandemic accelerated the adoption of AI in chemicals and attracted massive investment in AI-driven solutions. In addition, the shift to remote work has highlighted the importance of digital transformation, which further stimulated demand for AI technologies in the chemical industry.

AI in Chemicals Market is further segmented by region into:

  • North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
  • Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
  • Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
  • Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
  • Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

AI in Chemicals Market Scope and Segments:

ATTRIBUTE

  DETAILS

Study Period

2018-2034

Base Year

2023

Forecast Period

2024-2034

Historical Period

2019-2022

Growth Rate

CAGR of 34.2% from 2024-2034

Unit

Value (USD Billion)

Segmentation

Main Segments List

By Type

  • Hardware
  • Software
  • Services

By Application

  • Discovery of New Material
  • Production Optimization
  • Pricing Optimization
  • Load Forecasting of Raw Materials
  • Product Portfolio Optimization
  • Feedstock Optimization
  • Others

By End-User

  • Base Chemicals & Petrochemicals
  • Specialty Chemicals
  • Agrochemicals

By Region

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • U.K.
    • France
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Australia
    • Southeast Asia
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of the Middle East & Africa

Frequently Asked Questions (FAQ):

AI in Chemicals Market size was valued at USD 1.2 billion in 2023 and is projected to reach the value of USD 29.9 billion in 2034, exhibiting a CAGR of 34.2% during the forecast period.

The AI in the Chemicals market refers to the application of artificial intelligence (AI) technologies within the chemical industry.

The Software segment and Specialty Chemicals segment accounted for the largest AI in Chemicals Market share.

Key players in the AI in Chemicals Market include IBM Corporation, Google LLC, Microsoft Corporation, Accenture plc, SAS Institute Inc., NVIDIA Corporation, DeepMind Technologies, Cognizant Technology Solutions Corporation, Intel Corporation, Siemens AG, Oracle Corporation, Bayer AG, BASF SE, Dow Chemical Company, Merck KGaA, and Other Players.

Growing demand for efficiency and innovation, along with improvements in AI and big data analytics are the factors driving the AI in chemicals market.

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