Global Generative AI in Higher Education Market By Component (Solutions and Services), By Application (Learning Platform & Virtual Facilitators, Intelligent Tutoring System (ITS), and Other ), By Deployment Mode (Cloud and On-premises), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

Global Generative AI in Higher Education Market size is expected to be worth around USD 313.4 Mn by 2032 from USD 137.7 Mn in 2022, growing at a CAGR of 8.8% during the forecast period from 2023 to 2032.

Request Covid - 19 Impact

Global generative AI is making significant progress in higher education. It offers a range of benefits which include personalized learning experiences, instant feedback, and improved outcomes. The market for generative AI is growing rapidly in higher education. Generative AI in higher education will use machine learning algorithms that can generate new data such as texts, images, or videos based on existing data. This technology is used in numerous ways such as creating personalized study materials for individuals to automating the grading processes for large classes. The ability of generative AI to provide personalized learning is a major benefit in higher education. By analyzing data from the previous performance, generative AI can identify areas in which students may be struggling. It can then generate customized study material to address these areas. The market for generative AI is expected to grow rapidly in higher education in the next few years.

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Driving Factors

Increasing Popularity of Personalized Learning Solutions

The global generative AI market in higher education is driven by several factors which include the need for personalized learning, improved outcomes, cost savings, and the increasing demand for online learning. The use of generative AI provides personalized learning experiences, real-time feedback, and automation for time-consuming tasks. This can result in cost savings for educational establishments. The COVID-19 pandemic has accelerated online learning and generative AI can make it more engaging & effective. As machine learning algorithms, natural language processing, and other technologies improve, generative AI adoption in higher education will increase resulting in more personalized & effective teaching experiences for students.

Restraining Factors

High Cost and Data Breach Risk becomes Major Restraints

The market for generative AI systems in higher education will grow in the next few years but it may face some barriers. The cost of implementing generative AI can be prohibitively high for smaller educational institutions. There are also concerns about data security & privacy since generative AI systems need access to large quantities of student data. There is also the risk that generative AI systems could replace human educators resulting in job losses & a reduction in education quality. There may also be resistance from educators and students who do not want to adopt new technology or prefer traditional teaching methods. These factors may slow down the growth of generative AI within the higher education market. However, many experts believe the benefits will outweigh these concerns.

COVID-19 Impact Analysis

The COVID-19 pandemic had a significant effect on the global market for generative AI in higher educational institutions. The demand for generative AI has increased with the closure of schools, universities, and the shift to online learning. Generative AI helps to make online learning more engaging & effective by providing personalized experiences and real-time feedback. In addition, generative AI helped automate many of those time-consuming tasks that instructors used to perform such as grading & providing feedback. This has led to significant cost savings for educational institutions that have been facing financial challenges because of the pandemic. Despite the benefits, there are also challenges which include concerns about privacy & security of data in online learning environments. The adoption of generative AI is expected to grow in the coming years owing to the demand for online education.

By Component Analysis

The Solutions Segment is Dominant

Based on components, the market for generative AI in higher education is segmented into solutions and services. Among these, the solutions segment is the most lucrative in the global generative AI in the higher education market, with a projected CAGR of 9.4%. The total revenue share of the solutions segment is 70% in 2022.  The growth of the digital/online education market has been Aided by the emergence of large numbers of smartphone users, the increased involvement of governments, the adoption of payment options, and the advancement of internet connectivity. These are the factors driving the solutions segment. The online education boom due to the pandemic is expected to drive the fastest CAGR growth in the services segment during the forecast period. The market is also driven by the increasing investment in AI-based education by both government & private organizations to advance the education sector.

By Application Analysis

Learning Platforms & Virtual Facilitators Segment are Dominant

By application, the market is further divided into Learning Platforms & Virtual Facilitators, Intelligent Tutoring Systems (ITS), Smart content, Fraud & Risk Management, and Other Applications. Learning Platforms & Virtual Facilitators are estimated to be the most lucrative segment in the global generative AI in the higher education market, with a market share of 45% and a projected CAGR of 9.6%, in 2022. The growth of the segment can be attributed to the increasing digital education technology around the world. Virtual facilitators also help students solve real-time social issues using various skills & guidance relating to social development. During the forecast period, the smart content segment will grow at the fastest CAGR (9.2%). This is because smart content has been adopted to reduce the time-consuming task of creating exercises for students & teachers.

By Deployment Mode Analysis

The Cloud Segment is Dominant

Based on deployment mode, the market is segmented into cloud and on-premises. Among these, the cloud mode is estimated to be the most lucrative segment in the global generative AI in higher education market, with a market share of 55% and a projected CAGR of 9.7%, in 2022. Cloud computing's growth can be attributed, among other things, to factors like reduced ownership costs & the growing need to share educational data across campuses. It also allows universities and schools the opportunity to upgrade their current model with advanced AI without having to reinvest in their capital costs. The growing concern over the privacy of student data & the increasing demand by educational institutions to keep essential documents on-premises are the main factors driving the growth of the segment.

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Global Generative AI in Higher Education Key Market Segments:

Based on Component

• Solutions
• Services

Based on Application

• Learning Platform & Virtual Facilitators
• Intelligent Tutoring System (ITS)
• Smart content
• Fraud and Risk Management
• Other Applications

Based on the Deployment Mode

• Cloud
• On-premises

Growth Opportunities

Cost Saving & Personalized Learnings are the Major Opportunity

In the coming years, it is expected that the global generative AI market in higher education will offer significant growth prospects. The growing demand for personalized learning is a major opportunity. Generative AI can meet this demand by analyzing large datasets & creating customized study materials and feedback for individual learners. The adoption of generative AI will also result in cost savings for educational institutions, as it automates time-consuming tasks like grading & providing feedback. The COVID-19 pandemic has accelerated the demand for online education, a growth opportunity. Generative AI can make online learning more engaging & effective by providing personalized learning experiences in online environments and real-time feedback. The ongoing technological advances in machine learning algorithms, natural language processing, and other areas are expected to improve the effectiveness & efficiency of generative AI systems. This will provide even greater growth opportunities for the future.

Latest Trends

Rising Adoption of Chatbots & Virtual Assistants are in Growing Demand

The global market for generative AI in higher educational institutions is growing rapidly. Several new trends have emerged in recent years. One trend is the increased adoption of chatbots or virtual assistants that use generative AI for personalized support & guidance. Another trend is to use generative AI in immersive learning environments such as virtual reality games and simulations which can improve engagement & retention. There is also a growing interest to use generative AI in online learning environments to create more human-like interactions & dialogues with the use of natural language processing and sentiment analyses. There is also a trend to integrate generative AI into other emerging technologies such as blockchain & the Internet of Things to create a more holistic and data-driven learning experience. These latest trends will continue to shape the future of generative AI in higher education providing more innovative and effective solutions for both students & educators.

Regional Analysis

North America is Dominant Region in Global Generative AI in Higher Education Market

North America is anticipated to be the most dominant region in the global generative AI in the higher education market with the largest market share of 35% and is projected to register a CAGR of 9.8% during the forecast period. The market in this region is driven by factors such as the presence of leading companies that develop solutions and services, the technology infrastructure facilities, and the large number of end users using educational devices to implement AI in education. The Asia-Pacific region will experience the fastest growth due to the adoption of online education & the demand for personalized learning in countries such as China and India.

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Key Regions and Countries Covered in this Report:

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Market Share & Key Players Analysis:

The competitive landscape is fragmented with several global and regional players. To expand their business footprints and survive in a highly competitive environment, key players are entering strategic collaborations, partnerships, and mergers & acquisitions. Service providers invest heavily in R&D to incorporate new technologies into their offerings & create advanced solutions to gain an advantage over other players in the market. IBM Corporation announced its acquisition of SXiQ in November 2021. SXiQ is a digital transformation service company based in Australia which specializes in cloud applications, cloud platforms, and cloud security. The acquisition will increase IBM Consulting's capability in New Zealand & Australia for modernizing technology infrastructure and cloud applications.

Market Key Players:

• Amazon Web Services, Inc.
• IBM Corporation
• Microsoft Corporation
• Cognizant
• Google LLC
• Pearson Plc
• BridgeU
• DreamBox Learning, Inc.
• Carnegie Learning, Inc.
• Other Key Players

Recent Developments:

• In July 2021 the Central Board of Secondary Education worked in association with Intel Corporation. This association Aims to introduce an AI learning platform called AI Students Community (AISC). It will also add students from CBSE & non-CBSE schools to study from Intel’s AI-certified experts.
• In February 2018, Microsoft Research Asia (MSRA)which is Microsoft's research division in the Asia Pacific region announced a three-year partnership with Pearson a leading educational publishing and assessment services company. This partnership aims to integrate AI capabilities into the English language learning curricula.

Report Scope: