Global Natural Language Processing (NLP) Forecast Trends - Market Size, Share, Growth Analysis Report (2024-2032)

Natural Language Processing (NLP) Market Growth

Cloud Computing, Smart Devices, and Voice-Based Solutions Aiding the Natural Language Processing (NLP) Market Growth

Natural language processing (NLP) is a branch of computer science and artificial intelligence. It is derived from various subjects, such as computational linguistics and computer science, in its search to know the difference between computer understanding and human communication. NLP is likely to be used in various ways like prescriptive analytics, predictive analytics, and intelligence voice support systems, which is expected to fuel the natural language processing (NLP) demand growth across the globe.

The surging adoption of cloud computing is projected to boost the global natural language processing (NLP) market in the forecast period. The growing utilisation of smart devices like mobile phones, industrial devices installed in a plant, or devices operating in the home/building environment are propelling the market growth. With growing technological advancements in IoT and communication along with digital transformation, the market is likely to bolster in the upcoming years. The escalating demand for voice-based solutions interfaces and the NLP-based applications offer consumers improved functionalities. These functionalities include verbal command capability and instant query management, which are expected to aid the market growth.

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Key Trends and Recent Developments

Easy implementation, low cost, and increasing use in end-use industries to shape the natural language processing (NLP) market dynamics and trends. 

May 2023

One AI Inc. was launched from stealth mode with a funding of USD 8 million to assist businesses in integrating natural language processing capabilities into their applications. 

Easy NLP Implementation

It is easy to implement NLP with the surging need for text analytics and speech analytics. This is likely to add to the expansion of the market and become a key trend of the natural language processing (NLP) market.

Cost Effectiveness

Employing NLP is less expensive than hiring an employee because a machine can complete any task more quickly than the employee. This is expected to increase the growth opportunities for the market.

Use of NLP in Various Industries

The growing consumption of NLP in end-user industries and the increasing investment in the healthcare industry is likely to provide further impetus to the natural language processing (NLP) market opportunities.

Natural Language Processing (NLP) Market Trends

Increasing Demand for NLP in Healthcare Segment to Augment the Market Growth

The increasing number of virtual assistants handling tasks in the healthcare industry, like registration of patients and scheduling appointments, are expected to boost the healthcare sector in the natural language processing (NLP) industry growth.

The IP and telecom segment in the NLP market indicates the capability of machines to cooperate with humans by employing natural language that is very particular to this field. The segment has supported the department of artificial intelligence in its various forms creating the path for NLP-based tools that were later consumed by other industries.

Industry Outlook

Rising Adoption of Technology in the Banking Sector and an Expanding Manufacturing Sector Aid the Market Growth.

In November 2023, private banking accounted for 27% of the sales of banking technology. Risk Management systems hold a share of 20%, which means that technologies that manage financial risk are of utmost importance. At this place, NLP acts really crucially; it basically facilitates real-time data analysis with pattern recognition, an important constituent in terms of forecasting and limiting financial risks.

Wholesale banking and lending account for 13% each. Integration of NLP into these aspects is quite crucial for personalised customer interaction and seamless digital banking services. NLP enhances customer support through chatbots and voice recognition systems becoming integral to digital banking platforms. Payments, CRM, Digital Banking, and Universal Banking have the share of each at 7%. It thus provides support for both personalised financial advisories, advanced payment processing, and insight-driven customer relationship management in these fields. Generally speaking, the increase in the usage of NLP technologies in various banking systems indicates that the industry is moving toward a trend of leveraging AI for better operational efficiency and improved customer engagement. The industrial goods sector shows very positive growth: with an estimated global sale of $9.073 billion in 2019, it is expected to increase to $15.757 billion by 2030, which is a compound annual growth rate of 7.4% from 2019 to 2030. China is on track to grow from $4.030 billion in 2019 to $8.226 billion in 2030. Uch factors lead to new trends in the natural language processing (NLP) market.

Western Europe follows with a significant compound annual growth rate of 2.0% from 2019 to 2030. Meanwhile, more modest increases in output are expected in the NAFTA regions, at a growth rate of 3.3% from 2019 to 2030. The Rest of Asia Pacific and the rest of the world continue with consistent growth patterns, with the Rest of Asia Pacific growing to provide $1.478 billion in 2019 and an expected $2.356 billion in 2030. It talks about the mounting complexity and increased scale of industrial operations, which further raises the demand for the application of advanced technologies, like NLP, to ensure efficient management.

NLP has the potential to contribute much to optimise supply chain management, improve predictive maintenance, and enhance human-machine interaction for better productivity, along with reducing the operational cost of the industry.

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Natural Language Processing (NLP) Industry Segmentation

“Natural Language Processing (NLP) Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

By components, the market is divided into:

• Hardware
• Software
• Services

On the basis of deployment, the market can be categorised into:

• On-Premises 
• Cloud

On the basis of processing type, the market is segregated into:

• Text
• Speech/Voice
• Image

Based on enterprise size, the market is categorised into:

• Small And Medium-Sized (SMEs) Enterprises
• Large Enterprises

By industry vertical, the market is divided into:

• IT And Telecom
• Healthcare
• Retail
• Banking
• Financial Services, And Insurance (Bfsi
• Manufacturing
• Media And Entertainment
• Education

By region, the market can be divided into:

• North America
• Latin America
• Asia Pacific
• Europe
• Middle East and Africa

Natural Language Processing (NLP) Market Share

Rapid Growth in NLP Solution Segment to Dominate the Market Growth

As per natural language processing (NLP) market analysis, NLP solutions are likely to improve the business as they offer the ability to rapidly develop while making full usage of the data. It offers the essential tools to analyse both numerical and linguistic data.

NLP services offer the high-quality data required to make the models powering the analytical or speech-based applications more accurate. The NLP services adoption offers several grants to end-users like speeding up software implementation, enlarging the value of current installation by optimising and minimising the deployment cost and risks, among other services.

Technological Advancements, Diverse Applications, Rising Investments in NLP, and Integration with AI Boost the Growth of the Global natural language processing (NLP) market.

• NLP has gone through fast technological advancement that has increased its precision and capacity regarding the comprehension and generation of languages.
• Its applications are also widely diverse across many industries, which include healthcare, finance, customer service, and education, enhancing the quality of communication and efficiency, accelerating the natural language processing (NLP) demand.
• Investments in NLP are also on the rise among some of the biggest technology companies and startups to spur further innovation and growth of the market.
• Smooth integration with AI technologies increases functionality and user experience.

Data Complexity, Extraction of Correct and Relevant Information, and Limited Functions May Pose as Major Challenges for the Market

• The complex variety and extensive characteristics of the data sets may create a barrier for the simple implementation of NLP.
• The extraction of correct and relevant information from semi-structured or unstructured data is one of the major challenges, impeding the demand of natural language processing (NLP) market.
• The system is created for a specific and single task only, it is not capable of adapting to new domains and problems due to limited functions. This is further anticipated to obstruct the growth of the market over the forecast period.

Increasing Number Of Use Cases, Integration With Healthcare, Cross-Lingual Capabilities, And Cloud-Based Solutions Will Provide Opportunities To The Natural Language Processing (NLP) Market.

• There are growth opportunities that come from new applications such as sentiment analysis, voice assistants, and real-time translation.
• This technology could also have a great impact on health as it will enhance interaction with patients and can also be employed in the analysis of medical data.
• Application across numerous languages opens global markets for developed systems.
• Cloud computing growth ensures easier deployment and scalability of NLP applications.

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Natural Language Processing (NLP) Market Regional Analysis

North America to be a Significant Regional Market in the Coming Years as Well

The natural language processing (NLP) industry in North America is expected to hold a significant share in the natural language processing (NLP) market owing to the high investment in technologies like AI, analytics, and ML. The United States is further expected to lead the market growth in North America due to the huge developments in IT infrastructure and the high adoption of digital technologies.

The market is likely to grow with an increase in the use of health record systems for patients as well as surging digital innovation across the healthcare and life sciences industries. Moreover, the growing advancements in NLP and the increasing popularity of technology are likely to boost the market growth in the region.

Meanwhile, the natural language processing (NLP) market share in Asia Pacific region is expected to witness robust market growth over the coming years due to rapid technological advancements, coupled with digitisation in emerging economies. The growing government initiatives and the rising focus on defence infrastructure among the middle-income population are further expected to drive the market growth in the forecast period.

Competitive Landscape

Key players in the natural language processing (NLP) market are working to enhance the scalability of algorithms, extend them for multilingual applications, and make machine learning APIs more usable. Major players develop NLP-driven tools that empower different industries with advanced business automation and insights.

Google LLC, established in 1998 and headquartered in Mountain View, California, organises its business via internet-related products and services. These main activities of the company involve web-based search, display advertising tools, cloud computing, search engines, hardware, and software. Other aims of this research on NLP at Google are to invent algorithms which could be used en masse across languages, and in multiple fields.

Amazon Web Services, Inc., headquartered in Seattle, Washington, and established in 2006, offers cloud computing services that enable companies to implement IT infrastructure. The other facility offered by the company is machine learning-based language services, which make it easy for enterprise companies to add intelligence to their AI apps using pre-trained APIs.

Baidu, Inc. is a leading AI company with strong internet fundamentals founded in 2000 and headquartered in Beijing, is the major internet search engine company in China, since it dominates the Chinese search engine market by providing services similar to those of Google, though mainly focused on the Chinese market.

Microsoft Corporation, established in 1975 and headquartered in Redmond, Washington, is one among the renowned American companies for its software products. The company's focus on digital transformation through technologies ranging from the intelligent edge to the cloud aims to democratise AI for more rampant accessibility.

Other key players in the natural language processing (NLP) market report include IBM Corporation, SAP SE, SAS Institute Inc., Intel Corporation, NVIDIA Corporation, and Adobe Inc., among others.

Competitive Factors in the Global Natural Language Processing (NLP) Market

• Companies are investing intensively in research and development to make algorithms more sophisticated for better accuracy and efficiency. 
• The presence of large and high-quality datasets is very important for training NLP models; this keeps the edge in competition. 
• The companies in differentiation can provide emphasis on robust data privacy and security measures that instil customer trust and boost the natural language processing (NLP) industry revenue.
• Easy-to-use user interfaces and seamless integrations with existing systems result in more impressive NLP products.
• These kinds of collaborations with technology providers, research institutions, and industry leaders power the speed of product development to reach wider markets. 
• Competitive pricing models include subscription-based services or freemium models that will attract a wide range of customers. 
• Compliance with global data protection regulations, such as GDPR and CCPA, should be paramount in maintaining market access and avoiding legal issues. 
• The cloud-based NLP enables quick deployment and scalability that will be very appealing to businesses desiring flexibility.
• Real-time data processing and analysis, therefore, give their respective enterprises a competitive advantage in industries where decisions have to be quick.

Global Natural Language Processing (NLP) Market Key Demand Indicators

• Growing demand for automation of customer service and operational efficiency drives the adoption of NLP among enterprises.
• Growing demand for tools to aid data-driven decision-making by analysing unstructured data supports market growth.
• Stronger AI capabilities enhance the systems of NLP, thus making them more attractive for businesses that see a competitive edge in using advanced technologies. 
• The gaining momentum of virtual assistants such as Siri, Alexa, and Google Assistant in consumer electronics increases the growth of the natural language processing (NLP) market.
• Growing demand for personalised customer experiences and sentiment analysis in e-commerce spurs the adoption of NLP. 
• Increasing usage of NLP in healthcare for patient interaction, electronic health records, and clinical documentation.

Key Price Indicators of the Global Natural Language Processing (NLP) Market

• Increased innovation and development of even more efficient algorithms will continue to decrease the cost and, consequently, lead to competitive pricing. 
• The open-source platforms and tools keep prices stably low by reducing entry barriers. 
• Heavy competition among key players such as Google, Microsoft, and IBM applies a competitive strategy of pricing for these players. 
• The entry of startups offering niche but cost-efficient solutions might alter the dynamics of pricing in the market. 
• Pricing is greatly afflicted by the availability and cost of high-quality training data; as access improves, prices drop, affecting the global natural language processing (NLP) market revenue. 
• It allows for decreasing operational costs because of the continuous development of data processing technologies and cloud computing; therefore, it influences the pricing structure.
• Compliance with data privacy regulations tends to be expensive; hence, in this respect, pricing methodologies are influenced.
• Costs related to investments in security and compliance mechanisms for the protection of sensitive data lead to high prices for end-users of the service.
• Demand for highly customised solutions that can be integrated with their existing systems increases the pricing of the service.