As per MRFR analysis, the UK AI in IoT Market Size was estimated at 331.98 (USD Million) in 2023.The UK AI in IoT Market is expected to grow from 425.6(USD Million) in 2024 to 1,795 (USD Million) by 2035. The UK AI in IoT Market CAGR (growth rate) is expected to be around 13.979% during the forecast period (2025 - 2035)
Key UK AI in IoT Market Trends Highlighted
The growing use of smart technologies in a variety of industries is propelling the UK AI in IoT market's notable expansion. 5G's improved connection, which allows for more connected devices and faster data transfer rates, is one of the main factors propelling the market.For sectors like manufacturing, transportation, and healthcare, this increased connection is essential since it allows for real-time data analysis and decision-making. Additionally, government programs that support digital innovation and smart city initiatives are driving the incorporation of AI into IoT systems.
The UK government has demonstrated its commitment to being at the forefront of technical breakthroughs by making large investments in technology research and development. The investigation of industries like energy management and smart homes, where AI can enhance user experiences and optimize resource consumption, is capturing opportunities in the UK market.
A crucial area for businesses to investigate is the increasing emphasis on security solutions to shield IoT devices from online attacks. Recent trends indicate that startups and established businesses are working together more frequently to take advantage of AI's potential for Internet of Things applications.
Interest in AI-powered IoT solutions that assist in monitoring and lowering energy use across multiple industries is also being fueled by the rise in awareness of sustainability and energy efficiency. All things considered, the UK AI in IoT market is poised for sustained growth, driven by technical advancement, encouraging regulations, and the need for more intelligent, effective systems.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
UK AI in IoT Market Drivers
Increasing Demand for Smart City Solutions
The UK AI in IoT Market is significantly driven by the increasing demand for smart city solutions. As urban areas continue to grow, cities are investing in advanced IoT technologies to enhance service delivery and improve operational efficiency.According to the UK government's 'Smart Cities: A UK Perspective' report, local authorities in the UK are expected to invest over 4.2 billion USD by 2030 on smart technologies.Â
This investment will pave the way for better urban planning and resource management, showcasing the vital role of Artificial Intelligence in the Internet of Things to facilitate this transition.Major organizations such as Siemens and BT Group are actively involved in developing smart city projects across the UK, leveraging AI and IoT to optimize services like waste management, traffic control, and energy distribution, hence driving the market growth.
Growth of Industrial IoT Applications
The UK AI in IoT Market is experiencing robust growth due to the rising implementation of Industrial Internet of Things (IIoT) applications across various sectors such as manufacturing and logistics.A report from the UK government indicates that the manufacturing sector alone is projected to increase its adoption of IIoT technologies by 30% over the next five years, which will enhance productivity and efficiency.
Companies like Rolls-Royce and BAE Systems are integrating AI into their IoT systems for predictive maintenance and operational monitoring, significantly influencing market dynamics. This growing trend essentially transforms traditional operational practices by incorporating data analytics and machine learning, thereby boosting the UK AI in IoT Market.
Government Initiatives Supporting AI and IoT
Government initiatives focusing on Artificial Intelligence and Internet of Things technologies are a key driver for the UK AI in IoT Market. The recent UK Government’s 'AI Sector Deal' emphasizes collaboration between the public and private sectors, aiming to foster innovation and investment in AI technologies.
The plan includes a commitment of 1 billion USD for AI research and applications, facilitating a conducive environment for the growth of AI in IoT applications. As a result, established companies like IBM and Arm Holdings are increasingly engaging with these initiatives to develop and implement solutions that integrate AI with IoT, further propelling the market’s expansion in the UK.
AI in IoT Market Component Insights
The Component segment of the UK AI in IoT Market encompasses critical elements such as Platforms, Software Solutions, and Services, which are essential for facilitating advanced applications and enhancing operations across various sectors.The market is on an upward trajectory, with the revenue from AI-driven IoT applications reflecting significant potential for growth, driven by increasing investments in digital transformation and innovation. One key factor propelling the demand for Platforms is the rising need for robust frameworks that can support an array of IoT devices and services, ensuring seamless integration and data interoperability.
Software Solutions are gaining importance as organizations implement AI technologies for data analytics, real-time decision-making, and predictive maintenance, allowing them to derive valuable insights and drive efficiencies in operations.Services in the UK market are particularly essential as they provide the necessary support for implementation, management, and continual optimization of AI in IoT systems, enabling businesses to adapt to evolving technological landscapes.
The dynamic UK landscape, with its focus on sustainability and innovation, fosters a competitive environment for these components, encouraging the development of tailored solutions that address specific industry needs.Additionally, the convergence of AI with IoT is reshaping market trends, enabling companies to drive efficiencies while enhancing user experiences across both consumer and industrial applications.
Amid these advancements, challenges such as data privacy, security concerns, and the need for compliance with regulation are significant, requiring businesses to implement robust frameworks that address these risks effectively.As firms navigate these obstacles, opportunities for growth persist, particularly in sectors such as healthcare, transport, and smart cities, where AI in IoT innovations can yield transformative benefits.
The engagement of government initiatives and industry collaborations further propels the development of the UK AI in IoT Market, creating a conducive ecosystem for the emergence of cutting-edge technologies that leverage the capabilities of AI and IoT.Insights into the UK AI in IoT Market segmentation indicate that Platforms and Software Solutions are likely to play pivotal roles in shaping the future landscape of the industry by enabling a smarter, more connected world.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
AI in IoT Market Technologies Insights
The UK AI in IoT Market is rapidly evolving, particularly in the Technologies segment, which significantly shapes how artificial intelligence is integrated into Internet of Things applications. This segment broadly encompasses various technologies, including machine learning and deep learning, as well as natural language processing.
The importance of machine learning and deep learning lies in their capability to process vast amounts of data and derive valuable insights, driving automation and efficiency across different sectors such as agriculture, healthcare, and manufacturing.
These technologies are pivotal in enhancing predictive analytics and improving decision-making processes, offering substantial benefits in operational efficiency and resource management. Similarly, natural language processing plays a crucial role in enabling effective communication between IoT devices and users, allowing for more intuitive user experiences and better data interpretation.
The demand for these technologies is projected to grow, largely fueled by advancements in data analytics and increasing IoT deployments across the UK. As organizations continue to leverage data for strategic decision-making, the UK AI in IoT Market is expected to witness considerable progression, driven by innovations and emerging applications within the Technologies segment.
AI in IoT Market Vertical Insights
The UK AI in IoT Market is witnessing a dynamic transformation across various verticals, highlighting significant advancements and adoption of technologies. The manufacturing sector plays a crucial role, utilizing AI and IoT for predictive maintenance, optimizing production processes, and enhancing supply chain efficiency, which aligns with the UK government's initiative to bolster the industrial sector.
The energy and utilities sector is equally impactful, focusing on smart grids and energy management systems that facilitate real-time monitoring and reduce operational costs. Transportation and mobility are being revolutionized through AI-driven analytics, enabling smarter traffic management and improving safety measures, vital for urban areas in the UK.
Critically, the BFSI sector leverages AI and IoT for fraud detection, risk assessment, and personalized customer experiences, positioning itself as a frontrunner in technology adoption. Government and defense applications employ these technologies for smart surveillance and logistics, contributing to national security.
In the retail sector, AI and IoT enhance customer engagement through personalized offerings and efficient inventory management. Healthcare and life sciences utilize AI to analyze patient data, streamline operations, and facilitate remote patient monitoring, reflecting the increasing shift towards digital health solutions.
The telecom industry also capitalizes on AI for optimizing network performance and delivering improved customer services. Overall, these verticals reflect the key growth areas and strategic significance of AI in the IoT landscape in the UK, as businesses aim to drive innovation and efficiency while addressing various challenges and opportunities in the market.
UK AI in IoT Market Key Players and Competitive Insights
The UK AI in IoT market is experiencing significant competitive dynamics, propelled by intensifying technological advancements and an increasing focus on digital transformation across various sectors.With the integration of artificial intelligence into Internet of Things devices, companies are leveraging data analytics, machine learning, and predictive insights to enhance operational efficiencies and customer experiences.The competitive landscape is characterized by a mix of established players and innovative startups, all vying for market share in an environment that prioritizes agility and collaboration. As organizations seek to harness the full potential of interconnected devices, the role of competitive intelligence becomes crucial in understanding market demands, technology trends, and strategic positioning.
Within the UK AI in IoT market, Oracle stands out due to its robust portfolio encompassing cloud platforms, integrated analytics, and a wide array of IoT applications. The company's strong capabilities in data management and analytics allow it to provide organizations with comprehensive solutions that enhance operational efficiencies and foster informed decision-making.Oracle has established a significant presence in various industries, including manufacturing, healthcare, and smart cities, providing tailored solutions that meet specific sector needs. The strength of Oracle lies in its ability to integrate AI-driven insights into existing business processes, thereby allowing organizations to maximize their IoT investments and drive innovation.
PTC holds a prominent position in the UK AI in IoT market through its focus on augmented reality, digital twin technology, and IoT solutions. The company is known for its flagship product offerings, which include ThingWorx, a leading industrial IoT platform that empowers businesses to develop connected solutions swiftly and efficiently.PTC’s strengths are augmented by strategic mergers and acquisitions aimed at enhancing its technological capabilities and expanding its market presence. The company fosters partnerships within the UK to deliver comprehensive solutions catered to industries such as manufacturing, automotive, and aerospace, ensuring that its products remain at the forefront of technological advancements.Through its persistent innovation and commitment to integrating AI with IoT, PTC continues to play a pivotal role in transforming how businesses operate in an increasingly connected world.
Key Companies in the UK AI in IoT Market Include:
UK AI in IoTMarket Developments
Oracle declared in March 2025 that it would invest $5 billion in cloud infrastructure in the UK to foster AI innovation. SPARK Matrix named PTC a leader in the worldwide Industrial IoT market in 2023. The UK's fastest AI supercomputer, "Dawn," was introduced by Dell Technologies in 2023 in partnership with Intel and UKRI to tackle computational issues in academia and industry.Siemens and IoT Tribe launched the Flywheel Program in 2023 to assist AI-powered aircraft businesses. More than 60% of generative AI firms in the UK selected Google Cloud, according to a 2023 Google research. To encourage AI innovation, the company started the 'Gemini for UK' campaign.
The strong demand for AI chip designs drove Arm Holdings' 2023 initial public offering (IPO), which valued the business at $120 billion. Accenture revealed in 2023 that more UK businesses had intentions to invest in AI, demonstrating an increasing dedication to AI adoption.Microsoft launched a £2.5 billion AI infrastructure plan in the UK in 2023, however progress of the project is being hampered by grid connection delays. These examples demonstrate how the UK is actively involved in the AI in IoT space, with large investments and programs fostering innovation and expansion.
UK AI in IoT Market Segmentation Insights
AI in IoT Market Component Outlook
AI in IoT Market Technologies Outlook
AI in IoT Market Vertical Outlook
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2023 | 331.98(USD Million) |
| MARKET SIZE 2024 | 425.6(USD Million) |
| MARKET SIZE 2035 | 1795.0(USD Million) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 13.979% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Million |
| KEY COMPANIES PROFILED | Oracle, PTC, Dell Technologies, Siemens, Google, Arm Holdings, General Electric, Accenture, Cisco, Huawei, SAP, IBM, Intel, Amazon, Microsoft |
| SEGMENTS COVERED | Component, Technologies, Vertical |
| KEY MARKET OPPORTUNITIES | Smart home automation solutions, Industrial IoT advancements, Healthcare monitoring systems, Predictive maintenance applications, Enhanced security surveillance technologies |
| KEY MARKET DYNAMICS | Growing adoption of smart devices, Increasing demand for automation, Rising investments in AI technologies, Enhanced data analytics capabilities, Government support for innovation |
| COUNTRIES COVERED | UK |
Frequently Asked Questions (FAQ):
The UK AI in IoT Market is expected to be valued at 425.6 million USD in 2024.
By 2035, the UK AI in IoT Market is projected to reach a value of 1795.0 million USD.
The expected CAGR for the UK AI in IoT Market from 2025 to 2035 is 13.979%.
The UK AI in IoT Market is segmented into components such as Platforms, Software Solutions, and Services.
The Platforms segment of the UK AI in IoT Market is expected to be valued at 417.0 million USD in 2035.
The Software Solutions segment is projected to be valued at 160.0 million USD in 2024.
Major players in the UK AI in IoT Market include Oracle, PTC, Dell Technologies, Siemens, and Google among others.
The Services segment of the UK AI in IoT Market is expected to be valued at 718.0 million USD in 2035.
The growth dynamics across segments show promising trends, particularly in Software Solutions and Services.
Key growth drivers include increasing adoption of AI technologies and the demand for smart IoT solutions.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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