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US Applied AI in Healthcare Market

ID: MRFR/ICT/13475-HCR
100 Pages
Garvit Vyas
October 2025

US Applied AI in Healthcare Market Research Report: By Offering (Hardware, Software, Services) - Forecast to 2035

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US Applied AI in Healthcare Market Summary

As per MRFR analysis, the applied AI in healthcare market size was estimated at 6.5 USD Billion in 2024. The applied ai-in-healthcare market is projected to grow from 8.99 USD Billion in 2025 to 229.5 USD Billion by 2035, exhibiting a compound annual growth rate (CAGR) of 38.27% during the forecast period 2025 - 2035.

Key Market Trends & Highlights

The US applied AI-in-healthcare market is experiencing robust growth driven by technological advancements and evolving healthcare needs.

  • Investment in AI technologies is witnessing a notable increase, reflecting a strong commitment to innovation in healthcare.
  • The integration of AI in telehealth services is becoming more prevalent, enhancing patient access and care delivery.
  • Data security and privacy concerns are prompting healthcare organizations to adopt more stringent measures in AI applications.
  • Rising demand for personalized medicine and enhancements in diagnostic accuracy are key drivers propelling market expansion.

Market Size & Forecast

2024 Market Size 6.5 (USD Billion)
2035 Market Size 229.5 (USD Billion)
CAGR (2025 - 2035) 38.27%

Major Players

IBM (US), Google (US), Microsoft (US), Siemens Healthineers (DE), Philips (NL), GE Healthcare (US), CureMetrix (US), Zebra Medical Vision (IL), Aidoc (IL)

US Applied AI in Healthcare Market Trends

The applied ai-in-healthcare market is currently experiencing a transformative phase, driven by advancements in technology and an increasing demand for efficient healthcare solutions. The integration of artificial intelligence into various healthcare processes appears to enhance diagnostic accuracy, streamline operations, and improve patient outcomes. As healthcare providers seek innovative ways to manage costs and improve service delivery, the adoption of ai technologies is likely to accelerate. This trend is further supported by regulatory frameworks that encourage the use of ai in clinical settings, suggesting a favorable environment for growth. Moreover, the applied ai-in-healthcare market seems to be influenced by the rising emphasis on personalized medicine. By leveraging data analytics and machine learning, healthcare professionals can tailor treatments to individual patient needs, potentially leading to better health results. The collaboration between technology firms and healthcare organizations indicates a shift towards more integrated solutions, which may redefine traditional healthcare delivery models. As the landscape evolves, stakeholders must remain vigilant to emerging trends and adapt strategies accordingly, ensuring they harness the full potential of ai technologies in healthcare.

Increased Investment in AI Technologies

Investment in ai technologies within the healthcare sector is on the rise, as stakeholders recognize the potential for improved efficiency and patient care. This trend suggests that healthcare organizations are allocating more resources towards developing and implementing ai-driven solutions, which may lead to innovative applications in diagnostics, treatment planning, and patient management.

Focus on Data Security and Privacy

As the applied ai-in-healthcare market expands, concerns regarding data security and patient privacy are becoming increasingly prominent. Healthcare providers are likely to prioritize the implementation of robust security measures to protect sensitive patient information, indicating a growing awareness of the ethical implications associated with ai technologies.

Integration of AI in Telehealth Services

The integration of ai technologies into telehealth services appears to be gaining traction, as healthcare providers seek to enhance remote patient monitoring and virtual consultations. This trend suggests that ai could play a crucial role in improving access to care, particularly for underserved populations, while also optimizing the efficiency of telehealth platforms.

US Applied AI in Healthcare Market Drivers

Enhancements in Diagnostic Accuracy

the applied AI in healthcare market is witnessing substantial advancements in diagnostic accuracy., primarily due to the implementation of AI algorithms in medical imaging and pathology. These technologies have demonstrated the ability to analyze images with a precision that often surpasses human capabilities. For instance, AI systems can identify anomalies in radiological images with an accuracy rate exceeding 90%, which is crucial for early disease detection. This improvement in diagnostic processes not only enhances patient outcomes but also reduces healthcare costs associated with misdiagnoses. As healthcare providers increasingly adopt AI-driven diagnostic tools, the applied ai-in-healthcare market is likely to expand, reflecting a growing reliance on technology to support clinical decision-making.

Regulatory Support for AI Innovations

the applied AI in healthcare market is benefiting from increasing regulatory support aimed at fostering innovation in AI technologies.. Regulatory bodies are beginning to establish frameworks that facilitate the approval and integration of AI-driven solutions in clinical settings. For instance, the FDA has introduced guidelines that expedite the review process for AI-based medical devices, which encourages companies to invest in research and development. This supportive regulatory environment is likely to accelerate the introduction of new AI applications in healthcare, enhancing the overall market landscape. As a result, the applied ai-in-healthcare market is expected to experience robust growth, driven by the influx of innovative solutions that improve patient care and operational efficiency.

Rising Demand for Personalized Medicine

the applied AI in healthcare market is experiencing a notable shift towards personalized medicine., driven by the increasing demand for tailored treatment plans. This trend is largely influenced by advancements in genomics and biotechnology, which enable healthcare providers to customize therapies based on individual patient profiles. As a result, the market for personalized medicine is projected to reach approximately $2.4 trillion by 2025, indicating a compound annual growth rate (CAGR) of around 10.5%. The integration of AI technologies facilitates the analysis of vast datasets, allowing for more accurate predictions of treatment outcomes. Consequently, this driver is expected to significantly enhance patient care and optimize resource allocation within the healthcare system, thereby propelling the growth of the applied ai-in-healthcare market.

Increased Focus on Operational Efficiency

the applied AI in healthcare market is significantly influenced by the growing emphasis on operational efficiency. within healthcare organizations. AI technologies are being deployed to streamline administrative tasks, optimize scheduling, and manage patient flow, which can lead to substantial cost savings. For example, AI-driven solutions can reduce patient wait times by up to 30%, thereby improving overall patient satisfaction. Additionally, the automation of routine tasks allows healthcare professionals to focus more on patient care rather than administrative burdens. This shift towards operational efficiency is expected to drive the adoption of AI solutions, ultimately contributing to the growth of the applied ai-in-healthcare market as organizations seek to enhance productivity and reduce operational costs.

Growing Investment in Health Data Analytics

the applied AI in healthcare market is increasingly shaped by the growing investment in health data analytics., which is essential for deriving actionable insights from vast amounts of healthcare data. Organizations are recognizing the value of leveraging AI to analyze patient data, identify trends, and improve clinical outcomes. The market for health data analytics is projected to reach $50 billion by 2026, with a CAGR of approximately 23%. This surge in investment is driven by the need for data-driven decision-making in healthcare, as providers seek to enhance patient care and operational efficiency. Consequently, the applied ai-in-healthcare market is likely to expand as organizations adopt advanced analytics solutions to harness the power of data.

Market Segment Insights

By Offering: Software (Largest) vs. Services (Fastest-Growing)

The US applied ai-in-healthcare market shows a diverse distribution of offerings across the hardware, software, and services segments. Currently, the software segment emerges as the largest contributor, holding a significant market share due to its critical role in enhancing healthcare operations, patient management, and data analytics. In contrast, the services segment, including customized healthcare solutions and consultancy, is rapidly gaining traction, reflecting a shift towards integrated service offerings that complement technological advancements. Growth trends within this segment are driven by the increasing demand for AI capabilities in healthcare, focusing on improved patient outcomes and operational efficiencies. Key drivers include the rising adoption of telehealth solutions, the integration of AI in electronic health records (EHR), and a need for real-time data analytics. As healthcare organizations look to optimize their operations and enhance patient care, both software and services are set to experience accelerated growth, albeit with software leading the way currently.

Software (Dominant) vs. Services (Emerging)

The software segment in the US applied ai-in-healthcare market is characterized by robust solutions that enhance key processes such as diagnostics, treatment planning, and patient monitoring. This dominance stems from advanced algorithms, machine learning capabilities, and user-friendly interfaces that streamline healthcare delivery. In contrast, the services segment is emerging rapidly, offering tailored solutions that integrate AI technologies into existing health systems. These services often include training, implementation, and support, thereby enabling healthcare professionals to leverage AI effectively. As organizations increasingly seek comprehensive solutions that combine technology and expert guidance, both segments will continue to evolve, with software setting a strong foundation for the services segment to build upon.

By Algorithms: Deep Learning (Largest) vs. Natural Language Processing (Fastest-Growing)

The Algorithms segment in the US applied ai-in-healthcare market is dominated by Deep Learning technologies, which capture a significant market share. Following this, Natural Language Processing is gaining traction, focusing on improving patient interactions and data processing. Querying Methods and Context Aware Processing represent smaller segments, yet they play crucial roles in overall AI applications in healthcare, particularly in enhancing query efficiencies and contextual relevance of data retrieval. Growth in the Algorithms segment is primarily driven by advancements in computing power, increased availability of healthcare data, and the rising need for efficient patient management systems. The integration of AI into clinical workflows showcases the growing reliance on sophisticated algorithms. Key trends indicate that as healthcare continues to digitize, the demand for innovative solutions like Deep Learning and Natural Language Processing will escalate, shaping the future of healthcare delivery.

Deep Learning (Dominant) vs. Natural Language Processing (Emerging)

Deep Learning stands as the dominant force within the Algorithms segment, effectively transforming healthcare analytics and diagnostic processes. It enables predictive analysis and is extensively used in imaging diagnostics, patient monitoring, and personalized medicine. Conversely, Natural Language Processing is emerging as a key player, focusing on enhancing communication between healthcare providers and patients through improved understanding of text and speech. This technology is instrumental in automating documentation and extracting insights from clinical conversations. The synergy between these two values enhances the capabilities of AI applications, driving innovation and efficiency within healthcare services.

By Application: Robot-assisted Surgery (Largest) vs. Virtual Nursing Assistant (Fastest-Growing)

The application segment in the US applied ai-in-healthcare market exhibits a robust distribution of market share among various application values. Robot-assisted surgery has emerged as the largest segment, driving significant advancements in surgical precision and patient outcomes. Following closely, virtual nursing assistants are quickly gaining traction, providing efficient patient monitoring and support, thus carving a notable share in this competitive landscape. Growth trends in this segment are largely driven by technological innovations and increasing demand for automation in healthcare. Elements such as remote patient monitoring and AI-driven diagnostic tools are fueling the advancement of applications like fraud detection and dosage error reduction. The rise of telehealth services is also enhancing the relevance of virtual nursing assistants, making them a critical aspect of healthcare delivery in the US applied ai-in-healthcare market.

Surgery: Robot-assisted (Dominant) vs. Virtual Nursing Assistant (Emerging)

Robot-assisted surgery, as the dominant application in the segment, offers remarkable capabilities in minimally invasive procedures, leading to shorter recovery times and reduced hospital stays. Surgeons are increasingly adopting these technologies owing to their precision and ability to enhance surgical outcomes. Conversely, virtual nursing assistants represent an emerging trend with significant potential growth. Their ability to provide continuous patient engagement and support through AI technologies addresses the rising demand for personalized healthcare solutions. As healthcare systems evolve, both applications will play critical roles in shaping the future of patient care, with robot-assisted surgery leading in market share and virtual nursing assistants rapidly gaining importance.

By End User: Healthcare Providers (Largest) vs. Patients (Fastest-Growing)

In the US applied ai-in-healthcare market, healthcare providers represent the largest segment, capturing a significant share of market activity due to their extensive use of AI technologies for improving patient care and operational efficiencies. This segment includes hospitals, clinics, and other healthcare institutions that are increasingly integrating AI solutions for diagnostics, treatment recommendations, and enhancing patient management practices. Conversely, the patients segment is identified as the fastest-growing area within the market. This growth can be attributed to the rising demand for personalized healthcare solutions, where AI plays a crucial role in facilitating tailored treatment plans. Additionally, the increasing adoption of health apps and wearables among patients has further accelerated the integration of AI technologies, empowering individuals to manage their health proactively.

Healthcare Providers (Dominant) vs. Patients (Emerging)

Healthcare providers dominate the US applied ai-in-healthcare market, primarily due to their need for advanced technological solutions to streamline operations and provide high-quality care. This segment encompasses hospitals and various types of healthcare facilities that leverage AI for tasks like diagnostics, patient monitoring, and administrative workflows. On the other hand, the patients segment is emerging rapidly, driven by consumer demand for more personalized healthcare experiences. Patients are increasingly utilizing AI-enabled applications that offer insights into their health, symptom tracking, and personalized treatment recommendations. This emerging trend reflects a shift towards more consumer-centric healthcare where patients actively participate in their health management, indicating a significant evolution in the healthcare landscape.

Get more detailed insights about US Applied AI in Healthcare Market

Key Players and Competitive Insights

The applied ai-in-healthcare market is currently characterized by a dynamic competitive landscape, driven by rapid technological advancements and an increasing demand for efficient healthcare solutions. Major players such as IBM (US), Google (US), and GE Healthcare (US) are at the forefront, each adopting distinct strategies to enhance their market positioning. IBM (US) focuses on leveraging its Watson Health platform to provide AI-driven insights for clinical decision-making, while Google (US) emphasizes its cloud-based solutions to facilitate data interoperability and analytics. GE Healthcare (US) is concentrating on integrating AI into imaging technologies, thereby improving diagnostic accuracy and operational efficiency. Collectively, these strategies contribute to a competitive environment that is increasingly centered around innovation and technological integration.

In terms of business tactics, companies are increasingly localizing their operations and optimizing supply chains to enhance responsiveness to market demands. The competitive structure of the market appears moderately fragmented, with several key players exerting influence across various segments. This fragmentation allows for a diverse range of solutions, although the presence of dominant players like IBM (US) and Google (US) suggests a trend towards consolidation in certain areas, particularly in AI-driven analytics and imaging solutions.

In October 2025, IBM (US) announced a strategic partnership with a leading hospital network to implement its AI-driven analytics platform, aiming to enhance patient outcomes through predictive insights. This collaboration is significant as it not only expands IBM's footprint in the healthcare sector but also underscores the growing importance of data-driven decision-making in clinical settings. The partnership is expected to facilitate better resource allocation and improve patient care pathways, aligning with broader industry trends towards personalized medicine.

In September 2025, Google (US) launched a new AI tool designed to assist radiologists in identifying anomalies in medical imaging. This tool leverages advanced machine learning algorithms to enhance diagnostic accuracy. The introduction of this technology is indicative of Google's commitment to integrating AI into healthcare workflows, potentially transforming how radiologists approach diagnostics. By streamlining the imaging process, Google (US) positions itself as a leader in the AI imaging space, which is increasingly critical as healthcare providers seek to improve efficiency and reduce diagnostic errors.

In August 2025, GE Healthcare (US) unveiled a new AI-powered imaging system that promises to reduce scan times and enhance image quality. This innovation is particularly relevant in a market that is increasingly focused on efficiency and patient throughput. By investing in cutting-edge imaging technologies, GE Healthcare (US) not only strengthens its competitive position but also addresses the pressing need for faster and more accurate diagnostic tools in healthcare settings.

As of November 2025, current trends in the applied ai-in-healthcare market are heavily influenced by digitalization, sustainability, and the integration of AI technologies. Strategic alliances among key players are shaping the landscape, fostering innovation and enhancing service delivery. Looking ahead, it appears that competitive differentiation will increasingly hinge on technological innovation and supply chain reliability, rather than solely on price. This shift suggests a future where companies that prioritize R&D and strategic partnerships will likely emerge as leaders in the evolving healthcare ecosystem.

Key Companies in the US Applied AI in Healthcare Market market include

Industry Developments

Recent developments in the US Applied AI in Healthcare Market have highlighted significant advancements and investments. In October 2023, Alphabet announced partnerships aimed at leveraging AI for predictive analytics in patient care, demonstrating its commitment to enhancing healthcare delivery. Meanwhile, in September 2023, Medtronic unveiled a new AI-driven algorithm designed to optimize management for diabetes patients, emphasizing the integration of technology in chronic disease management. Additionally, in August 2023, Amazon made headlines by enhancing its health technology services through AI, focusing on telehealth solutions.

The market has witnessed notable mergers and acquisitions, with IBM acquiring a healthcare AI startup in July 2023 to bolster its capabilities in data analysis and patient insights. Furthermore, Microsoft has expanded its healthcare initiatives by collaborating with various providers to develop AI solutions aimed at streamlining operations and improving patient outcomes. Over the past couple of years, investments from companies like Health Catalyst and Siemens Healthineers have significantly contributed to the growth of AI applications in diagnostics.

This surge in activity reflects a broader trend of increased adoption of AI technologies across healthcare institutions in the US, reinforcing the potential for transformative impacts on patient care and operational efficiencies.

Future Outlook

US Applied AI in Healthcare Market Future Outlook

The Applied AI in Healthcare Market is projected to grow at a 38.27% CAGR from 2024 to 2035, driven by advancements in technology, increased demand for personalized medicine, and enhanced data analytics capabilities.

New opportunities lie in:

  • Development of AI-driven telehealth platforms for remote patient monitoring.
  • Integration of AI algorithms in diagnostic imaging for improved accuracy.
  • Creation of personalized treatment plans using AI analytics for chronic disease management.

By 2035, the market is expected to achieve substantial growth, driven by innovative applications and strategic investments.

Market Segmentation

US Applied AI in Healthcare Market End User Outlook

  • Healthcare Providers
  • Pharmaceutical & Biotechnology Company
  • Patients
  • Payers

US Applied AI in Healthcare Market Offering Outlook

  • Hardware
  • Software
  • Services

US Applied AI in Healthcare Market Algorithms Outlook

  • Deep Learning
  • Querying Method
  • Natural Language Processing
  • Context Aware Processing

US Applied AI in Healthcare Market Application Outlook

  • Robot-assisted Surgery
  • Virtual Nursing Assistant
  • Administrative Workflow Assistance
  • Fraud Detection
  • Dosage Error Reduction
  • Clinical Trial Participant Identifier
  • Preliminary Diagnosis
  • Others

Report Scope

MARKET SIZE 2024 6.5(USD Billion)
MARKET SIZE 2025 8.99(USD Billion)
MARKET SIZE 2035 229.5(USD Billion)
COMPOUND ANNUAL GROWTH RATE (CAGR) 38.27% (2024 - 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 Billion
Key Companies Profiled IBM (US), Google (US), Microsoft (US), Siemens Healthineers (DE), Philips (NL), GE Healthcare (US), CureMetrix (US), Zebra Medical Vision (IL), Aidoc (IL)
Segments Covered Offering, Algorithms, Application, End User
Key Market Opportunities Integration of advanced machine learning algorithms for personalized patient care and predictive analytics.
Key Market Dynamics Rapid advancements in artificial intelligence drive innovation and competition in the applied ai-in-healthcare market.
Countries Covered US

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FAQs

What is the projected market size of the US Applied AI in Healthcare Market in 2024?

The projected market size for the US Applied AI in Healthcare Market in 2024 is estimated to be 6.88 billion USD.

How much is the US Applied AI in Healthcare Market expected to grow by 2035?

By 2035, the US Applied AI in Healthcare Market is expected to reach a valuation of 165.55 billion USD.

What is the anticipated compound annual growth rate (CAGR) for the US Applied AI in Healthcare Market from 2025 to 2035?

The anticipated CAGR for the US Applied AI in Healthcare Market from 2025 to 2035 is 33.524 percent.

What will be the market value for Hardware in the US Applied AI in Healthcare Market in 2035?

The market value for Hardware in the US Applied AI in Healthcare Market is forecasted to be 35.0 billion USD in 2035.

What is the expected market size for Software in the US Applied AI in Healthcare Market by 2035?

The expected market size for Software in the US Applied AI in Healthcare Market is projected to reach 100.0 billion USD by 2035.

How significant is the Services offering in the US Applied AI in Healthcare Market for the year 2024?

The Services offering in the US Applied AI in Healthcare Market is valued at 2.38 billion USD for the year 2024.

Which companies are considered major players in the US Applied AI in Healthcare Market?

Major players in the US Applied AI in Healthcare Market include Alphabet, Medtronic, IBM, Microsoft, and Siemens Healthineers.

What market share do Software offerings hold in the US Applied AI in Healthcare Market compared to other offerings in 2024?

In 2024, Software offerings hold a significant share valued at 3.0 billion USD within the US Applied AI in Healthcare Market.

What are the major growth drivers for the US Applied AI in Healthcare Market going forward?

Major growth drivers include increased adoption of AI technologies, demand for improved healthcare services, and advancements in machine learning.

How do technological advancements affect the US Applied AI in Healthcare Market?

Technological advancements are rapidly driving growth in the US Applied AI in Healthcare Market, enhancing efficiency and outcomes across the sector.

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