Global Natural Language Understanding Growth Rate 2025, Forecast To 2034
19 Mar, 2025
What are the Historical Developments and Current Growth Metrics of the Natural Language Understanding Market?
The natural language understanding market has seen considerable growth due to a variety of factors.
• There has been a significant expansion in the market size of natural language understanding in the past few years. Projections indicate an escalation from $21.52 billion in 2024 to $28.42 billion in 2025, manifesting an annual cumulative growth rate (CAGR) of 32.1%.
The historic growth can be credit to the rising demand for immediate insights, medical diagnostics and observation, progression in semantic search, amalgamation with business intelligence instruments, along with surging data accessibility.
What Is The Projected Growth Of The Natural Language Understanding Template Market?
The natural language understanding market is expected to maintain its strong growth trajectory in upcoming years.
• The market for natural language understanding is predicted to experience an outstanding rise in the coming years. The market is forecasted to reach a massive $85.64 billion by 2029, expanding at a compound annual growth rate (CAGR) of 31.8%.
This amplified growth during the projected period can be associated with the widespread adoption of chatbots, intensifying digitization efforts, the demand for multimodal NLU, and the escalation of Conversational AI. Upcoming trends in the forecast period encompass merging with virtual and augmented reality (VR and AR), advances in sentiment analysis, evolution in neural network structures, and the incorporation of IoT.
What Are The Key Drivers Fueling Growth In The Natural Language Understanding Market?
The upward trend in the use of artificial intelligence (AI) is predicted to spur the progression of natural language understanding. AI represents a gamut of technologies and algorithms that allow machines to replicate human intelligence, such as problem-solving, merging insights from data, and crucial decision making. The rising acceptance of AI owes to several components that include advancements in computer power and cloud innovation, the abundance of data for algorithm training, improvements in the formulation and fine-tuning of algorithms, as well as elevated investments and funding synchronized towards AI's research and evolution. Natural language understanding, under the umbrella of AI, equips systems with the ability to perceive and reciprocate human language, thus augmenting functions like sentiment examination, chatbot efficiency, and the automation of customer service. For example, data from Eurostat, a regulatory entity based in Belgium, revealed that in May 2024 the percentage of large-scale companies resorting to AI technologies had risen to 30.4% in 2023 from 28.4% in 2021, signaling a remarkable increase in the adoption rate of AI applications within these corporations. Therefore, as AI's acceptance continues on an upward trend, it is giving impetus to the evolution of the market for natural language understanding.
What Are The Principal Market Segments In The Global Natural Language Understanding Industry?
The natural language understandingmarket covered in this report is segmented –
1) By Type: Rule-Based, Statistical, Hybrid
2) By Offering: Solutions, Services
3) By Deployment Type: Cloud-Based, On-Premise
4) By Application: Chatbots And Virtual Assistants, Customer Experience Management, Text Analysis, Sentiment Analysis, Interactive Voice Response (IVR) And Message Routing, Data Capture, Machine Translation, Other Applications
5) By Vertical: Banking, Financial Services And Insurance, Healthcare And Life Science, Retail And E-commerce, Information Technology And Information Technology Enabled Services (IT And ITeS), Transportation And Logistics, Government And Public Sector, Media And Entertainment, Manufacturing, Telecommunication, Other Verticals
Subsegments:
1) By Rule-Based: Syntax-based Parsing, Semantic-based Parsing, Grammar Rules, Expert Systems
2) By Statistical: Machine Learning, Probabilistic Models, Deep Learning Algorithms, Statistical Parsing
3) By Hybrid: Rule-Based and Machine Learning Integration, Statistical and Deep Learning Combination, Hybrid Parsing Techniques, Ensemble Methods
What Emerging Trends Are Influencing The Growth Of The Natural Language Understanding Market?
Prominent players in the natural language understanding market are emphasizing on the creation of data platforms that incorporate significant language model capabilities, which could give them a competitive edge in the market. A significant language model refers to a highly developed AI mechanism that is trained on endless textual data to comprehend and produce language similar to humans, serving various purposes like translation and content creation. For illustration, in May 2024, International Business Machines Corporation, an American enterprise offering hybrid cloud and AI collaborated with Salesforce Inc., an American company offering enterprise cloud computing solutions, to amalgamate the capabilities of IBM Watsonx AI and data platform with the Salesforce Einstein 1 Platform. This union aims to add more options and flexibility for customers in AI and data execution. The Einstein 1 Platform gives companies the ability to securely connect any data to construct AI-driven low code apps that can enhance customer relationship management (CRM) experiences. This, in turn, will enable teams to utilize data to make decisions and implement actions directly in their work process.
Who Are the Key Players In The Natural Language Understanding Market?
Major companies operating in the natural language understanding market are:
• Amazon Web Services Inc.
• Apple Inc.
• Google LLC
• Microsoft Corporation
• Meta Platforms Inc.
• International Business Machines Corporation
• Oracle Corporation
• Baidu Inc.
• SAS Institute Inc.
• OpenAI
• DataBricks Inc
• Teradata Corporation
• Qualtrics
• C3.ai Inc
• H2O.ai
• SoundHound Inc.
• Iodine Software LLC
• Inbenta
• Crayon Data
• Haptik Inc.
What Are The Regional Insights Into The Natural Language Understanding Market?
North America was the largest region in the natural language understanding market in 2024. The regions covered in the natural language understanding market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.