March 2, 2024

Natural Language Processing Is Expected To Be Flourished By Emerging AI-Based Applications

Natural language processing (NLP) refers to the interactions between humans and computers using natural language words and sentences instead of coded instructions. NLP models are capable of understanding, generating, and analyzing human language through techniques like semantic analysis, sentiment analysis, named-entity recognition, and others. NLP has a wide range of uses across various industries such as healthcare, BFSI, retail, and more. Healthcare companies use NLP models for electronic health records, medical imaging analysis, and precision medicine. BFSI players use NLP for chatbots, customer service support, and fraud detection. Retailers use NLP for product search, reviews analysis, and customer experience management.

The global Natural Language Processing Market is estimated to be valued at Us$ 23122.23 Bn in 2024 and is expected to exhibit a CAGR Of 19.% over the forecast period 2024 To 2031, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

One key driver referred from the heading is the emergence of AI-based applications. The integration of AI technologies like machine learning and deep learning has enabled the development of advanced NLP models with human-level language understanding capabilities. Numerous AI chatbots and virtual assistants developed by technology giants like Amazon, Google, Microsoft rely on NLP at their core. These AI applications are finding widespread adoption across various consumer and enterprise domains like e-commerce, smart devices, and customer support. The growing demand for AI-based conversational platforms and interfaces is driving significant growth opportunities in the NLP market. Additionally, the need for AI data annotation and training is also promoting investments in NLP technologies from AI companies.

 

Segment Analysis

The natural language processing market is dominated by the cloud segment. With the growing popularity of cloud based services among organizations of various sizes, cloud deployment of NLP solutions has gained traction over the past few years. The flexibility and scalability offered by cloud-based NLP solutions has made them a preferred choice for most end-users. The segment currently holds around 60% share of the overall market and is expected to remain dominant over the forecast period with continued migration from on-premise to cloud models.

PEST Analysis

Political: Government initiatives promoting digital transformation and adoption of advanced technologies across sectors are positively impacting the market. However, strict data privacy laws can hamper cross-border data sharing required for certain NLP applications.

Economic: Growing IT budgets of enterprises for AI and analytics projects is fueling investments in complementary technologies like NLP. However, economic slowdowns can temporarily impact spending on non-essential technologies.

Social: Changing communication patterns with rising social media and messaging apps are fueling demand for improved customer support and conversational interfaces powered by NLP. However, concerns around AI job disruption and bias in algorithms need to be addressed.

Technological: Advancements in deep learning, availability of massive datasets and low-cost cloud computing are driving capabilities of NLP to new levels. However, achieving human-level language understanding remains a challenge requiring further research.

Key Takeaways

The Global Natural Language Processing Market Demand is expected to witness high growth over the forecast period supported by expanding use cases across industries. Cloud deployment is gaining significant traction led by its flexibility and scalability.

Regional analysis:

North America currently dominates the market led by presence of key players and early adoption of technologies. Asia Pacific is expected to witness fastest growth led by increasing digitalization initiatives, and expansion of technology giant’s operations in the region.

Key players:

Key players operating in the natural language processing market are Walmart, Costco Wholesale Corporation, The Kroger Co., Walgreens Boots Alliance Inc., TESCO PLC, Amazon.com Inc., METRO, Home Depot Product Authority LLC. , Target Brands Inc., Best Buy, nter IKEA Systems B.V, Carrefour SA, eBay Inc. These players are focused on developing advanced NLP solutions and exploring new applications to strengthen their market position.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it