Generative AI in Healthcare Market Key Highlights and Future Opportunities Till 2035

The generative AI in healthcare market is projected to experience significant growth, with an estimated size of USD 3.3 billion in 2025, expected to reach USD 39.8 billion by 2035. This growth translates to a remarkable compound annual growth rate (CAGR) of 28% throughout the forecast period.

Drivers of Growth

Several factors are fueling this expansion. The healthcare industry is currently facing numerous challenges, including inefficiencies in clinical workflows, soaring treatment costs, workforce shortages, and physician burnout—49% of physicians reported feeling burnt out in 2024. Traditional drug discovery methods have lengthy timelines and high failure rates, with approximately 90% of drug candidates failing to progress in clinical trials. Generative AI offers the potential to address these issues by automating administrative tasks, improving diagnostic accuracy, enhancing patient engagement, and accelerating drug discovery and development processes. Notably, implementing generative AI in administrative tasks could yield annual savings of around $150 billion across the healthcare sector.

Market Segmentation

The generative AI in healthcare market is segmented based on several criteria:

- Purpose: The market is divided into clinical-based and system-based purposes. The clinical-based purpose currently holds the largest market share at 70%.

- Type of Offering: This segment includes technology/platforms and services, with technology/platforms capturing over 75% of the market share. The services segment is anticipated to grow at a higher CAGR of 33% by 2035.

- Application Areas: The applications include drug discovery and development, diagnosis, treatment, and administrative tasks, among others. The treatment segment is expected to maintain its dominance, driven by the increasing reliance on generative AI for improving treatment efficacy.

- End-Users: The market is segmented into pharmaceutical and life science companies, healthcare providers, and other end-users. Healthcare providers currently account for 53% of the market share.

- Geographical Regions: North America is projected to dominate the market with a 56% share, attributed to its advanced technological infrastructure and early adoption of generative AI solutions. The Asia-Pacific market is expected to grow at a higher CAGR of 29%, driven by rapid digital transformation.

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