AI Augmented Software Engineering Market

Market Definition

The AI Augmented Software Engineering Market size was valued at USD 2.1 billion in 2023 and is predicted to reach USD 26.8 billion by 2030 with a CAGR of 37.5% from 2024-2030.

AI-augmented software engineering is the integration of artificial intelligence (AI) and machine learning (ML) technologies as tools for software development. It aims to improve the overall software engineering process by leveraging AI tools to automate various tasks such as code generation, bug fixing, understanding the code, testing, and project management, and more. Capability of AI system to learn from evolving data and experiences enhances their effectiveness in the field of software development. This approach enables developers to create applications more effectively, quickly, and reliably than they could with traditional coding. 

Market Dynamics and Trends

The AI augmented software engineering market is driven by competitive dynamics of the software development industry around the world. Software companies are actively seeking fresh and inventive solutions to accelerate software development process and produce applications that are not only advanced but also of high quality.

There is a rise demand for AI augmented software engineering, owing to the industry's need to stay ahead and thrive in the highly competitive software development landscape.

Moreover, rise in interest in sophisticated applications and software that possess advanced features such as natural language processing and machine learning further propels growth of the market.

By using AI, developers can create applications that are not only intelligent but also packed with a wide range of features such as smart chatbot and enhanced language translator to meet the growing demand for technologically advanced and powerful software solutions. 

This trend highlights crucial role of AI in enhancing capabilities of software engineering and delivering cutting-edge applications to users, further leading to the market growth.

However, the likelihood of AI systems taking over the roles of human software engineers is expected to slow down the market growth.

On the other hand, evolving debugging tools are expected to create future opportunities for the market. AI algorithms within these tools is attributed to excel at identifying the root causes of issues and providing prompt solutions, which further propels market growth.

Market Segmentations and Scope of the Study

The AI augmented software engineering market  is segmented on the basis of component, tools, application, end user, and region. On the basis of component, the market is divided into machine learning, deep learning, and others. On the basis of tools, it is segmented into conversational ai models, autonomous testing tools, AI – based debugging tools, and others. On the basis of application, it is divided into creating code, bug fixing, software testing, and others. On the basis of end-user, the market is further segmented into software development companies, startups, independent developers, government organizations, research and academic institutions, and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and RoW.

Geographical Analysis

Presently, North America holds a dominant share of the AI augmented software engineering market and is expected to continue its dominance during the forecast period. This is attributed to increase in government initiatives and plans to uphold development of artificial intelligence in the region.

According to a report published by the National Science and Technology Council, in May 2023, the Government of the U.S. launched the National Artificial Intelligence Research and Development Strategic Plan 2023. The plan addresses importance and role of AI in the U.S. and focus on various strategies such as public-private partnership and international collaboration to uphold the development and integration of AI various industries such as healthcare, manufacturing, and logistics. Increase in government participation to promote the use of AI is also expected to increase their integration in software development, thereby propelling the growth of the market.

Moreover, significant presence of major companies such as IBM Corporation, Microsoft Corporation, and Amazon.com, Inc in North America further propels the market growth.

For instance, in December 2023, GitHub, a subsidiary of Microsoft Corporation, introduced GitHub Copilot Chat to aid developers in providing intelligent code suggestions through advanced natural language processing. The chatbot aims to enhance productivity by streamlining the coding process and saving time on repetitive tasks, improving efficiency and creativity in software development.

On the other hand, Asia-Pacific is witnessing a consistent growth in the AI augmented software engineering market, driven by rise in number of startups in countries such as India, China, and Vietnam. As per a report published by the National Investment Promotion Agency, India recorded a total of 99,000 startups in 2023, with 31,000 identified as technological startups, positioning India as the third-largest contributor to global startups. Strong presence of startups further propels demand for AI backed software and tools to increase efficiency through automation of tasks and resource optimization, which propels growth of the market.

Moreover, surge in digitalization in Asia-Pacific significantly propels growth of the AI augmented software engineering market. As businesses, industries, and governments increasingly opt for digital transformation, there is a heightened demand for innovative software solutions to enhance operational efficiency and competitiveness.

According to a report published by GSM Association in July 2023, smartphone adoption in Asia-Pacific is expected to exceed to 3 billion by the year 2030.

In addition, adoption of 5G network connections within the region is expected to rise by 41% in the year 2030 from 4% in 2022. Moreover surge in demand for advanced AI tools and software applications across various sectors with AI plays pivotal role in meeting these demands.

Competitive Landscape

The AI augmented software engineering market comprises various market players such as IBM Corporation, DataRobot, Inc., DataRoot Labs, Inc., DataToBiz, Intel Corporation, Kodezi, Amazon.com, Inc., Google LLC, Microsoft Corporation, and LeewayHertz. These market players are adopting various strategies such as products launched to maintain their dominance in the AI augmented software engineering market.

For instance, in December 2023, Google updated its AI platform BARD with enhance multi language capabilities such as Japanese and Korean. The efficiency to export languages was also enhanced with the improvised feature of supporting more programming languages such as SQL, C++, and others.

Moreover, in January 2023, Kodezi launched Kodezi 2.0, an AI assisted code development platform equipped with a website, which features Visual Studio Code. The launch was aimed to enhance code generation and easy bug detection, making software development process seamless and efficient. 

Key Benefits

• The report provides quantitative analysis and estimations of the AI augmented software engineering market from 2024 to 2030, which assists in identifying the prevailing market opportunities.

• The study comprises a deep-dive analysis of the AI augmented software engineering market including the current and future trends to depict prevalent investment pockets in the market.

• Information related to key drivers, restraints, and opportunities and their impact on the AI augmented software engineering market is provided in the report. 

• Competitive analysis of the players, along with their market share is provided in the report.

• SWOT analysis and Porters Five Forces model is elaborated in the study.

• Value chain analysis in the market study provides a clear picture of roles of stakeholders.

Key Market Segments

By Component

• Machine Learning 

• Deep Learning 

• Others

By Tool

• Conversational AI Models 

• Autonomous Testing Tools 

• AI – Based Debugging Tools 

• Others

By Use

• Creating Code 

• Bug Fixing 

• Software Testing 

• Others

By End User

• Software Development Companies 

• Startups 

• Independent Developers 

• Government Organizations 

• Research and Academic Institutions 

• Others

By Region

• North America

  • U.S.

  • Canada

  • Mexico

• Europe

  • UK

  • Germany

  • France        

  • Italy        

  • Spain        

  • Denmark        

  • Netherlands        

  • Finland        

  • Sweden        

  • Norway        

  • Russia        

  • Rest of Europe    

• Asia-Pacific

  • China

  • Japan

  • India

  • South Korea

  • Australia

  • Indonesia

  • Singapore

  • Taiwan

  • Thailand

  • Rest of Asia-Pacific

• RoW

  • Latin America

  • Middle East

  • Africa

REPORT SCOPE AND SEGMENTATION:

Parameters	Details
Market Size in 2023	USD 2.1 Billion
Revenue Forecast in 2030	USD 26.8 Billion
Growth Rate	CAGR of 37.5% from 2024 to 2030
Analysis Period	2023–2030
Base Year Considered	2023
Forecast Period	2024–2030
Market Size Estimation	Billion (USD)
Growth Factors	The changing competitive dynamics of the software company around the word is driving the market.  The rising demand for using sophisticated software is driving the growth of the market.
Countries Covered	28
Companies Profiled	10
Market Share	Available for 10 companies
Customization Scope	Free customization (equivalent up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope.
Pricing and Purchase Options	Avail customized purchase options to meet your exact research needs.

KEY PLAYERS

• IBM Corporation

• DataRobot, Inc.

• DataRoot Labs, Inc.

• DataToBiz

• Intel Corporation

• ThirdEye Data.

• Amazon.com, Inc.

• Google LLC

• Microsoft Corporation

• LeewayHertz.