Artificial Intelligence - Latvia

Latvia

The market size in the Artificial Intelligence market is projected to reach US$78.95m in 2024.
The market size is expected to show an annual growth rate (CAGR 2024-2030) of 28.51%, resulting in a market volume of US$355.60m by 2030.
In global comparison, the largest market size will be in the United States (US$50.16bn in 2024).

Definition:
Artificial intelligence (AI) is a branch of computer science that focuses on creating machines able to perform tasks traditionally requiring human intelligence, such as perception, reasoning, and learning. The Artificial Intelligence (AI) market includes a wide range of applications, such as speech recognition, image processing, and autonomous vehicles and has seen rapid growth in recent years due to advancements in technology and increased investment. The Artificial Intelligence (AI) market includes software, hardware, and services that enable organizations to develop and deploy AI applications.

Structure:

The Artificial Intelligence (AI) market is structured into six markets based on the technology:

The Computer Vision market covers applications that enable computers to interpret and understand digital images and video data.
The Machine Learning market covers the use of algorithms to enable computer systems to learn from data.
The Natural Language Processing market covers applications that enable computers to understand, interpret, and generate human language.
The Artificial Intelligence Robotics market covers the combination of AI, machine learning, and engineering to create intelligent machines that can perform tasks autonomously.
The Autonomous & Sensor Technology market covers machines and systems that operate independently by using sensors, AI, and machine learning to respond to changes in their environment.
The Generative AI market covers artificial intelligence that involves creating models capable of generating new content, such as images, videos, and text, which are indistinguishable from content created by humans.

Additional Information:

The Artificial Intelligence (AI) market comprises three key performance indicators: market sizes, market sizes by industry, and users of AI tools. Market sizes are generated by the funding amount of Artificial Intelligence (AI) companies. Key players of the Artificial Intelligence (AI) market include companies such as Google, Open AI, IBM, and Microsoft.

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Analyst Opinion

The Artificial Intelligence market in Latvia is experiencing rapid growth, driven by factors such as increasing adoption of digital technologies and rising demand for AI-driven solutions across various industries. The market's elevated growth rate can be attributed to the advancements in AI Robotics, Autonomous & Sensor Technology, Computer Vision, Machine Learning, Natural Language Processing, and Generative AI, which are revolutionizing businesses and transforming the economy. This growth is expected to continue as the country embraces AI and invests in its development.

Customer preferences: In Latvia, there has been a noticeable shift towards the integration of Artificial Intelligence in various industries. This is driven by the increasing demand for efficient and innovative solutions to streamline processes and enhance productivity. Additionally, there has been a growing interest in AI-powered customer service and chatbot technologies, as businesses aim to provide personalized and efficient services. Furthermore, the rise of e-commerce and online shopping has led to a surge in demand for AI-driven product recommendations and virtual assistants, catering to the changing preferences and behaviors of consumers.

Trends in the market: In Latvia, the Artificial Intelligence market is experiencing a surge in demand for AI-powered chatbots and virtual assistants among businesses, enabling them to streamline customer service and increase efficiency. Additionally, there is a growing trend of incorporating AI technology in various industries, such as finance and healthcare, to improve decision-making processes and optimize operations. This trajectory is significant for industry stakeholders as it presents opportunities for cost savings, increased productivity, and enhanced customer experiences. However, the implications of this trend also raise concerns about potential job displacement and ethical considerations in the use of AI.

Local special circumstances: In Latvia, the Artificial Intelligence market is experiencing growth due to the government's support for technology and innovation. With a highly educated workforce and a favorable business environment, the country is attracting investments in AI research and development. Additionally, the cultural emphasis on efficiency and productivity has led to the adoption of AI solutions in various industries, such as logistics and manufacturing. However, the small market size and limited access to funding are challenges that hinder the market's growth compared to other European countries.

Underlying macroeconomic factors: The Artificial Intelligence market in Latvia is heavily influenced by macroeconomic factors such as government initiatives to advance AI technologies, investments in research and development, and the overall economic health of the country. With a stable economy and a growing focus on technological innovation, Latvia is well-positioned for AI market growth. Additionally, the country's strategic location and access to a skilled workforce make it an attractive market for international companies looking to expand their AI operations. Furthermore, the increasing demand for AI solutions in various industries, such as healthcare, finance, and manufacturing, is expected to drive market growth in Latvia.

Methodology

Data coverage: The data encompasses B2B, B2G, and B2C enterprises. Figures are based on the funding values from different industries for the market.

Modeling approach / Market size:Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market. As a basis for evaluating markets, we use annual financial reports, funding data, and third-party data. In addition, we use relevant key market indicators and data from country-specific associations such as GDP, number of internet users, number of secure internet servers, and internet penetration. This data helps us estimate the market size for each country individually.

Forecasts:In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited to forecast digital products and services due to the non-linear growth of technology adoption. The main drivers are the level of digitalization, the number of secure internet servers, and the revenue of the Public Cloud market.

Additional Notes: The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russian-Ukraine war are considered at a country-specific level. The market is updated twice a year. In some cases, the market is updated on an ad-hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development). Data from the Statista Consumer Insights Global survey is weighted for representativeness.