AI in Energy Market Size to Reach USD 77.25 Billion in 2032

March 28, 2025 - The growing adoption of smart grid energy distribution is a key driver of revenue growth in the AI energy market. Smart grids leverage artificial intelligence to optimize energy flow, forecast demand patterns, and enhance grid resilience. It reduces energy losses and improves overall efficiency. Utilities and energy providers are increasingly investing in AI-powered solutions for real-time monitoring, fault detection, and automated energy distribution. It helps to minimize downtime and lower operational costs.

According to the International Energy Agency (IEA), global energy consumption rose by 2.2%, surpassing its historical average, with the BRICS countries playing a significant role. These countries contributed 42% of the total energy demand. The number of patents related to AI integration in power grids has surged six times in recent years. The United States and China are leading advancements in AI-driven smart grids, driving innovation in this rapidly evolving sector.

In May 2024, Iberdrola launched the AI Innovation Data Space (i-DS) initiative to enhance data utilization for power grid optimization. This project focuses on using AI to accelerate data processing and improve decision-making in distribution networks. Iberdrola is enhancing grid efficiency, reducing downtime, and ensuring a more reliable energy supply. These advancements are fueling revenue growth in the AI energy market by increasing demand for AI-powered grid management solutions.

However, the lack of skilled professionals poses a significant challenge to the revenue growth of AI in the energy market. As industries increasingly adopt AI-driven solutions, the demand for AI and machine learning specialists has surged, leading to a talent shortage. In June 2022, there were only 22,000 AI specialists available globally across various industries, with 61% of large companies in the U.S. and U.K. reporting a shortage of AI-experienced staff. This limited talent pool makes it challenging for energy companies to attract top data scientists and AI engineers, hindering the pace of AI deployment and innovation in the sector.

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Segments Market Overview And Growth Insights:
Based on the component, the AI in energy market is segmented into solutions and services. Solution segment is further sub-segmented into AI platforms, AI analytics tools, and others. Services segment is further sub-segmented into deployment & integration, support & maintenance, and consulting services.

The solution segment held the largest market share in 2024 due to the widespread adoption of AI-powered technologies to enhance energy efficiency and operational reliability. Energy companies are increasingly investing in AI solutions such as predictive maintenance, demand forecasting, smart grid automation, and cybersecurity to optimize costs and boost performance. Additionally, the growing integration of renewable energy sources has amplified the need for AI-driven analytics to manage supply and demand effectively. In December 2024, Schneider Electric expanded its portfolio of AI-ready data center solutions with innovations designed to address critical energy and sustainability challenges arising from the increasing demand for AI systems.

Regional Market Overview and Growth Insights:
North America held the largest revenue share in 2024 due to the rising investments in digital transformation, sustainability initiatives, and energy efficiency, particularly in the U.S. and Canada. In April 2024, the U.S. Department of Energy (DOE) launched the USD 13 million VoltAIc initiative to accelerate the siting and permitting of critical clean energy infrastructure. As part of this initiative, data scientists and experts at DOE's Pacific Northwest National Laboratory received USD 300,000 to develop a pilot prototype of "PolicyAI," an AI-powered tool aimed at streamlining the environmental review process for federal regulators.

The Asia Pacific region is projected to experience rapid revenue growth during the forecast period, driven by accelerated industrialization, rising energy demand, and strong government initiatives supporting digital transformation and sustainability. Countries such as China, India, Japan, and South Korea are making significant investments in AI-powered energy solutions to improve grid management, optimize energy consumption, and effectively integrate renewable energy sources. China aims to establish three to five major energy storage enterprises to enhance the global competitiveness of its domestic industry and develop high-performance energy storage solutions by 2027. As part of this strategy, the country is focusing on improving efficiency in related manufacturing sectors by leveraging advanced technologies, including blockchain, artificial intelligence, and other emerging innovations.

Competitive Landscape and Key Competitors
The AI in Energy market is characterized by a fragmented structure, with many competitors holding a significant share of the market. List of major players included in the market report are:
o Siemens Energy
o General Electric
o Schneider Electric
o ABB Group
o Atos SE
o Iberdrola
o DeepMind (Google)
o Stem, Inc.
o AppOrchid Inc
o Green Factory AI
o C3.ai, Inc
o Uplight, Inc
o On.Energy
o Energy X
o Others

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Major Strategic Developments By Leading Competitors:

ABB: On January 6, 2025, ABB announced a strategic partnership with Edgecom Energy, a Toronto-based energy management startup. Edgecom Energy's cutting-edge platform utilizes artificial intelligence to help industrial and commercial users optimize power consumption and reduce peak demand. Significantly, it is the first solution in the market to incorporate a generative AI copilot, enhancing user experience and improving efficiency in energy management.

Hitachi Energy: On November 12, 2024, Hitachi Energy unveiled Nostradamus AI, a cutting-edge artificial intelligence-powered energy forecasting solution. Leveraging the company's deep expertise in the energy sector, Nostradamus AI analyzes 30 years of extensive energy market data to provide precise forecasts. Designed for utilities, power system operators, energy producers, and traders, the solution optimizes decision-making across a range of energy-related applications.

Schneider Electric: On September 6, 2024, Schneider Electric introduced an AI-powered feature on its Wiser Home app, reinforcing its leadership in smart home energy solutions for homeowners, homebuilders, and electrical installers. This groundbreaking feature, the first of its kind in the market, leverages artificial intelligence to optimize energy usage for two of the highest power-consuming home appliances-water heaters and electric vehicle chargers through a unified platform, Wiser Home.

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Navistrat Analytics has segmented global AI in energy market on the basis of component, deployment, technology, application, end-use and region:

• Component (Revenue, USD Billion; 2022-2032)
o Solution
a. AI Platforms
b. AI Analytics Tools
c. Others
o Services
a. Deployment & Integration
b. Support & Maintenance
c. Consulting Service

• Deployment Outlook (Revenue, USD Billion; 2022-2032)
o On-Premises
o Cloud-Based
a. Public Cloud
b. Private Cloud
c. Hybrid Cloud

• Technology Outlook (Revenue, USD Billion; 2022-2032)
o Machine Learning (ML)
o Deep Learning
o Natural Language Processing (NLP)
o Computer Vision
o Robotic Process Automation (RPA)
o Others

• Application Outlook (Revenue, USD Billion; 2022-2032)
o Grid Management & Optimization
a. Smart Grids
b. Load Balancing
c. Demand Response
o Predictive maintenance
o Energy Demand Forecasting
o Energy Trading & Pricing Optimization
o Renewable Energy Optimization
o Smart Meter Analytics
o Carbon Emission Monitoring & Reduction
o Fraud Detection & Risk Management
o Others

• End-Use Outlook (Revenue, USD Billion; 2022-2032)
o Residential
o Commercial
o Industrial

• Regional Outlook (Revenue, USD Billion; 2022-2032)
o North America
a. U.S.
b. Canada
c. Mexico

o Europe
a. Germany
b. France
c. U.K.
d. Italy
e. Spain
f. Benelux
g. Nordic Countries
h. Rest of Europe

o Asia Pacific
a. China
b. India
c. Japan
d. South Korea
e. Oceania
f. ASEAN Countries
g. Rest of APAC

o Latin America
a. Brazil
b. Rest of LATAM

o Middle East & Africa
a. GCC Countries
b. South Africa
c. Israel
d. Turkey
e. Rest of MEA

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