AI in Agriculture: Market Expected to Reach USD 12.8 Billion by 2032

The adoption of artificial intelligence (AI) in agriculture is projected to propel the market size to USD 12.8 billion by 2032, according to a report by SNS Insider released on June 29, 2025. This growth, representing a compound annual growth rate (CAGR) of 24.34% from 2024 to 2032, is driven by the increasing demand for climate-smart practices and yield optimization tools that enhance productivity and resource efficiency in farming.

In 2023, the market was valued at USD 1.8 billion, with the U.S. accounting for USD 0.5 billion of this total. The U.S. market is expected to reach USD 3.4 billion by 2032, growing at a CAGR of 24.03% (SNS Insider, 2025). This substantial growth is attributed to early adoption of technology, favorable federal government policies, and significant investments in agricultural research and smart farming practices.

The report identifies several key players in the artificial intelligence in agriculture market, including IBM Corporation, which offers the Watson Decision Platform for Agriculture, and Microsoft Corporation with its Azure FarmBeats technology. Other notable participants include Deere & Company, Trimble Inc., and BASF SE, all of which are developing advanced AI tools tailored for agricultural applications.

AI tools are increasingly utilized for crop monitoring, predictive analytics, and improving climate resilience. According to Dr. Emily Carter, a researcher at the University of California, Davis, “AI technologies can significantly enhance decision-making processes in agriculture, enabling farmers to optimize their operations and respond more effectively to environmental changes.”

The market is segmented into components, technologies, and applications. The software segment dominated in 2023, accounting for 55% of the revenue share, largely due to the demand for AI-embedded devices such as smart sensors and edge devices. The hardware segment, particularly in the context of drones and automated irrigation systems, is expected to experience the fastest growth (SNS Insider, 2025).

By technology, machine learning and deep learning constituted 47% of the market share in 2023. These technologies facilitate pattern recognition in crop data, which is essential for yield forecasting and soil analysis. Conversely, computer vision is anticipated to be the fastest-growing segment, enabling applications in pest detection and weed identification (SNS Insider, 2025).

Geographically, North America dominated the AI in agriculture market, holding a 36% revenue share in 2023. The region's strong digital infrastructure and early adoption of advanced farming technologies are key factors for this leading position. Meanwhile, the Asia-Pacific region is projected to register the fastest CAGR due to rising food security concerns and increased investment in agri-tech startups, particularly in countries like India and China.

Recent developments in AI for agriculture include IBM’s launch of an AI-based weather forecasting tool designed for small-scale farmers in Africa and South Asia, and John Deere's partnership with NVIDIA to create real-time AI analytics for self-driving tractors (SNS Insider, 2025).

The implications of these advancements are significant, as AI technologies promise to revolutionize traditional farming practices by enhancing efficiency, reducing waste, and ultimately contributing to global food security. As the industry moves forward, the integration of AI in agriculture is expected to play a crucial role in achieving sustainable farming practices that can meet the demands of a growing global population.

In conclusion, the artificial intelligence in agriculture market is on a robust growth trajectory, driven by technological advancements and increasing investments in smart farming solutions. As stakeholders continue to embrace AI for its potential to optimize agricultural productivity and sustainability, the future landscape of farming is set to transform dramatically over the next decade.