San Francisco, 11 April 2024: The Report Data Annotation Tools Market Size, Share & Trends Analysis Report By Type (Text, Image/Video, Audio), By Annotation Type, By Vertical, By Region, And Segment Forecasts, 2024 - 2030

The global data annotation tools market size is expected to reach USD 5,331 million by 2030, exhibiting a CAGR of 26.5% from 2023 to 2030, according to a new report by Grand View Research, Inc. The advent of big data is expected to drive the growth of the artificial intelligence market as a large volume of data is required to be recorded, stored, and analyzed. The adoption of artificial intelligence is expected to significantly boost the demand for data annotation tools as the annotated data acts as a catalyzer to train AI models and machine learning systems in critical areas such as speech recognition and image recognition. These tools offer AI its strength by directly providing data that is relevant to determining future outcomes and decision-making.

Currently, there is a growing trend of manufacturing autonomous vehicles in the automotive industry, which is attracting larger investments for the development of these vehicles. An autonomous vehicle includes a combination of various sensors and networking systems that assist the computer in driving the vehicle. The annotated data allows autonomous vehicle computer models to recognize and learn from it. Several technology providers such as Google LLC; Tesla Motors; Apple Inc.; and Huawei Technologies Co., Ltd. have also entered the autonomous vehicle market. The rising investments in the self-driving market are expected to drive the future demand of the data annotation market. For instance, in February 2021, Appen Limited, a provider of effective training data and AI systems, announced the launch of new training data annotation and quality assurance services for autonomous vehicle manufacturers. The rising demand for self-drive cars is likely to supplement the demand for annotation tools.

Rising innovations in the retail segment, specifically in improving the e-commerce sector, using the data annotation tools is expected to drive the industry demand over the forecast period. For instance, in February 2023, Walmart Labs acquired Dataturks, an India-based data annotation start-up. Dataturks offers annotation tools for image and text data by using machine learning. The acquisition helped drive innovations in the catalog quality and other aspects of the Walmart merchandising platform.

The growth is majorly driven by the increasing adoption of image data annotation tools in the automotive, retail, and healthcare sectors. The data annotation tools enable users to enhance the value of data by adding attribute tags to it or labeling it. The key benefit of using annotation tools is that the combination of data attributes enables users to manage the data definition at a single location and eliminates the need to rewrite similar rules in multiple places. The rise of big data and the surge in the number of large datasets are likely to necessitate the use of artificial intelligence technologies in the field of data annotations. The data annotation industry is also expected to have benefited from the rising demands for improvements in machine learning as well as in the rising investment in advanced autonomous driving technology.

Request sample report of Data Annotation Tools Market@ https://www.grandviewresearch.com/industry-analysis/data-annotation-tools-market/request/rs1

Data annotation is expected to play a major role in enhancing the applications of AI in the healthcare sector. AI-backed machines use machine vision or computer vision in medical imaging data technologies to sense patterns and identify possible injuries, which assists medical practitioners in automatically generating reports after the individual is examined. The database of CT scans, MRI, and X-Ray images can be easily screened by the AI to determine various injuries. Data annotation tools help train AI systems in differentiating data obtained from normal and injured medical images to generate the final reports of the examined individuals. Thus, data annotation is expected to play a major role in enhancing the applications of AI in the healthcare sector. For instance, in March 2021, Innodata Inc., a U.S.-based company, announced its expansion of AI data annotation tools capabilities to include the medical reports of the patients. Innodata has established plans to synthesize its capabilities from the AI Data annotation tools platform and Synodex medical data extraction platform, to create a medical record data annotation platform. Via this, high-quality AI training data will be created that is likely to carry HIPAA compliance and follow all the security protocols.

Data Annotation Tools Market Report Highlights

• The text data annotation tools segment led the market in 2022, accounting for over 36% share of the global revenue. Based on type, the market is segmented into text, image/video, and audio.
• The manual segment led the market in 2022, accounting for over 81% share of the global revenue. Based on annotation type, the market is categorized into manual, semi-supervised, and automatic.
• The IT segment led the market in 2022, accounting for a 32% share of the global revenue. Based on verticals, the market has been segmented into IT, automotive, government, healthcare, financial services, retail, and others.
• North America dominated the market in 2022, accounting for over 36% share of the global revenue.

Technologies such as the Internet of Things (IoT), Machine Learning (ML), robotics, advanced predictive analytics, and Artificial Intelligence (AI) generate massive data. With changing technologies, data efficiency proves to be essential for creating new business innovations, infrastructure, and new economics. These factors have significantly contributed to the growth of the industry. Owing to the rising scope of growth in data labeling, companies developing AI-enabled healthcare applications are collaborating with data annotation companies to provide the required data sets that can assist them in enhancing their machine learning and deep learning capabilities. For instance, in November 2020, Telus International, a provider of digital customer experience (CX), and digital IT solutions & services announced to acquire Lionbridge AI, which offers training data and annotation platform solutions used for designing AI algorithms to power machine learning. The acquisition is expected to enhance Telus International’s next-generation digital solution portfolio and expand its reach worldwide.

However, the inaccuracy of data annotation tools acts as a restraint to the growth of the market. For instance, a given image may have low resolution and include multiple objects, making it difficult to label. The primary challenge faced by the market is issues related to inaccuracy in the quality of data labeled. In some cases, the data labeled manually may contain erroneous labeling and the time to detect such erroneous labels may vary, which further adds to the cost of the entire annotation process. However, with the development of sophisticated algorithms, the accuracy of automated data annotation tools is improving and thus reducing the dependency on manual annotation and the cost of the tools in the near future.

Data Annotation Tools Market Report Scope

Significant innovations by major players in the market are augmenting the degree of innovations in the data annotation tools market. Furthermore, increasing utilization of AI by a number of businesses to develop novel products and revolutionize even the most established sectors is also projected to increase the need for novel innovations over the forecast period.

Strategic mergers and acquisitions from key players are significantly fueling the market growth. In addition, the data annotation vendors are also poised for collaborations with leading tech giants in order to scale and expand their solution and service offerings to the diverse customer base. For instance, Amazon Web Services (AWS) has been chosen by Appen Limited, a source of high-quality data for the AI lifecycle, as its primary cloud for AI innovation and solutions. With a multi-year deal, the firms are deepening their collaboration as Appen creates new enterprise solutions for AI data source, model validation, and annotation.

List of Key Players of Data Annotation Tools Market

• Annotate.com
• Appen Limited
• CloudApp
• Cogito Tech LLC
• Deep Systems
• Labelbox, Inc
• LightTag
• Lotus Quality Assurance
• Playment Inc
• Tagtog Sp. z o.o
• CloudFactory Limited
• Clickworker GmbH