U.S. Data Annotation Tools Market Size, Share & Trends Analysis Report By Type (Text, Image/Video, Audio), By Annotation Type (Manual, Semi-supervised, Automatic), By Vertical, And Segment Forecasts, 2024 - 2030

U.S. Data Annotation Tools Market Trends

The U.S. data annotation tools market size was estimated at USD 242.5 million in 2023 and is anticipated to grow at a CAGR of 22.9% from 2024 to 2030. The increasing integration of mobile computing platforms and artificial intelligence in digital shopping and e-commerce is the key factor driving the market growth in the U.S. A large amount of data is produced through these platforms, which is widely used to train artificial intelligence, Internet of Things (IoT) devices, and other machine learning algorithms.

The U.S. held over 23.6% revenue share of the global data annotation tools market in 2023. The growing consumer preference for connected cars and ubiquitous mobile networks contributes significantly to the market's growth. Advancements in Vehicle-to-Everything (V2X) technologies allow vehicles to communicate with each other, pedestrians, and various public infrastructure components and utilize the data collected to manage the roads, traffic, and related infrastructure. The data generated from V2X communication can lead to safer and congestion-free roadways and enhance the driver experience. Advancements in autonomous driving technology also drive the need to establish V2X communication and utilize the data generated to advance the technology further. Sonar, radar, lidar, inertial measurement units (IMUs), cameras, high-performance/low-power CPUs, and long-lasting batteries comprise relatively mature hardware.

The growing emphasis on centralized data management is further driving the market growth. Businesses produce large volumes of structured and unstructured data, necessitating data analytics tools. Centralized data management enhances the organizational surplus by building the capacity to react to an opportunity or curtail losses when a change occurs. The degree of data centralization within the organization can impact productivity and the ability to innovate. Centralized data management opens several opportunities for a company operating in a cutthroat market. Tools for managing metadata can enhance the consistency, speed, and agility of processing business datasets. Centralizing data management can also improve access and usage of business intelligence datasets.

Type Insights

The image/video segment dominated the market with over 30% revenue share in 2023. The increasing demand for high-quality image and video data to train machine learning models, particularly in autonomous vehicles, robotics, and surveillance industries, propels market growth. It has led to more advanced image data annotation tools and platforms with object recognition, segmentation, and annotation features. Another trend in the image segment includes adopting artificial intelligence and computer vision technologies to automate the annotation process. These technologies can reduce the time and cost involved in manual annotation while improving the data's accuracy and consistency.

The audio segment is expected to witness the fastest CAGR during the forecast period. The data industry increasingly demands annotated audio data to train speech recognition and natural language processing (NLP) models. It has led to the development of more advanced audio data annotation tools and platforms, with features such as automatic transcription, speaker identification, and sentiment analysis.

Annotation Insights

The manual annotation segment dominated the market with a 74.4% revenue share in 2023.  For precise and comprehensive data annotation, human annotators are often the top resource selection for companies. Data quality is the most crucial element in establishing the annotation accuracy. Only the approved items are released for analysis after being checked for quality by knowledgeable individual data annotators. It ensures that datasets used for model training are always accurate and high-quality.

The automatic segment is anticipated to grow at the fastest CAGR during the forecast period. Relative to active learning, automated data labeling provides incredibly accurate data annotation. Additionally, the continued use of automation is to improve and advance human data annotation processes. Since there is slight (or no) human involvement in automated data annotation, industries save substantial operational time and costs they would otherwise spend to hire technical experts or create an in-house team.

Vertical Insights

The healthcare vertical held a significant revenue share of over 20% in 2023. The demand for accurately structured and tagged medical data has increased over the last few years. Accurate data annotation helps determine disease in its early stages, personalized medicine, drug discovery, and clinical decision-making. For instance, with the help of annotated data-powered AI tools, doctors can easily interpret medical images such as CT scans.

The automotive segment is expected to grow at the fastest CAGR of 25% over the forecast period. Machine Learning models require annotated data sets of videos/images of cars, traffic lights, potholes, and more to train. Thus, the demand for data annotation tools is increasing in the automotive industry. The evolution of autonomous vehicles is further expected to drive the market growth.

Key U.S. Data Annotation Tools Company Insights

The leading players undertake several strategic initiatives to strengthen their market position. These initiatives include mergers & acquisitions, collaboration, and partnership. The companies are also focusing on new product launches along with geographical expansion.

Recent Development

• In January 2023, a global human-in-the-loop AI company named CloudFactory introduced Vision AI. The product is a rapid annotation tool that clubs together CloudFactory’s workforce with leading AI-assisted annotation technologies to produce high-quality annotated data. The TAT of this product 5 times quicker than manual annotation.

U.S. Data Annotation Tools Market Report Scope

U.S. Data Annotation Tools Market Report Segmentation

This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. data annotation tools market report based on type, annotation type, and vertical:

• Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Text

  • Image/Video

  • Audio

• Annotation Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Manual

  • Semi-supervised

  • Automatic

• Vertical Outlook (Revenue, USD Million, 2018 - 2030)

  • IT

  • Automotive

  • Government

  • Healthcare

  • Financial Services

  • Retail

  • Others