The global AI Terminal Market is projected to reach USD 179.2 billion by 2035, up from approximately USD 20 billion in 2025, growing at a CAGR of 24.4% during the forecast period. The market was valued at USD 16.5 billion in 2024.

Market Overview

The rising demand for Edge AI computing and real-time processing is completely transforming the way companies communicate and engage with their customers. Companies across a multitude of industries are quickly deploying smart terminals in retail environments and health care facilities in order to create enhanced customer experiences and lower operating costs. The growing presence of AI assistants and integration of voice commands makes these terminals easier and more accessible now more than ever!

Digital transformation and smart city building are being driven by global government initiatives, as well as a continuing development of IoT infrastructures and ecosystems of connected devices that are creating unique opportunities for AI terminals to develop intelligent gateways between the digital and physical experiences. AI terminals will serve as focal points in highly visible public services, transportation hubs and local urban infrastructure initiatives.

The market faces considerable challenges that organizations need to navigate carefully. Smaller companies and developing markets find it cumbersome to sustain enough called-up cash and invest in developing AI terminal solutions. The implications of data security and the considerations of privacy in respect of AI-enabled terminal applications are complex and require advanced protection features and compliance policies and processes. Technical limitations like processing power, battery life and usability will constantly be a relief for engineers and system designers. The complications of merging AI models and optimizing system performance require specialized knowledge and skills that most markets are still lacking.

Despite the challenges, the market presents the most exciting and untapped potential. The rollout of 5G networks has enabled a new generation of AI terminals that provide improved connectivity and real-time processing capabilities. The increase in autonomous mobility solutions and smart transport systems has highlighted a need for more advanced in-vehicle AI terminals. The adoption of AI-powered kiosks and self-service solutions are transforming customer service operations in multiple industries.

Combining computer vision and sensor technologies is expanding the ability of terminals to read and respond to human activity in increasingly complicated ways. New applications in industrial automation and intelligent manufacturing are creating new market niches where AI terminals are becoming decision-making hubs in production workflows.

Transformational tech trends are altering the competitive landscape in dramatic ways. As AI capability moves into smaller form factors due to advances in power-efficient AI chips, AI application is set to explode. The combination of AI with augmented reality, virtual reality, and mixed-reality technologies has opened up user experience creation possibilities that do not resemble the user experience of only three years ago. The use of federated learning and distributed processing of AI is making terminals intelligent while protecting user privacy and minimizing the use of bandwidth resources.

Global AI Terminal Market Trends and Insights

Market Drivers

Rising Demand for Edge AI Computing and Real-Time Processing

The move toward edge computing is one of the most impactful changes in technology since the internet. According to Gartner's 2024 Strategic Technology Trends report, by 2025, approximately 75% of enterprise-created data will be processed at or near the edge, up from about 10% in 2018. This rapid shift has created an increased demand for AI terminals that can run sophisticated AI algorithms on-site, and that don't deplete bandwidth through connections to the cloud.

Local edge AI processing saves 85% to 95% on latency compared to cloud-only solutions. Edge AI processing enables real-time decision making in mission-critical applications where every millisecond matters. For example, retail environments will be able to use AI terminals to provide real-time analytics on how customers move through physical spaces, assess inventory levels per store with accuracy, and personalize shopping experiences instantly. Similarly, healthcare facilities will be able to use AI terminals as patient monitors, as well as diagnostic assistants—applications where time is of the essence and can save lives.

This shift highlights the emergence of customer-facing AI terminals as important foundational technologies in edge computing that empower enterprises to realize low-latency, effective, and dependable AI-centric businesses.

The economic advantages of adopting edge AI terminals are significant. Many organizations report reduced bandwidth expenses and greater system reliability based on diminished dependence on cloud-connected journeys, with many real-world examples demonstrating double-digit percentage reductions in costs and resilience from local processing. Manufacturing companies that use AI terminals for quality control and predictive maintenance often see significant reductions in downtime – usually 20-30% – and significant improvements in product quality. The COVID-19 pandemic accelerated adoption as businesses focused on contactless and autonomous solutions that can operate under unstable network connections, which are continuing to this day, due to the operational benefits of edge AI in mission-critical contexts.

Increasing Adoption of Smart Terminals in Retail and Healthcare

The retail sector is undergoing a massive shift due to AI terminals that turn every interaction with customers into a chance to improve services and also collect valuable data. Retailers today are increasing the use of AI terminals for not just automated checkout but even personalized recommendations to be made to customers. Recent surveys from the National Retail Federation among several other retail analyst firms report that about 65-70% of retailers now are committing considerable funds towards customer-facing AI powered interface technologies.

Smart terminals in retail have proven their worth in some measurable way through better customer engagement and operational efficiency. Individual examples can demonstrate customer engagement time increases of 30-45%, as well as common improvements in conversion rates anywhere between 15-30%. These AI powered terminals are usually multi-lingual, quickly adapt to customer preferences and are able to provide the service 24/7, which can lessen dependance on other staffing models.

There has also been an acceleration of AI terminal adoption in healthcare, which are changing the way patient care is delivered and implementing front-office workflows. Hospitals and clinics are starting to implement AI terminals to check-in patients, do preliminary symptom assessments, and give ongoing treatment plans. These AI terminal systems can also do initial health screening, vital signs collection and sync up with electronic health records (EHR), thus increasing efficiency of care administration and access.

The advantages of AI terminals in healthcare settings extend beyond efficiencies. These terminals promote better accuracy in diagnosis. As a result, patients could end up with improved diagnosis with consistent assessments, and standardized assessments reduce human error. Additionally, they promote better access by providing additional languages and accommodation for patients with disabilities. Many healthcare organizations have reported data showing implementations of AI terminals have reduced patient wait times by as much as 25% to 40% and increased patient satisfaction scores by 30% to 50%. Although the results may vary by use case and use of the AI terminal, the potential is still tremendous!

Table: Key Factors Impacting Global AI Terminal Market (2025–2035)

Base CAGR: 24.4%

Market Segmentation Analysis

By Component

The AI terminal market is segmented by component: hardware, software, and services. The hardware segment is the largest segment by value (45-50% of the overall market value) in 2025. Hardware has the largest market share because it requires such a large investment in advanced processors, sensors, displays, and other physical components that provide the foundation for terminal AI functionality.

The software segment is expected to grow at the highest compound annual growth rate (CAGR) during the projected period from 2025 to 2035. This growth is due to the greater sophistication of algorithms, the criticality of differentiating software in crowded markets, the shifting to software as a service or product as a service (e.g., terminal operating and value-added services), and ongoing digital updates and feature enhancements over the life of the terminal.

While the services segment has a comparatively small market share in terms of overall value, it constitutes a meaningful component of the overall AI terminal ecosystem (i.e., installation, maintenance, training, continuous support services) and ensures that terminals perform optimally and users derive satisfaction from the terminal use.

By AI Functionality

Considering the functionality of the AI, the AI terminal market segments include computer vision, voice and natural language processing, predictive analytics and fore-casting, multi-modal AI, and decision making and edge inference execution. Computer vision is expected to contribute the largest segment share (35%-40%) to the AI terminal market in 2025. This expected share illustrates the strong, growing demand to integrate facial recognition, object detection, and various visual analytics capabilities across ubiquitous applications such as retail, security, and even some healthcare solutions.

On the other hand, the multi-modal AI segment is expected to grow at the fastest CAGR throughout the forecast period. The increased demand for multi-modal AI terminals drives this increase in market growth and represents the industry's current focus on terminal developments that can consume visual, auditory, and sensory data inputs and synthesize a more complete and precise response. Multi-modal AI terminals represent the future of human-machine interaction, allowing terminals to understand context and intent across multiple channels of input, ultimately providing users a more natural and effective experience.

By Deployment Model

As per deployment model, the market for AI terminals is divided into fixed AI terminals, mobile/portable AI terminals, on-premise vs edge-native terminals, and hybrid AI terminal solutions. By 2025, the fixed AI terminals segment will have a share of around 40-45%, as AI terminals will be deployed commonly across retail stores, healthcare facilities, and other public spaces, which provides the operational performance of having a permanent installation for functionality and security.

However, the hybrid AI terminal solutions segment, which is clearly identified on the basis of organizational need for both flexibility to change application both in deployment and operation, is expected to realize the highest CAGR during the forecast period. Hybrid solutions allow customers to enjoy both fixed AI terminals, providing the stability of permanence, and the flexibility of mobile deployment, which is highly attractive to those businesses who wish to deploy both permanent and temporary AI terminal capability.

By Industry Vertical

The AI terminal market is categorized by industry verticals into smart retail and e-commerce, healthcare and medical diagnostics, banking and financial services, public safety and smart cities, transportation and automotive, manufacturing and industrial automation, education and digital learning, and hospitality and customer experience centers. In 2025, the smart retail and e-commerce category is forecasted to dominate the overall market with around 25-30% share due to retailers' urgent need to enhance their customer's experience and keep pace with the convenience of shopping online.

Alternatively, the healthcare and medical diagnostics category is anticipated to achieve the highest CAGR in the five-year forecast period of 2025-2035 as a result of the following: (i) continued emphasis on patient-centered care; (ii) improved systems of health care delivery; (iii) the integration of AI diagnostics into mainstream medical practice; and (iv) expanding use of technology-based health and wellness services by both medical professionals and patients.

Regional Analysis

From a geography perspective, the AI terminal market is segmented into North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa. North America market is expected to hold 40-45% share of the global AI terminal market in 2025. North America replicates its leadership across many categories, driven by highest AI adoption rates globally, extensive levels of venture capital investment into AI startups, early enterprise adoption of highly technical products, leading AI companies like NVIDIA, Google, and Microsoft fostering innovating in AI terminal technologies.

North America is well-positioned due to its mature digital infrastructure, high purchasing power enabling higher-end AI terminals, and to high regulation institutions that need compliant solutions. North America leads multiple sectors, such as healthcare and financial services, where AI terminal usage and potential is growing dramatically. North America is also the largest pilot in new AI terminal application development before rolling out globally.

Nonetheless, the Asia-Pacific region will exhibit the highest CAGR during the forecast period of 2025-2035, primarily due to massive public-sector investment in smart city programs, growing middle class populations with more digital adoption, the largest manufacturing deep pool of AI terminal hardware, and strong digital transformation agendas in countries such as China, India, and South Korea. The sheer sizes of the populations and the rapid urbanization of the region are resulting in unprecedented market demand for AI terminal deployments in retail, public transport, and public services.

Competitive Landscape

The AI terminal market is highly competitive, with technology companies, AI companies, and hardware vendors all competing for the same market share. The competitive landscape consists of leading technology companies and wholesale hardware vendors who are adapting their business models to the AI revolution along with AI companies.

Key players in the global AI terminal market are Huawei Technologies Co, Ltd.; ZTE Corporation; SenseTime Group Inc.; Megvii Technology Limited; Horizon Robotics Inc.; YITU Technology; Terminus Technologies; Unisound AI Technology Co, Ltd.; iFlytek Co. Ltd.; Cambricon Technologies Corp., Ltd.; Rockchip Electronics Co., Ltd.; MediaTek Inc.; Advantech Co, Ltd.; ADLINK Technology Inc.; Axiomtek Co., Ltd.; Lenovo Group Ltd.; NVIDIA Corporation (Jetson Platforms); Neousys Technology Inc.; and IEI Integration Corp.

Each of these companies are pursuing various strategies to enhance their competitive positioning. Chinese manufacturers such as Huawei and SenseTime are taking advantage of their sizeable and dominant domestic market positions, together with political backing from national governments, to make their mark on international markets. Some chip makers, like NVIDIA and MediaTek, have focused on ensuring their powerful, compatible yet energy-efficient processing platforms enable more advanced artificial intelligence capabilities. For those companies who focus on industrial computing, like Advantech and ADLINK, their approach has been to utilize their existing knowledge and development capabilities to take former platforms and develop artificial intelligence terminals suited for the stringent demands of difficult operating environments.

AI Terminal Market Report Summary:

Key Questions Answered in the Report: