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Vietnam Artificial Intelligence Market By Component (Hardware, Software, Services); By Type (Artificial Narrow Intelligence (ANI), Artificial General Intelligence (AGI), Artificial Superintelligence (ASI), Others); By Application (Speech Recognition, Machine Learning Platforms, Robotic Process Automation (RPA), Text Analytics and Natural Language Processing (NLP), Others); By Deployment (Cloud-Based, On-premises); By End-user (Healthcare, Education, BFSI, Agriculture, Automotive and Transportation, IT and Telecommunication, Government and Defence, Others); By Region – Growth, Share, Opportunities & Competitive Analysis, 2024 – 2032

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Published: | Report ID: 39341 | Report Format : PDF
REPORT ATTRIBUTE DETAILS
Historical Period 2019-2022
Base Year 2023
Forecast Period 2024-2032
Vietnam Artificial Intelligence (AI) market Size 2023 USD 544.26 million
Vietnam Artificial Intelligence (AI) market, CAGR 15.80%
Vietnam Artificial Intelligence (AI) market Size 2032 USD 1759.85 million

Market Overview

The Vietnam Artificial Intelligence (AI) market is experiencing significant growth, with the size of the market projected to increase substantially in the coming years. The Vietnam Artificial AI Market is projected to grow from USD 544.26 million in 2023 to an estimated USD 1759.85 million by 2032, reflecting a robust compound annual growth rate (CAGR) of 15.80% from 2024 to 2032. This forecast underscores the increasing integration of AI technologies across various sectors, driven by the growing demand for automation and efficient data management.

Market drivers for Vietnam’s AI sector include the rapid digitization of industries, government support for technology startups, and an increasing emphasis on enhancing operational efficiencies. Additionally, trends such as the adoption of cloud-based services and the Internet of Things (IoT) are propelling the market forward. These factors are not only fostering innovation but are also creating a fertile ground for the development and application of AI technologies. As businesses and government entities continue to realize the potential benefits of AI, such as cost reduction, improved customer experiences, and enhanced decision-making, the market is set to expand even further.

Geographically, the major cities of Hanoi and Ho Chi Minh City are the epicenters of AI development in Vietnam, hosting a vibrant ecosystem of startups and established technology firms. Key players in the Vietnam AI market include global tech giants as well as promising local startups that are making significant strides in AI research and development. These companies are actively collaborating with academic institutions and are supported by government initiatives aimed at fostering innovation and technological advancement in the country. As these efforts continue, Vietnam is poised to become a significant player in the global AI landscape, attracting further investment and promoting technological innovation.

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Market Drivers

Government Initiatives and Support:

The Vietnamese government has been highly supportive of digital transformation and technology integration across various sectors. For instance, the Vietnamese government has launched over 50 initiatives related to digital transformation and technology integration across various sectors, like the National Strategy on Research, Development and Application of Artificial Intelligence, which was approved until 2030, demonstrate a strong commitment to fostering an environment conducive to AI development. This strategic framework not only prioritizes the advancement of AI technologies but also aims to create a robust digital infrastructure that can support innovative applications of AI. By providing regulatory support, funding, and incentives, the government is actively facilitating a thriving AI ecosystem that attracts both local and international investors.

Increasing Demand for Automation and Efficiency in Manufacturing:

Vietnam’s manufacturing sector, being one of the largest contributors to the national economy, is increasingly adopting AI to enhance operational efficiency and productivity. For instance, Vietnam’s manufacturing sector, which contributes to about 30% of the national economy, has seen a 15% increase in the adoption of AI technologies in the past five years.  The push towards Industry 4.0 has led to the implementation of AI-driven solutions such as predictive maintenance, supply chain optimization, and robotics automation. These applications not only reduce downtime and operational costs but also improve the quality and speed of manufacturing processes. As manufacturers seek to stay competitive on a global scale, the integration of AI technologies becomes a key driver in transforming production lines and achieving higher levels of efficiency.

Rapid Digitalization of Services and Infrastructure:

The rapid digital transformation in Vietnam, especially in urban areas, facilitates the adoption of AI in various domains including finance, healthcare, and consumer services. For instance, the rate of digital transformation in Vietnam in urban areas, has increased by 40% in the last decade.  Financial institutions are leveraging AI for fraud detection, risk management, and customer service automation, while the healthcare sector is exploring AI for diagnostics, patient management, and personalized treatment plans. This widespread digitalization not only necessitates the adoption of advanced AI technologies but also ensures a continuous demand for innovations that can seamlessly integrate into existing digital frameworks.

Talent Development and Academic Collaboration:

Vietnam is increasingly focusing on developing a skilled workforce capable of supporting its burgeoning AI industry. Universities and research institutions in Vietnam are expanding their AI programs and collaborating with industry leaders to bridge the gap between academic learning and practical, industry-specific applications. This emphasis on education and skill development ensures a steady supply of AI professionals, which is critical for sustained innovation and growth in the AI sector. Furthermore, these collaborations often lead to groundbreaking research and development activities that push the boundaries of what AI can achieve in both local and global contexts.

Market Trends

Expansion of AI in Healthcare:

The healthcare sector in Vietnam is rapidly adopting AI technologies to improve diagnostics, patient care, and operational efficiencies. AI-driven applications such as image recognition for diagnostic imaging and algorithms for personalized medicine are becoming increasingly prevalent. For instance, the use of AI technologies in the healthcare sector has seen a 25% increase in the past five years. This trend is accelerating as the demand for more sophisticated healthcare solutions grows, driven by an aging population and the need for preventive medicine.

Growth of AI-Enabled Financial Services:

AI is transforming the financial services industry in Vietnam by enhancing capabilities in risk assessment, customer service, and fraud detection. For instance, the use of AI in the financial services industry has resulted in a 40% improvement in risk assessment capabilities and a 50% reduction in fraud detection time.Banks and fintech companies are employing AI to develop chatbots that provide 24/7 customer service and algorithms that offer personalized financial advice, significantly improving customer engagement and operational efficiency.

Smart Cities and IoT Integration:

Major cities in Vietnam are investing in smart city initiatives. For instance, major cities in Vietnam have invested in over 20 smart city initiatives that integrate AI with the Internet of Things (IoT) to manage urban services such as traffic control, public safety, and waste management. These projects utilize AI to analyze vast amounts of data generated by IoT devices, enabling more efficient city management and improving the quality of life for residents.

AI in Agriculture:

AI applications in agriculture are gaining traction as they provide solutions for increasing crop yield and monitoring crop health through data analytics and drone technology. For instance, AI applications in agriculture have increased crop yield by 20% and improved monitoring of crop health by 30% through data analytics and drone technology. This trend is particularly significant in Vietnam, a country where agriculture plays a crucial role in the economy and employment.

Educational Technologies (EdTech):

AI is increasingly being integrated into educational platforms to provide personalized learning experiences and to automate administrative tasks. AI-driven EdTech solutions are helping to transform the educational landscape in Vietnam by facilitating adaptive learning programs and enhancing student engagement.

Increased AI Startups and Innovation Hubs:

The startup ecosystem in Vietnam is vibrant, with a growing number of AI startups emerging each year. Innovation hubs and incubators are supporting these startups by providing the necessary resources, mentorship, and funding to innovate and scale AI solutions.

Government and Private Sector Partnerships:

Collaborations between the government and private sector are fostering the growth of the AI market in Vietnam. These partnerships are crucial for advancing AI research and development, as well as for implementing national AI strategies that aim to position Vietnam as a leader in AI technology in the region.

Market Restraints and Challenges

Limited Infrastructure for Advanced Technology:

One of the primary challenges facing the Vietnam AI market is the limited technological infrastructure, which can be inadequate for supporting advanced AI applications. The deployment of AI requires robust digital and data infrastructures, including high-speed internet connectivity and data centers, which are still underdeveloped in many parts of Vietnam. This limitation affects the scalability and effectiveness of AI solutions, particularly in rural and remote areas.

Shortage of Skilled AI Professionals:

Although Vietnam is making strides in education and training for digital skills, there remains a significant gap in the availability of AI-specific expertise. The shortage of skilled AI professionals is a critical bottleneck that can impede the development and implementation of AI technologies. This talent gap also affects the country’s ability to innovate and develop home-grown AI solutions that cater to local needs and conditions.

Data Privacy and Security Concerns:

As AI systems rely heavily on data, concerns regarding data privacy and security are prominent. The absence of comprehensive data protection regulations in Vietnam complicates the adoption of AI, as businesses and consumers remain cautious about data misuse and breaches. Establishing robust legal frameworks and standards for data security and privacy is imperative to build trust and encourage the broader adoption of AI technologies.

Lack of Awareness and Understanding of AI:

There is a general lack of awareness and understanding of AI technologies among many Vietnamese businesses and the wider population. This lack of familiarity can lead to skepticism and slow adoption rates as potential users are unsure about the benefits and implications of integrating AI into their operations. Educational campaigns and more transparent communication about AI’s potential and practical applications are needed to overcome this challenge.

Dependency on Foreign AI Technologies:

Currently, Vietnam’s AI market is heavily reliant on foreign technologies and platforms, which can limit the growth of the local AI industry and its ability to innovate independently. The dependence on external AI solutions not only affects the trade balance but also poses a risk of technological lock-in, where local businesses become dependent on specific foreign technologies without developing their own.

Ethical and Social Implications:

The rapid deployment of AI also raises ethical and social concerns, including job displacement due to automation and biases embedded in AI algorithms. Addressing these issues is crucial to ensure that AI development benefits all segments of society and does not exacerbate inequalities.

Market Segmentation Analysis

By Component

The Vietnam AI market comprises three key components: hardware, software, and services. Hardware includes AI processors and chips, essential for building the physical infrastructure for AI systems. Software encompasses AI platforms and solutions, providing the necessary frameworks and algorithms for developing AI applications. Services involve installation, maintenance, and training, which are crucial for supporting the deployment and operation of AI systems. These components collectively form the backbone of the AI industry, facilitating the development and implementation of AI technologies across various sectors.

By Type

Artificial Narrow Intelligence (ANI) focuses on specific tasks and is the most widely implemented type of AI in Vietnam, used in applications such as voice recognition and customer service automation. Artificial General Intelligence (AGI), still in its developmental phase, aims to understand, learn, and apply knowledge across a range of tasks, similar to human intelligence. Artificial Superintelligence (ASI) represents an advanced stage of AI that surpasses human intelligence and capability, which remains theoretical and not yet implemented. Other types of AI include emerging and specialized applications that cater to niche needs.

By Application

AI applications in the Vietnam market are diverse and impactful, significantly enhancing business operations and customer experiences. Speech recognition is widely used in customer service to automate and improve interactions. Machine learning platforms enable businesses to develop customized AI solutions, leveraging predictive analytics and data modeling for better decision-making. Robotic Process Automation (RPA) streamlines routine and repetitive tasks, boosting operational efficiency. Text analytics and Natural Language Processing (NLP) analyze and interpret human language, providing valuable insights from text data. Additionally, other AI applications like image recognition and fraud detection further extend the capabilities of businesses, ensuring comprehensive technological integration.

By Deployment

Cloud-based AI solutions are gaining popularity among businesses in Vietnam due to their scalability, easier maintenance, and lower upfront costs. In contrast, on-premises AI solutions are preferred by organizations that require greater control over their data and systems, particularly those with stringent data security requirements.

By End-user

AI in Vietnam spans various sectors, revolutionizing each with its capabilities. In healthcare, AI enhances diagnostics, patient management, and medical research. The education sector benefits from personalized learning experiences and administrative automation. In the BFSI sector, AI is crucial for fraud detection, risk management, and personalized customer service. Agriculture sees improvements in crop yield optimization and health monitoring through AI applications. The automotive and transportation industries leverage AI for autonomous driving and logistics optimization. In IT and telecommunications, AI manages network operations and enhances customer service. Government and defense sectors use AI for surveillance, security operations, and public administration. Additionally, sectors such as retail, manufacturing, and entertainment are increasingly adopting AI for various innovative applications.

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Segments

Based on Component

  • Hardware
  • Software
  • Services

Based on Type

  • Artificial Narrow Intelligence (ANI)
  • Artificial General Intelligence (AGI)
  • Artificial Superintelligence (ASI)
  • Others

Based on Application

  • Speech Recognition
  • Machine Learning Platforms
  • Robotic Process Automation (RPA)
  • Text Analytics and Natural Language Processing (NLP)
  • Others

Based on Deployment

  • Cloud-Based
  • On-premises

Based on End-user

  • Health Gertives
  • Education
  • BFSI
  • Agriculture
  • Automotive and Transportation
  • IT and Telecommunication
  • Government and Defence
  • Others

Regional Analysis

Northern Vietnam (45%):

Northern Vietnam, particularly the capital city of Hanoi, serves as a key technology hub for the country. The region boasts a robust ecosystem supported by government policies favoring technological advancements and innovation. Many of Vietnam’s major universities and research institutions are located here, contributing to a vibrant AI development scene. These institutions often collaborate with tech companies on AI projects, particularly in the fields of public sector digitalization and educational technologies. The presence of high-tech parks and a supportive regulatory environment further catalyze AI research and commercialization.

Southern Vietnam (35%):

Southern Vietnam, led by Ho Chi Minh City, is a commercial powerhouse where AI is being aggressively adopted across various sectors, including finance, retail, and telecommunications. The region features a dynamic startup ecosystem, with numerous startups and venture capital firms investing in AI technologies. Ho Chi Chuyen City is particularly notable for its focus on integrating AI into banking and financial services, as well as in retail operations where consumer-facing AI applications like chatbots and customer analytics are prevalent. The region’s open economic policies and its role as a gateway to international markets also contribute significantly to its AI market share.

Key players

  1. FPT Corporation
  2. VinAI Research
  3. Viettel Group
  4. VNG Corporation
  5. Zalo AI
  6. Cinnamon AI
  7. DataAI
  8. Renova Cloud
  9. Bkav Corporation
  10. TMA Solutions

Competitive Analysis

The competitive landscape of the Vietnam Artificial Intelligence (AI) market is marked by a mix of local giants and emerging startups, each contributing to the vibrant AI ecosystem. FPT Corporation and Viettel Group lead with extensive R&D resources and strong governmental ties, facilitating large-scale digital transformation projects. Emerging players like VinAI Research and Zalo AI are distinguishing themselves with cutting-edge innovations in machine learning and natural language processing. The market is also witnessing increased collaboration among firms to leverage respective strengths, such as combining AI with cloud solutions, enhancing competitiveness and driving innovation. As these key players continue to expand their AI capabilities, they significantly push forward the technological frontiers, securing Vietnam’s position on the global AI map.

Recent Developments

In July 2023, VinAI, Viettel IDC, and Qualcomm collectively organized an event to establish a Strategic Cooperation Agreement in Vietnam. This agreement emphasizes collaborative efforts in AI research and development to enhance local AI capabilities. Viettel IDC will incorporate VinAI’s advanced AI solutions into their offerings, utilizing Qualcomm’s platforms. This strategic partnership is set to introduce innovative AI camera solutions to Viettel IDC’s clientele in the near future, significantly advancing the technological landscape in Vietnam’s AI sector.

In January 2023, VinBrain, an AI-focused healthcare company under Vietnam’s leading conglomerate Vingroup, entered into a strategic collaboration with Microsoft. Through this partnership, VinBrain will deploy its AI-driven pathology solution suite, DrAid, which is capable of identifying 21 different disease markers in cardiac, pulmonary, and skeletal systems. This initiative not only enhances VinBrain’s product offerings but also positions the company at the forefront of AI-powered healthcare innovations in Vietnam.

In April 2022, KT Corp, a major telecommunications provider, partnered with Hanoi Medical University (HMU) to launch a pilot telemedicine service targeting chronic disease patients in Vietnam. This collaboration aims to develop services for managing chronic diseases, further medical AI research, and provide training for local healthcare professionals. By integrating AI and telemedicine technologies, KT Corp and HMU are paving the way for more sophisticated and accessible healthcare solutions in the region.

Market Concentration and Characteristics 

The Vietnam Artificial Intelligence (AI) market is characterized by a moderate to high level of market concentration, with a few major players such as FPT Corporation, Viettel Group, and VinAI Research dominating the landscape. These key players are pivotal in shaping market trends through substantial investments in research and development, and by forging strategic partnerships with global tech giants. This concentration is complemented by a burgeoning ecosystem of startups that inject innovation and diversity into the market. The interplay between established corporations and dynamic new entrants creates a vibrant competitive environment, driving the development of tailored AI solutions that cater to a wide array of industrial and consumer needs. Overall, the market is characterized by rapid technological advancements, government support, and a growing adoption of AI across various sectors, which together fuel the continued expansion and sophistication of AI capabilities within Vietnam.

Report Coverage

The research report offers an in-depth analysis based on Component, Type, Application, Deployment and End-user. It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.

Future Outlook

  1. The Vietnamese government is expected to continue its investment in AI, aiming to establish the country as a major AI hub in Southeast Asia through favorable policies and funding.
  1. Initiatives to enhance AI-focused education and training programs are anticipated to produce a highly skilled workforce, addressing the current talent shortage in the AI sector.
  1. AI integration in healthcare is projected to grow, with new applications emerging for disease diagnosis and patient management, driven by the need for more efficient healthcare solutions.
  1. The financial sector is likely to see broader adoption of AI for risk management, customer service automation, and fraud detection, enhancing operational efficiencies and customer experiences.
  1. Investment in AI-driven smart city solutions is expected to increase, particularly in urban centers like Hanoi and Ho Chi Minh City, improving public services and infrastructure management.
  1. Technological advancements in AI hardware, including processors and sensors, will enhance the performance and capabilities of AI systems, fostering more robust and reliable AI applications.
  1. The growth and support of local AI startups are anticipated to strengthen, driven by increased funding and strategic partnerships, contributing to a more vibrant AI ecosystem.
  1. With the increasing use of AI, stronger data privacy and security regulations are expected to be implemented, ensuring safer and more responsible use of AI technologies.
  1. More cross-industry collaborations involving AI are likely to occur, enabling innovations that can benefit multiple sectors simultaneously, from agriculture to automotive.
  1. Enhanced international collaboration in AI research and development is forecasted, helping Vietnam to tap into global knowledge and trends, and positioning it as an important player in the international AI community.

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 Frequently Asked Question

What is the projected growth of the Vietnam AI market?

The Vietnam AI market is projected to grow from USD 544.26 million in 2023 to USD 1759.85 million by 2032, reflecting a compound annual growth rate (CAGR) of 15.80%.

What are the main drivers of the AI market in Vietnam?

Key drivers include rapid digitization, government support for technology startups, and increasing demand for automation and operational efficiencies across various sectors.

Which sectors are leading in AI adoption in Vietnam?

Healthcare, finance, and manufacturing are at the forefront of AI adoption, utilizing AI for diagnostics, fraud detection, and operational optimization respectively.

How is the government supporting AI development in Vietnam?

The Vietnamese government supports AI through strategic initiatives, regulatory frameworks, funding, and incentives aimed at fostering a robust AI ecosystem and encouraging innovation.

What are the main challenges facing the AI market in Vietnam?

Challenges include limited technological infrastructure, a shortage of skilled AI professionals, data privacy concerns, and dependency on foreign AI technologies.

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