The global data annotation tools market size was estimated at USD 1.02 billion in 2023 and is anticipated to grow at a CAGR of 26.3% from 2024 to 2030. 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 a 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.

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 potential of growth in data annotation, 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 2022, Medcase, a developer of healthcare AI solutions, and NTT DATA, formalized a legally binding agreement. Under this partnership, the two companies announced their collaboration to offer data discovery and enrichment solutions for medical imaging. Through this partnership, customers of Medcase will gain access to NTT DATA's Advocate AI services. This access enables innovators to obtain patient studies, including medical imaging, for their projects.

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 thus reducing the dependency on manual annotation and the cost of the tools.

Global Data Annotation Tools Market Report Segmentation

Grand View Research has segmented the global data annotation tools market report based on type, annotation type, vertical, and region:

• Type Outlook (Revenue, USD Million, 2017 - 2030)
  • Text
  • Image/Video
  • Audio
• Annotation Type Outlook (Revenue, USD Million, 2017 - 2030)
  • Manual
  • Semi-supervised
  • Automatic
• Vertical Outlook (Revenue, USD Million, 2017 - 2030)
  • IT
  • Automotive
  • Government
  • Healthcare
  • Financial Services
  • Retail
  • Others
• Regional Outlook (Revenue, USD Million, 2017 - 2030)
  • North America
    • US
    • Canada
    • Mexico
  • Europe
    • Germany
    • UK
    • France
  • Asia Pacific
    • China
    • Japan
    • India
  • South America
    • Brazil
  • Middle East and Africa (MEA)

Key Data Annotation Tools Companies:

The following are the leading companies in the data annotation tools market. These companies collectively hold the largest market share and dictate industry trends.

• 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
• Alegion
• Figure Eight Inc.
• Amazon Mechanical Turk, Inc
• Explosion AI GMbH
• Mighty AI, Inc.
• Trilldata Technologies Pvt Ltd
• Scale AI, Inc.
• Google LLC
• Lionbridge Technologies, Inc
• SuperAnnotate LLC

Recent Developments

• In November 2023, Appen Limited, a high-quality data provider for the AI lifecycle, chose Amazon Web Services (AWS) as its primary cloud for AI solutions and innovation. As Appen utilizes additional enterprise solutions for AI data source, annotation, and model validation, the firms are expanding their collaboration with a multi-year deal. Appen is strengthening its AI data platform, which serves as the bridge between people and AI, by integrating cutting-edge AWS services.
• In September 2023, Labelbox launched Large Language Model (LLM) solution to assist organizations in innovating with generative AI and deepen the partnership with Google Cloud. With the introduction of large language models (LLMs), enterprises now have a plethora of chances to generate new competitive advantages and commercial value. LLM systems have the ability to revolutionize a wide range of intelligent applications; nevertheless, in many cases, organizations will need to adjust or finetune LLMs in order to align with human preferences. Labelbox, as part of an expanded cooperation, is leveraging Google Cloud's generative AI capabilities to assist organizations in developing LLM solutions with Vertex AI. Labelbox's AI platform will be integrated with Google Cloud's leading AI and Data Cloud tools, including Vertex AI and Google Cloud's Model Garden repository, allowing ML teams to access cutting-edge machine learning (ML) models for vision and natural language processing (NLP) and automate key workflows.
• In March 2023, has released the most recent version of Enlitic Curie, a platform aimed at improving radiology department workflow. This platform includes Curie|ENDEX, which uses natural language processing and computer vision to analyze and process medical images, and Curie|ENCOG, which uses artificial intelligence to detect and protect medical images in Health Information Security.
• In November 2022, Appen Limited, a global leader in data for the AI Lifecycle, announced its partnership with CLEAR Global, a nonprofit organization dedicated to ensuring access to essential information and amplifying voices across languages. This collaboration aims to develop a speech-based healthcare FAQ bot tailored for Sheng, a Nairobi slang language.

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