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Trends · 2 November '21

Why Artificial Intelligence of Things (AIoT) is Emerging as the Future of Industry Innovation

Synergy refers to a natural combination of technologies that can significantly impact the future of industry. The combination of Artificial Intelligence (AI) and Internet of the Things (IoT) is gaining ground as the next true revolution in the wake of Industry 4.0.

After mechanization, electrification, and digitization, the fourth industrial revolution, Industry 4.0, is the next step in innovation. Industry 4.0 hinges on the cooperation of people, IT systems, and digitally controlled production machines, all fueled by data. 

IoT and AI are two independent technologies that have significant impact on industry and production. The combination of the two brings us the Artificial Intelligence of Things (AIoT) that delivers intelligent and connected systems that will lead the charge in the new industrial revolution. 

AI + IoT Innovation

IoT devices use the internet to communicate, store, and exchange information about users. Each day, IoT devices can amass 1 billion GB of data. By 2025, over 42 billion IoT devices are expected to be in use around the world. 

While this incredible volume of data is impressive, it’s useless if we can’t sort through it. AI addresses that problem with its self-learning capabilities. AI allows businesses to react to data insights in real time for advanced analyses and conclusions. 

AIoT is empowered by three key technologies:

  • AI, which offers programmable functions and systems that facilitate learning, reasoning, and processing on par with human cognition.
  • 5G networks, which offer high-speed, virtually zero lag for rapid, real-time data processing.
  • Big data, which contains massive volumes of data collected and processed from numerous connected sources.

Combined, these devices are revolutionizing the way we interact with devices at home, at work and out in the world – leading to AIoT.

AIoT as the Next Step of IoT Evolution

Combining AI and IoT is a logical step from the widespread implementation of these two technologies and the goals of digital transformation. 

Once the first production line was created, the next big innovation was the use of machinery designed to complete specific tasks. This was closely followed by digitization, which allowed production machines to communicate with each other. 

Now, the next big step is the possibility of direct communication between machines and the ability to make decisions using processes that mimic human cognition. AI and machine learning coupled with IoT technology in production translate to improved business goals that allow organizations to analyze, predict, and adapt to rapidly changing demands. 

Foundations of AIoT

Cloud-based IoT rests on five key capabilities:

  • Collect telemetry data from devices and sensors in a central location
  • Store data in a scalable storage system, such as a data lake
  • Process and analyze datasets
  • Analyze the insights from data for decision-making
  • Control devices based on the best practices

AI with IoT bridges the gap between the controller and the device by acting on the patterns gleaned from telemetry data. Instead of just presenting information to humans to inform decisions, AI steps in to take the action. Essentially, AI acts as the “brain” of the system.

AI not only augments the IoT sensors with intelligence, but analyzes inbound data in batches or real time. This occurs at the start and end points of the IoT spectrum to expedite the process and conserve processing.

For example, a camera with an image sensor would typically analyze the entire data feed and send specific images to the IoT system to analyze. With AI, the camera would only send a frame when the image is detected.

By applying deep-learning models and neural networks to sensor data, AIoT systems can proactively identify critical errors in real time and shut down the system to avoid a fatal accident or major event, rather than reacting to conditions after they occur.

Major AIoT Segments

AIoT is leading the charge, but where and how? 

The impact of AIoT is most noticeable in four major segments:


Many consumers have already experienced IoT in the form of smartwatches and wearable fitness trackers. These wearable devices monitor and track user preferences and habits to provide insights and make recommendations. In healthcare, wearables allow providers to monitor patients with chronic illnesses and adapt treatment plans according to individual needs. With AIoT, the wearable device market is expected to reach $81 billion in revenue by 2023.

Smart Home

Once a staple of science fiction, smart homes are a new reality that adapts appliances, electronics, and lighting to suit the homeowner’s habits and preferences. Over time, these devices learn the idiosyncrasies of the homeowner’s day, such as ideal temperature, wake-and-sleep cycles, and use patterns for electronics to provide the most comfortable and tailored home environment possible. As a bonus, smart homes improve energy efficiency by limiting excessive consumption. Because of this, the global smart home market is expected to grow from $78,3 billion in 202 to $135.3 billion in 2025

Smart Cities

Smart cities are one of the best solutions to challenges with population. Cities are evolving to be safer and more convenient, and smart cities adapt to growing urban populations with innovations in public safety, transportation, and energy efficiency. For example, AIoT can be used for real-time, dynamic decisions in traffic congestion to improve road safety and limit commute delays. 

Smart Industry

Digital transformation is making its mark on many industries, including some of the most traditional. Numerous industries are realizing the benefits of more efficient processes and reduced human error, along with the power of leaving employees to human-driven, creative endeavors. From real-time data analytics to smart devices, AI with IoT offers virtually endless innovation for improving industrial workflows. 

Looking to the Future of AIoT

AIoT fusion is becoming more mainstream, leading to greater innovations and a more connected future. By allowing automated systems to take preventative actions, free from human intervention, AIoT can streamline the processes of connected systems, supercharge data collection and analysis, and improve human-machine interactions. The convergence of AI and IoT is the future of industry and impacts virtually every industrial vertical, from aviation to healthcare to manufacturing.