Deepfake Technology Market Size, Share & Industry Analysis, By Component (Software and Services), By End User (Government Organizations, Media and Entertainment, Retail and E-commerce, Legal, and Others), and Regional Forecast, 2024-2032

The global deepfake technology market size was valued at USD 6.26 billion in 2023 and is projected to grow from USD 7.57 billion in 2024 to USD 38.44 billion by 2032, exhibiting a CAGR of 22.5%. Asia Pacific dominated the global market with a share of 35.62% in 2023.

Deepfakes are AI-generated media, which are often videos or images that convincingly depict never-occurring events or situations. Several end use industries, including media & entertainment, government, retail, & e-commerce, and others use deepfake tools for creating realistic images. The growing need to prevent misuse of these AI generated images will surge the demand for deep fake detection tools.

The current election period has led to an increase in deepfake content across the globe. In the coming months, the demand for solutions to detect this synthetic media is expected to rise and positively influence the deepfake technology market.

Additionally, as the market is heavily dependent on AI technology, the advancements across generative AI market are expected to positively influence the global market growth.

IMPACT of GENERATIVE AI

Evolving Nature of Generative AI to Propel Market’s Progress

Generative AI has created a positive impact on the overall market. As the technology evolves, deepfakes are expected to become more accessible and cheaper to create more realistic manipulated content. However, their potential to be used for malicious activities is also rising simultaneously. Recently, the world witnessed examples of deep fakes developed by generative AI due to the current election period. With elections round the corner, there has been a surge in the amount of deepfakes around the globe. From the development of hyper-realistic media content to the creation of AI-backed propaganda, these technological advancements present challenges and opportunities in the political sector.

To combat these situations, the use of generative AI to develop advanced detection tools is growing rapidly. However, the effectiveness of these efforts remains limited as the technology evolves quickly. Another approach to combat security concerns is developing a digital watermarking system that can verify the authenticity of media content. For instance,

• May 2023: Google introduced “About This Image,” a new tool intending to help end users detect manipulated AI photos on the internet. The new tool offers extra context alongside images, including details of its first appearance on Google and any related recent developments.

In the coming years, the market is expected to witness a constant battle between creators and detection tool developers as technology continues to evolve rapidly.

Deepfake Technology Market Trends

Increasing Use of Deepfake Technology to Transform Advertising and Apparel Promotions Will Drive Market Growth

Deepfake technology has transformed the advertising and apparel promotion industries by providing a new way to develop AI models. In advertising and apparel promotions, deepfake solutions help brands create hyper-realistic models and showcase their products in various scenarios without expensive photo shoots or physical prototypes. One major use case of the technology in advertising is the creation of virtual models that can be modified to fit different campaigns and target audiences.

Technically, deepfake relies on advanced machine learning algorithms, majorly Generative Adversarial Networks (GANs), to generate realistic images and videos. Through iterative training, these networks learn to produce increasingly realistic output, resulting in deepfakes being virtually indistinguishable from genuine media. This technical prowess enables advertisers to create AI models that not only showcase their products, but also tell compelling stories that capture the attention of their target audience.

• According to a study, machine/vehicle object direction/identification and avoidance is expected to garner the highest revenue in AI applications owing to increasing innovations in the automotive industry and rising adoption of AI in automobiles.

Thus, the usage of deepfake solutions to create AI models for advertising and apparel promotions has been propelling the market growth in recent years.

Deepfake Technology Market Growth Factors

Expanding Applications of Deepfakes in AR and VR Experiences to Ensure Market Growth

The applications of deepfake technology have increased tremendously toward enhancing Augmented Reality (AR) and Virtual Reality (VR) experiences. These technologies, which blend digital elements with the real world or create entirely immersive digital environments, are finding innovative applications across sectors, such as education, gaming, training, and even therapy. For instance,

• In June 2023, Apple unveiled Vision Pro, a headset that merges Augmented Reality (AR) with a VR form factor, priced at USD 3,499. It features innovative eye movements, gesture controls, and a unique 3D avatar system, VisionOS, utilizing deepfake technology to create photorealistic avatars. Leveraging Apple's R1 chip, the Vision Pro is set to transform its virtual presence, with its availability slated for 2024.


• According to Exploding Topics, AR headsets' growth is accelerated by the recent launches and innovations in AR/VR headsets and are expected to reach USD 35.06 billion in 2026. The increasing adoption of these headsets indicates the increasing technological innovations, resulting in the utilization of deepfake solutions to create AI-based models. The below highlights the study from Exploding Topics about the AR headset revenue from 2021 to 2026 in billions.

Thus, the increasing applications of the product in transforming AR and Virtual Reality (VR) experiences will positively influence the deepfake technology market growth.

RESTRAINING FACTORS

Rapid Changes in Compliance and Regulations May Restrict Technology Adoption

As governments and regulatory bodies across the globe strive to keep pace with the advancements in digital technologies, new rules and standards are continuously being introduced to mitigate the potential risks associated with deepfakes. However, the dynamic nature of these regulations might create uncertainty and complexity for businesses and developers looking to leverage the deepfake technology. The growing threat of deepfake-based frauds and cybercrimes is the major concern driving these regulatory changes.

Furthermore, the ethical implications of deepfake solutions are also driving regulatory changes. Regulators are focusing on ensuring transparency and accountability in developing and deploying deepfake technology. This includes requirements for clear labelling of AI-generated content, disclosure of manipulation techniques, and mechanisms for redressal in cases of misuse or harm caused by deepfakes. The instance highlighting some of the regulations are:

In August 2023, China implemented new regulations on AI-generated deepfake content, balancing competitiveness in AI with strict online censorship. The move addressed the global concerns over deepfake misuse despite the ban on OpenAI's ChatGPT in China.

Deepfake Technology Market Segmentation Analysis

By Component Analysis

Increasing Demand for Technologically Advanced Deepfake Software Solutions Contributed to Segment’s Dominance

By component, the market is divided into software and services.

The software segment is further classified into two categories: deepfake creation and deepfake detection software. In 2023, the software segment held the largest deepfake technology market share. This growth is attributed to the increasing demand for technologically advanced deepfake software solutions among end users in recent years. Several companies are focusing on developing technologically advanced deepfake creation and detection tools globally to cater to this. For instance,

• September 2020: Microsoft introduced a deepfake detection tool, Video Authenticator, which detects content that has been artificially manipulated.

The services segment is expected to record the highest CAGR in the coming years. This is due to the inclination of end users toward adopting an effective service model.

By End User Analysis

Government Organizations Became Major End Users Due to Increased Adoption of Deepfake Technology to Detect Fraudulent Activities

By end user, the market is classified into government organizations, media & entertainment, retail & e-commerce, legal, and others (healthcare and others).

In 2023, the government organization segment held the major market share with 35.7% and is expected to maintain its dominance till 2032. As the number of frauds committed with the help of deepfake solutions increases, governments across the globe are taking steps to mitigate these concerns. For instance, the Deep FAKES Accountability Act was introduced by the U.S. government to address the challenges posed by deepfake technology in 2023.

• Moreover, in September 2023, the CSI, NSA, and CISA introduced a Cybersecurity Information Sheet named ‘Contextualizing Deepfake Threats to Organizations’. This report was presented to help companies with the right information and inform them about the potential implications of deepfake technology.

Furthermore, the retail & e-commerce sector segment is expected to record the highest CAGR during the forecast period. This growth is due to a myriad of benefits offered by the technology across this sector.

The software is popular among several end use industries such as government organizations, media and entertainment, retail and e-commerce, legal, and others due to its ability to be used for marketing, entertainment, research, training, and security purposes.

REGIONAL INSIGHTS

Geographically, the market is studied across five key regions: North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

In 2023, Asia Pacific dominated the global deepfake technology market with the highest share. This growth is attributed to the region’s technological advancements in AI and other new-age technologies, and large population, which provides a strong foundation and wide user base for its applications. Additionally, the rising digital economy and government support for artificial intelligence developments have further contributed to the growth of the market in the region. Moreover, increase in the number of market players specializing in the detection of deepfake videos and images is expected to positively influence the market in the coming years.

North America dominated the market and continues to grow at a healthy rate. The use of deepfake solutions in self-driving cars is expected to create lucrative opportunities for the market’s growth across the region. For instance,

Oxa, an autonomous vehicle software company, uses technology to develop alternatives to the original image by changing road markings and weather, and manipulating other elements.

Europe ranked third in terms of market share. The reasons contributing to the regional market’s growth are the increasing changes and developments in regulatory compliance and surge in strategic collaborations.

Furthermore, the MEA and South American regions are expected to grow slower than other regions as this technology is still in its early stages in these regions.

KEY INDUSTRY PLAYERS

Increasing Partnerships and Collaborations among Companies to Enrich Market Ecosystem

Market players are prioritizing business strategies, such as partnerships and collaborations to expand their business operations and customer base. They are leveraging new-age technologies to integrate and launch deepfake creation and detection solutions. Integrating deepfake technology into everyday life has enabled market players to expand their core business capabilities, generate additional revenue, and promote greater transparency and quality. In addition, these players are expanding their product portfolio by offering enhanced database recognition capabilities and providing a user-friendly interface for easy handling and usage.

List of Top Deepfake Technology Companies:

• DeepfakesWeb.com (Japan)


• Reface (Ukraine)


• MyHeritage Limited (Israel)


• Deepbrain AI (U.S.)


• Zaodownload.com (China)


• WOMBO Studios Inc. (Canada)


• Icons8 LLC (U.S.)


• Sensity AI (Netherlands)


• Botika E.Y Ltd. (Israel)


• TrueBees (U-Hopper S.r.l) (Italy)

KEY INDUSTRY DEVELOPMENTS:

• January 2024: Icons8 launched Human Generator tools to enable the creation of fake AI-generated human pictures. This enhanced the company’s growth in deepfake content creation.


• January 2024: Deepbrain, in partnership with Lenovo and the Scott Morgan Foundation, unveiled an AI avatar diagnosed with ALS. The company aimed to assist people with disabilities interact better with the use of AI technology.


• December 2023: WOMBO launched a new AI-powered application named Wombo Me. It enabled users to convert a self-portrait into multiple lifelike avatars.


• September 2023: Botika partnered with Flipkart as part of the Flipkart Leap Innovation Network Cohort 2. It enabled the company to collaborate with several business units at Flipkart and run pilots, contributing to the advancement of e-commerce experiences.


• March 2022: MyHeritage launched DeepStory, which enabled users to create animated videos of their ancestors describing their life stories. The feature utilized AI and a large number of photos to generate speaking portraits of the given subjects.

REPORT COVERAGE

The report offers the readers a meticulous study of the market, considering the leading market players, type of components of the technology they offer, and major applications of their offerings. In addition, it highlights the recent market trends, developments, and major funding that the small-scale players have secured. The report as a whole offers valuable insights for businesses that are responsible for making informed decisions in the market.

Report Scope & Segmentation