Data Annotation Tools Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

The Data Annotation Tools Market Report is Segmented by Component (Software Platforms, and Services), Data Type (Text, Image, and More), Annotation Type (Manual, Semi-Supervised, and More), Deployment Mode (Cloud, On-Premise, and Hybrid), End-User Industry (IT and Telecom, BFSI, Retail and E-Commerce, and More), and Geography. The Market Sizes and Forecasts are Provided in Terms of Value (USD) for all the Above Segments.

Data Annotation Tools Market Size and Share

Data Annotation Tools Market Summary
Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

Compare market size and growth of Data Annotation Tools Market with other markets in Technology, Media and Telecom Industry

Data Annotation Tools Market Analysis by Mordor Intelligence

The data annotation tools market reached USD 2.32 billion in 2025 and is forecast to expand at a 33.27% CAGR to USD 9.78 billion by 2030. This trajectory is powered by surging enterprise demand for high-quality training data across generative AI, autonomous systems, and multimodal foundation models. Managed platforms now compete on annotation accuracy rather than cost, turning data labeling into core infrastructure for AI deployment. Generative AI adoption is shifting requirements from single-modality images to complex combinations of text, video, and 3-D point clouds. Cloud-native workflows, multimodal data pipelines, and hybrid human-in-the-loop processes are widening the addressable user base, while regulatory pressure for transparent, auditable data handling is raising quality thresholds.

Key Report Takeaways

  • By component, software platforms led with a 48.5% revenue share in 2024, while services are projected to post an 18.7% CAGR through 2030.
  • By data type, image annotation held 36.3% of the data annotation tools market share in 2024; 3-D/point-cloud workflows are on track to grow at a 23.3% CAGR to 2030.
  • By annotation method, manual workflows accounted for 54.2% share of the data annotation tools market size in 2024, whereas automatic techniques are advancing at a 24.8% CAGR to 2030.
  • By deployment mode, cloud solutions commanded 63.5% of 2024 revenue and are set to rise at a 22.6% CAGR through 2030.
  • By end-user industry, IT and telecom controlled 29.7% share in 2024, while automotive and transportation is the fastest-growing vertical at a 21.7% CAGR.
  • By geography, North America captured 41.5% of global revenue in 2024; Asia-Pacific is forecast to post an 18.5% CAGR to 2030.

Segment Analysis

By Component: Services accelerate despite platform dominance

Software platforms retained 48.5% share of the data annotation tools market in 2024, cementing their role as the first stop for enterprises scaling internal workflows. Yet services are forecast to climb at an 18.7% CAGR, signaling rising preference for managed solutions when projects demand regulatory compliance or specialized expertise. CloudFactory’s 7,000-person analyst network processing 50,000 daily labels for retail majors highlights the depth of capacity service firms now command.

The services boom reflects a strategic shift. Enterprises increasingly outsource entire labeling pipelines—including workforce management, quality assurance, and compliance—to partners such as Sama, which reports 99% client acceptance and ISO-aligned audit trails. These partnerships create a blended procurement pattern in which customers purchase both licenses and capacity, blurring historical platform-service lines across the data annotation tools market.

Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

By Data Type: 3-D point cloud disrupts image dominance

Images still held a 36.3% slice of the data annotation tools market share in 2024, underpinned by retail, security, and healthcare vision projects. However, the 3-D/point-cloud segment is expanding at 23.3% CAGR, catalyzed by autonomous driving, spatial computing, and industrial simulation needs. Qualcomm, Apple, and Google continue to file patents for point-cloud compression and voxel-based mapping, confirming technological momentum.

Apple’s floor-plan generation patent shows how 3-D labeling unlocks real-time spatial understanding for augmented-reality navigation. The segment’s complexity favors providers with proprietary tooling, positioning advanced players to consolidate revenue as demand shifts from 2-D to volumetric contexts.

By Annotation Method: Hybrid workflows replace binary choices

Manual techniques controlled 54.2% of 2024 revenue, underscoring the need for human judgment in edge-case review and quality assurance. Automatic pipelines are ramping at a 24.8% CAGR, driven by improved model-based pre-labeling and semi-supervised learning that multiply throughput without proportionate labor costs. The data annotation tools market size for semi-supervised approaches is projected to compound swiftly as enterprises integrate active-learning loops that prioritize labeling only the most uncertain samples.

Voxel51’s auto-label technology exemplifies this hybrid approach: the model fills in predictable labels, and humans focus on edge cases, delivering step-change cost efficiency without sacrificing accuracy[3]Voxel51, “Auto-Labeling Technology Whitepaper,” voxel51.com. As customers mature, demand is shifting from either-or decisions toward orchestrated workflows that intelligently assign tasks between machines and humans.

By Deployment Mode: Cloud dominance accelerates

Cloud environments accounted for 63.5% of 2024 revenue and are advancing at a 22.6% CAGR, a rate that adds significant upside to the overall data annotation tools market size between 2025 and 2030. Elastic compute, global collaboration, and pay-as-you-go economics outweigh latency concerns for most use cases. Hybrid models serve privacy-sensitive verticals, with patient data staying on-premise while annotation orchestration happens in the cloud, as evidenced by Centaur Labs’ medical pipelines.

Providers are investing in multicloud connectors, on-prem agents, and zero-trust controls to serve regulated workloads without forfeiting the productivity gains of cloud toolchains. This nuanced deployment mix positions platform vendors to capture recurring revenue even in sectors traditionally resistant to public-cloud adoption.

Data Annotation Tools Market
Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

Note: Segment share of all individual segments available upon report purchase

By End-User Industry: Automotive acceleration challenges IT leadership

IT and telecom retained 29.7% share in 2024 thanks to early AI investments in chatbots, network optimization, and content moderation. The automotive and transportation segment, propelled by autonomous-driving programs, is forecast to grow 21.7% annually, challenging IT’s dominance in the data annotation tools market. Tesla’s multi-site video-annotation facilities and Miovision’s smart-city traffic initiatives underscore sector appetite for high-precision 3-D data.

Healthcare is emerging as another fast-moving vertical as FDA guidance mandates ongoing annotation for post-market monitoring. Retail and e-commerce maintain steady momentum, pivoting from isolated pilots toward full production recommender systems that feed on rich visual and textual labels.

Geography Analysis

North America posted 41.5% of worldwide revenue in 2024, anchored by deep venture capital pools, big-tech R&D, and a mature buyer base. Scale AI’s USD 870 million revenue underscores regional demand intensity and explains Meta’s USD 14.3 billion stake aimed at locking down critical data infrastructure. Skills shortages and wage inflation are nudging some projects offshore, yet data-sovereignty rules keep high-stakes workloads onshore, sustaining premium pricing.

Asia-Pacific is set to outpace all regions with an 18.5% CAGR to 2030. China’s National Development and Reform Commission has formalized a labeling-industry roadmap targeting 20% growth per year and standardized AI training professions, catalyzing both supply and demand in local language, multimodal, and 3-D datasets. Regional cost advantages, vast talent pools, and accelerated AI adoption—Asia’s AI revenue could near USD 300 billion in 2030—make the region pivotal for capacity expansion.

Europe exhibits steady growth as GDPR and forthcoming AI-Act rules elevate requirements for auditable, bias-controlled datasets. Providers such as Brighter AI deliver GDPR-compliant video anonymization for rail operator Deutsche Bahn, revealing vertical niches within privacy-first environments. Middle East and Africa are emerging capacity nodes; the UAE’s data-center investments in Kenya point to a new South-South corridor for annotation services. South America remains a smaller yet growing cluster, buoyed by multilingual NLP demand and rising fintech investment.

Data Annotation Tools Market
Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

Competitive Landscape

More than 100 active vendors keep the data annotation tools market fragmented, yet consolidation pressure is evident. Meta’s USD 14.3 billion move for a 49% Scale AI stake highlights the pivot from arms-length sourcing to vertical integration. Traditional boundaries between platform producers such as Labelbox and managed service experts like Appen are fading; both groups now offer hybrid bundles blending SaaS tooling with curated workforces.

Technological differentiation hinges on automation and domain depth. Voxel51 aims to cut labeling costs by 100,000× by pairing auto-labeling with human verification, a claim that, if realized, could compress industry margins. Patent filings from Tesla, Disney, and Microsoft show escalating investment in proprietary annotation algorithms, annotation-quality scoring, and content-validation model pipelines. Strategic partnerships such as the TaskUs–V7 tie-up unite a labor pool of 670,000 annotators with next-gen workflows, signposting an ecosystem where scale and specialization converge.

White-space remains in regulated verticals such as healthcare, where HIPAA and FDA requirements create high switching costs, and in nascent data types like synthetic text-image pairs, where labeling logic is still crystallizing.

Data Annotation Tools Industry Leaders

  1. Scale AI, Inc.

  2. Appen Ltd

  3. TELUS International AI Inc.

  4. Labelbox Inc.

  5. iMerit Technology Services

  6. *Disclaimer: Major Players sorted in no particular order
Data Annotation Tools Market Concentration
Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.
Need More Details on Market Players and Competitors?
Download PDF

Recent Industry Developments

  • June 2025: Meta finalized a USD 14.3 billion investment for a 49% stake in Scale AI, confirming a vertical-integration strategy for AI data infrastructure.
  • May 2025: Bezos Expeditions invested USD 72 million in Toloka, granting operational independence while Nebius retained a minority interest.
  • January 2025: China’s NDRC issued national guidelines targeting 20% compound growth for the labeling sector by 2027 and creating standardized AI-training roles.
  • November 2024: SuperAnnotate raised USD 36 million in Series B to scale enterprise multimodal dataset tooling.

Table of Contents for Data Annotation Tools Industry Report

1. INTRODUCTION

  • 1.1 Study Assumptions and Market Definition
  • 1.2 Scope of the Study

2. RESEARCH METHODOLOGY

3. EXECUTIVE SUMMARY

4. MARKET LANDSCAPE

  • 4.1 Market Overview
  • 4.2 Market Drivers
    • 4.2.1 Growing adoption of AI/ML across industries
    • 4.2.2 Surge in autonomous-vehicle development
    • 4.2.3 Expanding medical-imaging AI demand
    • 4.2.4 Synthetic-data workflows need hybrid tools
    • 4.2.5 Regulatory push for auditable annotation
    • 4.2.6 Rapid adoption of conversational AI and virtual assistants
  • 4.3 Market Restraints
    • 4.3.1 Shortage of skilled annotators
    • 4.3.2 High cost and time of manual labeling
    • 4.3.3 Data-sovereignty limits on offshore labor
    • 4.3.4 Open-source auto-label tools eroding platform revenues
  • 4.4 Value Chain Analysis
  • 4.5 Valuation of Critical Regulatory Framework
  • 4.6 Technological Outlook
  • 4.7 Porter's Five Forces
    • 4.7.1 Bargaining Power of Suppliers
    • 4.7.2 Bargaining Power of Buyers
    • 4.7.3 Threat of New Entrants
    • 4.7.4 Threat of Substitutes
    • 4.7.5 Competitive Rivalry
  • 4.8 Impact Assessment of Key Stakeholders
  • 4.9 Key Use Cases and Case Studies
  • 4.10 Impact on Macroeconomic Factors of the Market
  • 4.11 Investment Analysis

5. MARKET SIZE AND GROWTH FORECAST (VALUE)

  • 5.1 By Component
    • 5.1.1 Software Platforms
    • 5.1.2 Services
  • 5.2 By Data Type
    • 5.2.1 Text
    • 5.2.2 Image
    • 5.2.3 Video
    • 5.2.4 Audio
    • 5.2.5 3D/Point Cloud
  • 5.3 By Annotation Method
    • 5.3.1 Manual
    • 5.3.2 Semi-Supervised
    • 5.3.3 Automatic
  • 5.4 By Deployment Mode
    • 5.4.1 Cloud
    • 5.4.2 On-Premise
    • 5.4.3 Hybrid
  • 5.5 By End-user Industry
    • 5.5.1 IT and Telecom
    • 5.5.2 BFSI
    • 5.5.3 Retail and E-commerce
    • 5.5.4 Healthcare and Life Sciences
    • 5.5.5 Automotive and Transportation
    • 5.5.6 Government and Public Sector
    • 5.5.7 Others
  • 5.6 By Geography
    • 5.6.1 North America
    • 5.6.1.1 United States
    • 5.6.1.2 Canada
    • 5.6.1.3 Mexico
    • 5.6.2 South America
    • 5.6.2.1 Brazil
    • 5.6.2.2 Argentina
    • 5.6.2.3 Rest of South America
    • 5.6.3 Europe
    • 5.6.3.1 United Kingdom
    • 5.6.3.2 Germany
    • 5.6.3.3 France
    • 5.6.3.4 Italy
    • 5.6.3.5 Spain
    • 5.6.3.6 Nordics
    • 5.6.3.7 Rest of Europe
    • 5.6.4 Middle East and Africa
    • 5.6.4.1 GCC
    • 5.6.4.2 Israel
    • 5.6.4.3 South Africa
    • 5.6.4.4 Rest of Middle East and Africa
    • 5.6.5 Asia-Pacific
    • 5.6.5.1 China
    • 5.6.5.2 India
    • 5.6.5.3 Japan
    • 5.6.5.4 South Korea
    • 5.6.5.5 ASEAN
    • 5.6.5.6 Australia
    • 5.6.5.7 New Zealand
    • 5.6.5.8 Rest of Asia-Pacific

6. COMPETITIVE LANDSCAPE

  • 6.1 Market Concentration
  • 6.2 Strategic Moves
  • 6.3 Market Share Analysis
  • 6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials as available, Strategic Information, Market Rank/Share for key companies, Products and Services, and Recent Developments)
    • 6.4.1 Appen Ltd
    • 6.4.2 TELUS International AI Inc
    • 6.4.3 Scale AI Inc
    • 6.4.4 Labelbox Inc
    • 6.4.5 iMerit Technology Services
    • 6.4.6 SenseTime Group Ltd
    • 6.4.7 CloudFactory Ltd
    • 6.4.8 SuperAnnotate Inc
    • 6.4.9 Kili Technology SAS
    • 6.4.10 Cogito Tech LLC
    • 6.4.11 Keymakr Inc
    • 6.4.12 Sama Inc
    • 6.4.13 Hive Data Inc
    • 6.4.14 Alegion Inc
    • 6.4.15 DefinedCrowd Corp
    • 6.4.16 Clickworker GmbH
    • 6.4.17 Diffgram Inc
    • 6.4.18 TaskUs Inc
    • 6.4.19 Globalme Localization Inc
    • 6.4.20 Datatang Tech Co

7. MARKET OPPORTUNITIES AND FUTURE OUTLOOK

  • 7.1 White-space and Unmet-need Assessment
You Can Purchase Parts Of This Report. Check Out Prices For Specific Sections
Get Price Break-up Now

Global Data Annotation Tools Market Report Scope

Data annotation tool is a software application or platform designed to facilitate the process of labeling or tagging various types of data, such as images, text, audio, or video.  

The data annotation tools market is segmented by component (text, image, other types), by type (manual, semi-supervised, automatic), by end-user (BFSI, IT and telecom, retail, healthcare, government, other end-users), by geography (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.

By Component Software Platforms
Services
By Data Type Text
Image
Video
Audio
3D/Point Cloud
By Annotation Method Manual
Semi-Supervised
Automatic
By Deployment Mode Cloud
On-Premise
Hybrid
By End-user Industry IT and Telecom
BFSI
Retail and E-commerce
Healthcare and Life Sciences
Automotive and Transportation
Government and Public Sector
Others
By Geography North America United States
Canada
Mexico
South America Brazil
Argentina
Rest of South America
Europe United Kingdom
Germany
France
Italy
Spain
Nordics
Rest of Europe
Middle East and Africa GCC
Israel
South Africa
Rest of Middle East and Africa
Asia-Pacific China
India
Japan
South Korea
ASEAN
Australia
New Zealand
Rest of Asia-Pacific
By Component
Software Platforms
Services
By Data Type
Text
Image
Video
Audio
3D/Point Cloud
By Annotation Method
Manual
Semi-Supervised
Automatic
By Deployment Mode
Cloud
On-Premise
Hybrid
By End-user Industry
IT and Telecom
BFSI
Retail and E-commerce
Healthcare and Life Sciences
Automotive and Transportation
Government and Public Sector
Others
By Geography
North America United States
Canada
Mexico
South America Brazil
Argentina
Rest of South America
Europe United Kingdom
Germany
France
Italy
Spain
Nordics
Rest of Europe
Middle East and Africa GCC
Israel
South Africa
Rest of Middle East and Africa
Asia-Pacific China
India
Japan
South Korea
ASEAN
Australia
New Zealand
Rest of Asia-Pacific
Need A Different Region or Segment?
Customize Now

Key Questions Answered in the Report

What is the current size of the data annotation tools market?

The data annotation tools market stood at USD 2.32 billion in 2025 and is projected to reach USD 9.78 billion by 2030 on a 33.27% CAGR trajectory.

Which component segment is growing the fastest?

Managed services are expanding at an 18.7% CAGR, outpacing platform growth as enterprises turn to outsourced expertise for regulated or domain-specific projects.

Why is 3-D point-cloud annotation attracting attention?

Autonomous driving, robotics, and spatial computing all require detailed depth perception, pushing 3-D/point-cloud workflows to a 23.3% CAGR—the fastest within data types.

Which region will lead growth to 2030?

Asia-Pacific is set for the highest regional growth at an 18.5% CAGR, underpinned by China’s national labeling initiative and rapid AI adoption across Japan, South Korea, and India.

How are vendors differentiating in a fragmented market?

Leading platforms are investing in auto-labeling, vertical specialization, and compliance toolkits, while strategic acquisitions—such as Meta’s stake in Scale AI—signal a move toward vertical integration.

What key challenge could slow market expansion?

A shortage of trained annotators, particularly for domain-intensive tasks like medical imaging and 3-D sensor fusion, is already inflating project costs and extending delivery timelines.