AI-Driven Automation Revenue to Surpass US$5 Billion by 2035 as Manufacturers Rebuild Control Engineering Around Virtualization

As manufacturers push for greater flexibility, virtualization and artificial intelligence are reshaping the software-defined automation market. Global technology intelligence firm ABI Research forecasts that revenue attributable to industrial AI in software-defined automation will exceed US$5 billion by 2035, with growth led by SCADA/HMI software, Distributed Control System (DCS) software, Industrial PCs (IPCs), and soft or virtual controllers.

“AI is no longer just an overlay for industrial automation, but an enabler of a fundamentally new engineering and operations model,” said Benjamin Weaver, Research Analyst at ABI Research. “Agentic AI can reduce code development time by as much as 50%, help close persistent industrial skills gaps, and support everything from Programmable Logic Controller (PLC) code generation and migration to commissioning, troubleshooting, and operational optimization.”

The strongest near-term growth will come from software and compute layers that are best positioned to absorb AI functionality. ABI Research forecasts annual growth from 2025 to 2035 of 25.0% for AI in DCS software, 20.1% for AI in IPCs, 17.9% for AI in soft or virtual controllers, 15.3% for AI in SCADA/HMI software, and 14.6% for AI in PLCs. Process industries are expected to lead adoption as they modernize operations and expand AI pilots, while IPC demand is rising as manufacturers seek platforms with capable of supporting virtual controllers and AI workloads.

Vendors including Siemens, SUPCON, Rockwell Automation, and CODESYS are helping define the competitive landscape. Siemens is pairing virtual control with major investment in industrial foundation models, SUPCON is combining time-series industrial AI with its Universal Control System architecture, Rockwell Automation is emphasizing software flexibility and AI-enabled engineering tools, and CODESYS continues to influence the wider market through its foundational role in many competing software-defined automation environments.

ABI Research also expects the next wave of innovation to center on agent stacks and orchestration layers that can coordinate multiple AI agents across engineering and operations.

“Over time, these capabilities could transform SCADA and other Level 2 systems into AI-powered supervisory hubs for virtual controllers, physical assets, and robotics,” Weaver said. “Physical AI in humanoids, robot controllers, and edge systems remain a longer-term opportunity dependent on improvements in dexterity, safety, and awareness.”

These findings are from ABI Research’s AI in Software-Defined Automation (SDA) research report, part of the company’s Industrial & Manufacturing Technologies research service, which includes research, data, and ABI Insights.