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Why AI Development Offshoring is Popular in US

The landscape of AI development offshoring services in the US has been increasing. Thanks to the already popular ‘decades-old’ trend and practice of outsourcing IT projects to other countries. The US companies outsource IT-reliant business processes, software services, and IT infrastructure solutions to IT agencies in other countries, and this has been continued for close to four decades.

The research giant Statista quotes that the IT services global spending has reached US $1305 billion with managed services market size touching just close to US $280 billion. Another report says that in global comparison, most of the revenues, as the trend continues, will be generated in the US which is just under US $200 billion in 2024.

So, what makes the US IT offshoring landscape evolving? While cost-effectiveness remains a primary factor, security, data privacy, and cultural match are now becoming important factors as well. Asian countries top the chart while Australia and the Middle East are not ignorable offshoring AI development hubs for the US. Businesses in the US prefer outsourcing their AI development for the same reasons. They hire teams from reputed offshore AI development companies with experience in AI/ML solutions.

In this short guide, We will explain the benefits of hiring an offshore AI development company.

Benefits of Hiring AI Dev Team Offshore

Building an AI tool in-house in the US requires a hefty investment in terms of salaries and infrastructure. The US-based companies consider an offshore AI development company and enjoy the enormous benefits of outsourcing.

Here are some of the primary benefits of outsourcing AI development to offshore hubs.

Cost-Effectiveness

The biggest benefit of outsourcing AI development to offshore companies is the cost. The US companies can tap into the best bet at the most affordable costs. Due to competitive rates, lower living expenses, and currency differences, the overall AI development costs are remarkably reduced though you get the optimum resources to develop AI projects. Such cost savings allow you to have more investments in other critical areas of your business.

Global Talent

When you hire an AI development company offshore, it opens up the door to a vast global talent pool of artificial intelligence developers. You can leverage the benefits of a diverse range of skills and perspectives that you find difficult locally. Plus, such expertise in local markets will be expensive. International expertise leads to more innovative and scalable AI solutions that ultimately benefit your projects with cutting-edge features, functionalities, global insights, and fresh ideas.

Quality

Gone are the days when IT outsourcing bothered American companies with quality. Today, the misconception has been overcome and offshore AI development service providers deliver projects with unmatched quality. This is because many offshore AI development companies have adopted stringent tech education systems that have developed a wealth of experienced AI developers. AI development offshore agencies are committed to maintaining the highest possible coding standards to compete on the global stage; thus, when you outsource AI projects, you are assured of having top-notch quality in the end product.

Round-The-Clock Development

AI development outsourcing to an offshore agency in Asian countries such as India can have continuous development cycles. Differences in time zones simply mean that they work while you sleep and when you are awake, you prepare instructions and strategies for them to work on your AI project. This speeds up overall timelines and improves productivity. As a result, 24/7 development will result in faster time to market and will get you a competitive advantage which is much required in today’s fast-paced industry.

Easy Management

Most offshore hubs in AI development use the latest communication channels or platforms integrated into project management software. This simply means that you can have an in-time report and can have know-how about your project any time you want. Regular updates, real-time collaborative tools, video meetings, and other modern tools can keep you connected and in control. Clear processes and better communication strategies can make your AI offshore development worthwhile.

Top Offshore AI Development Destinations

Top offshore AI development destinations include India, the UK, Canada, the UAE, and Australia. These countries have immensely developed themselves with powerful AI development skills at competitive costs. Most US-based companies prefer outsourcing their AI projects to these countries due to robust tech infrastructure and highly efficient yet friendly AI development companies.

India

India has been a leading destination for IT outsourcing and so for AI development. According to Statista, the revenue in the IT outsourcing market is likely to touch the figure of US $11.04 billion in 2024. The annual growth rate CAGR between 2024-2029 will witness 13.52% contributing to the market volume of US $20.81 billion by 2029. All this is due to a strong emphasis on the Indian education system and the demand for the IT industry within the country. The top AI development companies in India provide you with bespoke AI solutions making them a go-to for cost-effective options and high-quality development.

The United Kingdom

The UK is also not far behind in becoming an offshore development hub for AI projects. Statista quotes that the revenue in the IT outsourcing market is projected to be just under US $40 billion in 2024 and is likely to touch US $63.04 billion by 2029 with an annual growth rate CAGR of 9.53% in the said period. The UK has a rich talent with a strong focus on research and innovation. With highly reputed universities and a thriving tech ecosystem in the country, you can find the best offshore AI companies in the UK that deliver optimum results in AI-based products.

Canada

Due to the benefits of nearshoring IT solutions, Canada wins the race for trending offshore AI development in the US. Canada will see a remarkable CAGR of 9.53% between 2024 and 2029 reaching the IT outsourcing market US $63 billion by 2024. Canada is culturally connected with the US and that is why the country has a promising future in AI development. The Canadian government has taken ample initiatives to build a strong startup culture and, therefore, the AI developers available here are at the forefront of the technology landscape. You can have best AI development agencies in Canada that balance high-quality talent and reasonable costs worth considering for AI projects nearshoring.

The United Arab Emirates

The UAE is one of the fastest-growing countries that is emerging as a tech hub with the potential to become an offshore hub for AI development. With a significant focus on digital transformation, you can find top AI companies in the UAE with strategic vision and an innovation-driven approach in their in-house AI development teams.

Find top AI development companies in the UAE with state-of-the-art infrastructure, competitive prices, and innovative approaches. The region is focusing on cutting-edge technologies and is witnessing the biggest transformation in outsourcing IT solutions. A report says that the IT outsourcing market in the UAE will jump from US $1.39 billion in 2024 to US $4.79 billion in 2029 witnessing a CAGR of 6.23% for the said period.

Australia

The revenue in the IT outsourcing market in Australia is likely to touch US $14.01 billion in 2024 and with a CAGR of 8.70%, it will reach a magical figure of US $21.26 billion in 2029, according to authentic reports. This is because the country combines a high standard of tech education and growing talent acquisition of skilled AI developers from other countries as immigrants. The country has a clear focus on the research and development of AI and ML. you find the best AI companies in Australia with high-quality software-building services for offshore AI projects. Additionally, most US companies prefer Australia as their AI development offshore hub due to the favorable time zone.

Offshore Vs Nearshore AI Development

Choosing the right location for your AI project development needs depends on your specific requirements. While offshore AI development offers terrific cost advantages, tapping into global talent, there could be a communication and cultural gap match initially. Also, some companies may work in specific time frames due to which the time zone challenges prevail.

On the other hand, nearshoring AI development works well as it is a cultural fit. For instance, the US companies may nearshore AI development to Canada, their cultural fit, but then they need to shell out more money because it will be way costlier than offshore AI development to India.

Ultimately, you need to decide on nearshore or offshore AI development depending on your project needs, budget, time zone, complexity of AI tool execution, and so on.

Ready to Build An AI Solution? Here Is the Best Option

Whether you are outsourcing AI development to an offshore AI development company or a nearshore AI agency, you are saving costs and getting quality products at the end of the day. Nevertheless, you can also find top AI development companies in the US that offer bespoke solutions as per your requirements, but you may need to discuss your ideation and negotiate a bit on the project in the long run.


Derek CohenDerek Cohen


Derek Cohen
  |  Jun 17, 2024



Analyzing business activities and data to formulate the best business development ideas is where I earn appreciations and remunerations. I’m an ardent reader, business adviser, gadget aficionado and an amateur yet an avid writer. My urge for innovative writing evokes every time I come across new gadgets, neo technology and novel technical events.


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