Understanding AIaaS: All You Need to Know about Artificial Intelligence as a Service

By Dash Technologies Inc., August 16, 2021
Reading Time: 10 minutes

Software as a Services (SaaS), Platform as a Service (PaaS), Infrastructure as a Service (IaaS), Function as a Service (FaaS), and many similar terms are getting popular within the tech arena. Among various XaaS, there is a new term AIaaS (Artificial Intelligence as a Service), widely being used by AI software development service providers as well as users.

For startups and SMEs looking to explore the potentials of AI without spending large upfront costs, AIaaS is the best option for them. However, as AIaaS is a new term, many of us may not be aware of the term.

So, if you are exploring AIaaS, there are plenty of things that you need to understand, know and explore. So, this article is dedicated to you with the assurance that all your questions regarding AIaaS are precisely explained.

So, let’s begin;

What is AIaaS?: Understanding AIaaS in Layman Language

Artificial intelligence as a service is when an organization, usually SMEs, utilizes AI solutions in their businesses provided by a third party. That means companies don’t need to build their own solution; they can use full, in-house AI solutions at a fraction of the cost. Indeed, it doesn’t make any sense to hire an AI developer and pay $250/hr when entire AI solutions can be made available at a quarter of the cost, or even less.

Did you know 75% of commercial enterprise applications are set to be equipped with Artificial Intelligence by the end of 2021?

It clearly suggests that AI is important for every business today. Time for every business to buck up their game and integrate AI and ML-powered tools, solutions, and applications into their business. Whether it is startups, enterprises, organizations, manufacturing companies, or construction, no industry is immune to Fourth Industrial Revolution and technology transformation.

Artificial Intelligence, Machine Learning, Deep Learning, Neural Networks, etc., are the key elements of this transformation and industrial revolutions. Hence, every small, medium, or large company wants to use AI applications or AI-powered solutions to improve their business and get a competitive edge over their competitors. AI combining data analytics help companies create better products and provide services suitable to varied customers’ needs. The tools simply help companies understand their target market, customers and automate production lines.

So, How does AIaaS Come into the Picture?

Yes, we were about to talk. Earlier, businesses needed to invest a lot of money to implement AI solutions into their business. AI machines, solutions, tools, and AI developers or Artificial Intelligence development services were quite expensive. Even today, they are expensive, and small and medium businesses cannot afford to implement the solution. That’s where AIaaS comes into the picture by helping businesses of all sizes without invading their bank balances.

Why Companies Acquire AIaaS

Companies, especially startups and SMEs, are looking for cost-effective AI solutions without having to pay a large chunk of money. Companies using cloud services can access AI resources and customize them based on the business niche. For example, if a company needs only a chatbot, startups or SMEs can optimize the bot based on their needs. A little modification may be required to optimize the entire customer support and sales process.

How does AIaaS Work

Cloud services enable companies to acquire AI software from third-party vendors based on a pay-as-you-use basis. Now, companies get customized solutions based on their requirements and start getting the benefits of trending technologies. Whatever solution they acquire from the SaaS or cloud service provider, they need to pay only for that solution they use.

Types of AI as a Service

AI as a Service can be many types, though understanding each type will help you understand which one you need. Well, the benefits of AI can be harnessed when you know the different types of AI services;

  • APIs
  • Bots
  • Machine Learning


API refers to Application Programming Interface, and all AI solutions come with APIs. API simply enables two machines to interact smoothly. For example, APIs can be used for various purposes, including Natural Language Processing, sorting customer support ticketing, sentiment analysis, and more.

If you implement AI as a Service, you can use the solution right after writing a few lines of code. The solution is then ready to handle all assigned tasks seamlessly.


Bots are widely used for customer support purposes by the banking and finance sectors. However, many other organizations with customer-facing services can use AI bots to provide excellent customer service to their customers. It can solve many common or complex queries for customers. For example, bots can register complaints, show results, account balance, support opening accounts, find out relevant products/services, and more without typing it manually.

Machine Learning

Machine Learning is a subset of AI and helps AI machines learn from data and perform accordingly, even without being programmed. In short, AI gives machine-human thinking capability while machine learning provides data to machines to learn from it. However, the potentials of the ML can be utilized based on the quality solution and it entirely depends on the Machine Learning Development Services you have hired.

Benefits and Drawbacks of AIaaS

AIaaS is a new term in the tech industry and is explored by a wide range of startups. So, obviously, they must be exploring the benefits and drawbacks of Artificial Intelligence as a Service. We have the answers to your questions. Let’s explore;

Top Benefits of Artificial Intelligence as a Service

·         Cost Saving

As we have discussed in the paragraph above, cost-saving was the main reason for the evolution of AIaaS. Companies do not have to invest a large upfront cost. They need to pay for what they use —without paying for any development costs.

·         Advanced infrastructure

Many companies want to use Artificial Intelligence, though developing a solution could be an expensive affair. However, accessing AI solutions from third-party vendors can help them leverage the power of AI into their business operation without any in-house AI equipment or building AI solutions from scratch.

·         Easy to Use and Implement

When it comes to building and implementing Artificial Intelligence solutions, you need to hire experts to build and implement the solution into your business process. With AIaaS, you don’t need to hire an expert, or in-house software developers don’t need to be the AI expert. Just buy the package with the third-party vendor, write a few lines of code, the solution is ready to use.

·         Scale AI When Needed

When building AI solutions, either you hire an AI expert when you need to scale your business or spend a good sum of money to make the solution scalable. With AIaaS, you can scale up the project as the demand changes.

Top Drawbacks of AIaaS

·         Long-term Costs

Even though the term AIaaS is new and hence it has little room for drawbacks. There are still some possible future cons that cannot be ignored. Long-term costs are one of the drawbacks. As you continue to access services from AIaaS service providers, you may have to spend heavy initial costs. However, it’s a common issue. Basically, the purpose of AIaaS is to help startups experiment with the tech advent, and once they are confident of using the technology, they can build the new one.

·         Transparency

Leveraging AI as a Service, you are only entitled to use its services, not its inner workings. That puts transparency at the stack. There are plenty of things you would not know; some of them are important ones. For example, you will get the output when you provide input, but you will remain unknown how the output was obtained.

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The future of AIaaS

Did you know Statista finds that the worldwide cloud infrastructure services revenue reached 42 billion U.S. dollars in Q2, 2021?


No doubt, the data for cloud services, then you can relate this with the AIaaS as the cloud service is growing steadfast. As far as spending on AI is concerned, it is set to be more than $110 billion by 2024, which is more than double the last year ($50.1 billion in 2020), estimates International Data Corporation (IDC).

In fact, the revenue from the AI Software segment to more than 247.6 billion U.S. dollars in 2020. And, as we have mentioned, around 70; business applications use AI; it is important to note every; business needs AI support to get the benefits.

The data given above suggest that AIaaS will gain momentum in the coming years. As businesses will need to adapt to the trends, AIaaS will be the strongest option for them to go with.

Top AIaaS Companies

Nowadays, many companies are coming out offering cloud services for AI solutions. Here is a list of companies offering AIaaS, which you can buy, but make sure you have properly gone through vendors before taking a final call.

  • Amazon Web Services (AWS)
  • Microsoft Azure
  • Google Cloud
  • IBM Watson Cloud
  • Element AI
  • Mindlayer

These companies offer cloud services; hence connecting with AIaaS will help you get a reliable solution.

Final Thoughts

We at Dash Technologies help startups and entrepreneurs leverage AI as a Service into business operations and harness the power of technology. We can help you build custom AI solutions and help you manage AI as a Service at affordable costs.

About Dash

Dash Technologies Inc.

We’re technology experts with a passion for bringing concepts to life. By leveraging a unique, consultative process and an agile development approach, we translate business challenges into technology solutions Get in touch.

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