**Global Video Surveillance Market Reaches $27 Billion as AI Reshapes Sector**
The global video surveillance market has experienced notable growth, reaching a valuation of $27 billion in 2025, according to a recent report from research firm Omdia. This growth, marked at 4.3 percent, is largely attributed to an increasing demand for artificial intelligence (AI) technologies and evolving regulatory landscapes that are transforming the security industry.
Omdia's report highlights that the video surveillance sector is undergoing significant changes, influenced by new deployment strategies, shifting storage requirements, and the evolution of business models. These factors are prompting organizations to rethink their approaches to video surveillance systems.
Regional performance within the market has varied considerably. North America and Western Europe have shown robust growth, fueled by upgrades to AI-enabled systems, quicker replacement cycles, and stricter compliance mandates. Key regulations, such as the U.S. National Defense Authorization Act (NDAA) and the European Union's AI Act, have intensified the pressure on organizations to adopt advanced and compliant security solutions.
Emerging markets have also seen strong expansion, supported by large-scale government infrastructure initiatives and rapid urban development. However, China stands out as a notable exception, with its video surveillance market contracting by 2 percent in 2025. Omdia attributes this decline to broader economic challenges, anti-involution policy measures, and tighter budgets within the public sector, marking the fourth consecutive year of decline for the Chinese market.
Looking ahead, Omdia anticipates a significant acceleration in global market growth in 2026, forecasting an expansion of 12.8 percent. This growth is expected to be driven more by rising component costs than by increased sales volumes. The rapid expansion of hyperscale AI data centers has intensified competition for memory chips, storage equipment, and semiconductor manufacturing capacity, leading to a supply-demand imbalance that has extended procurement timelines and resulted in notable price increases for essential hardware components.
The report identifies three major strategic shifts that are reshaping the global video surveillance market:
1. **Software's Increasing Market Share**: There is a growing trend towards software solutions that focus on operational outcomes rather than merely selling equipment. The rise of AI-powered analytics, the adoption of Video Surveillance as a Service (VSaaS), and a stronger demand for business-oriented solutions are accelerating this software adoption, particularly in government and industrial sectors.
2. **Influence of Cybersecurity Regulations**: Cybersecurity and data sovereignty regulations are becoming increasingly significant, extending beyond traditional product safety requirements. Governments are introducing mandatory cybersecurity standards and data localization rules that impact market dynamics. For instance, India experienced a 9.4 percent decline in its video surveillance market in 2025 due to the introduction of Standardisation Testing and Quality Certification (STQC) requirements. Additional regulations, such as Vietnam's QCVN 11:2026 technical standards and the EU's Cyber Resilience Act (CRA), are expected to heighten the pressure on manufacturers to integrate security-by-design principles into their product development processes.
3. **Shifts in Chinese Manufacturers' Strategies**: The Chinese surveillance industry is also experiencing a strategic transformation. After years of contraction, manufacturers are shifting their focus from prioritizing sales volumes to enhancing profitability. Leading Chinese companies are withdrawing from lower-margin segments and investing in differentiated AI capabilities while implementing stricter criteria for project selection, emphasizing cash flow management and outstanding payments.
Tommy Zhu, Senior Principal Analyst at Omdia, advises organizations to reevaluate their storage infrastructure strategies in light of ongoing component inflation, which is expected to persist through 2027. He recommends prioritizing vendor-agnostic video management platforms and exploring hybrid cloud architectures to bolster supply chain resilience and manage total ownership costs in an increasingly constrained hardware environment.
As the video surveillance market continues to evolve, the interplay of AI advancements, regulatory changes, and shifting business strategies will likely shape the future landscape of security solutions worldwide. Organizations are encouraged to adapt to these changes to remain competitive and compliant in a rapidly changing environment.