U.S. AI in Physical Therapy Market Opportunities in Personalized AI Solutions for Rehabilitation

Revenue, 2025

USD 179.23 Million

Forecast, 2035

USD 1706.98 Million

CAGR, 2026-2035

25.28%

Report Coverage

United States

U.S. AI in Physical Therapy Market Trends for 2026

The U.S. AI in physical therapy market size was estimated at USD 179.23 million in 2025 and is predicted to increase from USD 224.54 million in 2026 to approximately USD 1706.98 million by 2035, expanding at a CAGR of 25.28% from 2026 to 2035.

The market is rapidly expanding, driven by rising musculoskeletal conditions, increased telehealth use, and AI-based tools that improve treatment efficiency and patient outcomes. Furthermore, advancements in computer vision and wearable sensors allow for more precise, personalized care and enhanced patient engagement.

Key Takeaways

• U.S. AI in physical therapy sector pushed the market to USD 224.54 million by 2026.
• Long-term projections show USD 1706.98 million valuation by 2035.
• Growth is expected at a steady CAGR of 25.28% in between 2026 to 2035.
• By component, the software segment held a dominant position in the U.S. AI in physical therapy market in 2025.
• By component, the services segment is expected to grow at the fastest CAGR in the market during the forecast period.
• By deployment mode, the cloud-based segment accounted for a major revenue share in the market in 2025 and is expected to grow at the fastest CAGR in the market during the forecast period.
• By application, the musculoskeletal (MSK) rehabilitation segment led the global market.
• By application, the post-acute & post-surgical rehabilitation segment is expected to grow at the fastest CAGR in the market during the forecast period.
• By end use, the outpatient physical therapy clinics segment holds the major U.S. AI in physical therapy market share in 2025.
• By end use, the homecare settings segment is expected to grow at the fastest CAGR in the market during the forecast period.

Factors Fueling the Expansion of AI-Based Physical Therapy in the U.S.

AI in physical therapy refers to the use of artificial intelligence technologies to assist, enhance, and personalize physical rehabilitation treatment, improving efficiency, patient outcomes, and clinical decision-making. The U.S. AI in physical therapy market is growing rapidly due to rising musculoskeletal disorders, increasing adoption of telehealth and remote care, and demand for personalized rehabilitation. AI-powered tools enhanced treatment efficiency, track patient progress, and support clinicians in decision-making, driving widespread adoption across hospitals, clinics, and home health -care settings.

Trend and Future Outlook of the U.S. AI in Physical Therapy Market

• Personalized Rehabilitation Programs: Advanced digital tools enable tailored therapy plans based on patient movement patterns, recovery speed, and adherence levels. This improves treatment accuracy, boosts engagement, and supports better long-term functional outcomes across diverse patient populations.
• Growth of Virtual and Remote Therapy: Remote therapy platforms with motion tracking and real-time feedback are gaining traction. These solutions expand access to care, support home-based rehabilitation, and help providers maintain continuous patient monitoring beyond clinic visits.
• Enhanced Clinical and Operational Efficiency: Smart technologies streamline documentation, progress tracking, and performance analysis. By reducing manual workload and improving data accuracy, therapy providers can optimize resource utilization, lower operational costs, and dedicate more time to direct patient care.

Key Indicators and Highlights

Segmental Insights

By Component Insights

Why did the software Segment Dominate in the U.S. AI in Physical Therapy Market in 2025?

The software segment dominated the market in 2025 due to its ability to deliver scalable, cost-effective, and easily upgradable solutions for therapy planning, motion analysis, progress tracking, and remote care. Unlike hardware, software platforms integrate seamlessly with existing systems, support data-driven decision-making, and enable continuous personalization of therapy programs, driving higher adoption among providers and clinics.

Services

The services segment is expected to grow at the fastest CAGR during the forecast period due to rising demand for implementation support, systems integration, training, and ongoing maintenance. Healthcare providers increasingly rely on specialized service partners to optimize digital therapy solutions, ensure regulatory compliance, and achieve seamless adoption, driving sustained demand for professional and managed services across care settings.

By Deployment Mode Insights

How the Cloud-based Segment Dominated the Market in 2025?

The cloud-based segment dominated the U.S. AI in physical therapy market in 2025 and is expected to grow at the fastest CAGR due to its scalability, cost efficiency, and remote accessibility. Cloud platforms enable real-time data analysis, virtual therapy delivery, and seamless integration with digital health systems, supporting personalized care, continuous monitoring, and rapid adoption across clinics, hospitals, and home-care settings.

By Application Insights

Why the Musculoskeletal (MSK) Rehabilitation Segment Dominated the U.S. AI in Physical Therapy Market? 

The musculoskeletal (MSK) rehabilitation segment dominated the market due to the high prevalence of orthopedic injuries, arthritis, and post-surgical recovery cases. MSK conditions require continuous monitoring, movement assessment, and personalized therapy plans, making technology-enabled solutions highly effective. Growing sports injuries, an aging population, and increasing demand for outpatient and home-based rehabilitation further strengthened this segment’s market leadership.

Post-acute & Post-surgical Rehabilitation

The post-acute & post-surgical rehabilitation segment is expected to grow at the fastest CAGR during the forecast period due to rising surgical volumes and shorter hospital stays. Providers increasingly adopt technology-enabled rehabilitation to support recovery after discharge, monitor patient progress remotely, and reduce readmission. Growing emphasis on value-based care and home-based recovery solutions further accelerates adoption in this segment.

By End Use Insights

Why Did the Outpatient Physical Therapy Clinics Segment Dominate in the U.S. AI in Physical Therapy Market in 2025? 

The outpatient physical therapy clinics segment dominated the market in 2025 due to their high patient footfall, cost-effective care delivery, and focus on volume of musculoskeletal and post-injury cases, driving strong adoption of digital therapy tools for treatment planning, progress tracking, and patient engagement, reinforcing their leading market position.

Homecare Settings

The homecare settings segment is expected to grow at the fastest CAGR during the forecast period due to rising demand for convenient, cost-effective rehabilitation outside clinical facilities. Increasing preference for at-home recovery, especially among elderly and post-surgical patients, along with improved remote monitoring and virtual therapy support, enables continuous care, better adherence, and reduced hospital visits, accelerating adoption across the U.S. AI in physical therapy market.

Regional Insights

What Factors Support the Growth of the Different Regions in the U.S.?

Northeast

The Northeast is witnessing rapid AI adoption in physical therapy, driven by major hospital systems in New York and Boston integrating AI-powered motion tracking to optimize rehabilitation protocols and enhance patient outcomes, alongside significant investments in digital health tools and EMR systems. 

South

The South is rapidly adopting AI in physical therapy to bridge gaps in care across rural areas, with Texas and Florida leading in the use of telehealth, remote patient monitoring, and AI-powered apps to address high patient volumes and increase access to rehab services.

Midwest

The Midwest is focusing on AI-driven rehabilitation for its aging population, with clinics and hospital systems in Illinois and Ohio using AI for movement analysis and fall prevention, supported by strong investments in wearable technologies and remote monitoring to enhance patient independence and care.

West

The West leads in innovative AI applications, with California and Washington utilizing AI-powered, computer-vision platforms for real-time rehabilitation, focusing on personalized and hybrid, at-home care models that blend advanced technology with specialized therapy, driven by high-tech adoption rates and extensive digital health research.

Value Chain Analysis

R&D

• The R&D process for AI in physical therapy involves a multi-stage, interdisciplinary approach that combines clinical expertise, data science, and software engineering to create, validate, and deploy intelligent rehabilitation tools. Research and development in AI-enabled physical therapy accelerated between 2019 and 2024, emphasizing vision-based motion assessment, wearable-driven performance tracking, and data-led personalized rehabilitation.
• Key players:  Hinge Health, Sword Health, Kaia Health, Reflexion Health, and Moterum

Clinical Trials

• Clinical trial studies in the U.S. physical therapy space are increasingly evaluating intelligent exoskeletons, vision-based motion assessment, and remote monitoring solutions to enhance rehabilitation outcomes. Research is largely centered on stroke recovery, orthopedic healing, and musculoskeletal care, with findings indicating improved mobility, reduced pain, and better functional performance.
• Key players: Ekso Bionics, ReWalk Robotics, DARI Motion, SWORD Health, and BioIntelliSense

Patient Support and Services

• In the U.S., intelligent physical therapy solutions are strengthening patient care by enabling continuous remote supervision, instant performance feedback, and customized rehabilitation programs, meeting the growing need for accessible therapy. These solutions also improve patient participation, streamline clinical documentation, and support outcome-focused rehabilitation.
• Key Players: Hinge Health, Kaia Health, Reflexion Health, XRHealth company, and PhysiTrack.

Top Vendors in the U.S. AI in Physical Therapy Market & Their Offering

SWOT Analysis

Strengths

• Enhances therapy accuracy through personalized and data-driven rehabilitation plans.
• Enables remote monitoring and continuous patient engagement beyond clinic visits.
• Improves clinical efficiency by automating documentation and progress tracking.
• Strong U.S. digital health ecosystem supports rapid innovation and adoption.

Weaknesses

• High implementation and integration costs for smaller clinics.
• Dependence on digital literacy and patient technology access.
• Limited standardization across platforms and therapy protocols.
• Data privacy and security concerns may slow adoption.

Opportunities

• Growing demand for home-based and outpatient rehabilitation services.
• Rising prevalence of musculoskeletal, post-surgical, and aging-related conditions.
• Expansion of value-based care models, encouraging outcome-driven therapy.
• Integration with wearables and telehealth platforms to broaden care reach.

Threats

• Regulatory and reimbursement uncertainties affecting long-term investments.
• Resistance from clinicians due to workflow disruption concerns.
• Cybersecurity risks linked to patient data handling.
• Increasing competition leading to pricing pressure and market fragmentation.

What are the Recent Developments in the U.S. AI in Physical Therapy Market?

• In January 2025, Raintree Systems strengthened its technology strategy by acquiring Yoomi Health, a rehabilitation-focused innovation firm. This move advances Raintree’s goal of building an AI-centered EMR by embedding intelligent workflows that minimize administrative effort, respond to reimbursement pressures and workforce shortages, and support improved clinical and operational outcomes for therapy providers and patients.
• In March 2025, Kaia Health collaborated with Ramp Health to embed digital musculoskeletal therapy, guided exercises, and motion-based coaching into Ramp’s employee wellness offerings. The partnership focuses on helping employers and health plans prevent injuries, lower healthcare costs, and expand access to scalable rehabilitation support.

Segments Covered in the Report

By Component

• Software
• Services

By Deployment Mode

• Cloud-Based
• Server-based

By Application

• Musculoskeletal (MSK) Rehabilitation
• Post-Acute & Post-Surgical Rehabilitation
• Neurological Rehabilitation
• Sports & Performance Therapy
• Others

By End Use

• Outpatient Physical Therapy Clinics
• Hospitals & Health Systems
• Homecare Settings
• Others