Generative AI to be a $1.3 trillion market by 2032, study finds

Bloomberg Intelligence: New report finds emerging industry could grow at 42% CAGR over next 10 years

Growing demand for generative AI products could generate around $280 billion in new software revenue

New York, June 1, 2023 – The generative AI market is expected to explode with the influx of consumer-grade generative AI programs such as Google Bard and OpenAI ChatGPT, according to a new report from Bloomberg Intelligence (BI). The market will grow from $40 billion in 2022 to $1.3 trillion over the next 10 years, up from $40 billion in 2019, according to BI. BI’s research found that in the short term, the market will be driven by training infrastructure and gradually shift to inference devices for large language models (LLMs), digital advertising, specialized software and services in the medium to long term, with a CAGR of 42%.

In addition, growing demand for generative AI products, driven by professional assistants, new infrastructure products, and “copilots” that accelerate coding, could generate around $280 billion in new software revenue. As enterprises move more workloads to the public cloud, companies such as Amazon Web Services (AWS), Microsoft, Google, and Nvidia are likely to be the biggest beneficiaries.

BI estimates that by 2032, the impact of generative AI will expand from less than 1% of total IT hardware, software services, advertising spending, and gaming market spending today to 10%. The biggest driver of incremental revenue will be generative AI infrastructure as a service (IaaS) for training master of laws (LLMs) ($247 billion by 2032), followed by digital advertising driven by the technology ($192 billion) and dedicated generative AI assistant software ($89 billion). On the hardware side, revenue will be driven by AI servers ($132 billion), AI storage ($93 billion), computer vision AI products ($61 billion), and conversational AI devices ($108 billion).

In particular, generative AI is expected to benefit the life sciences and education sectors. BI's analysis found that early use cases for ChatGPT suggest that these two areas are currently just the tip of the iceberg in large software segments that are expected to grow rapidly in the future. The potential for specialized software assistants based on AI may bring about changes in search and other ways of aggregating information, which is the driving force behind the development of these two market segments.

"The world will see an explosion in the field of generative AI over the next decade, which will completely change the way the technology industry operates. As this technology develops, it will become an increasingly important component of IT spending, advertising spending and cybersecurity."

This technology will not bring a single positive development to all players in the field, as the rapid growth opportunities of generative AI in various technology fields may displace many existing suppliers that will benefit from generative AI, including semiconductor, hardware, cloud software, IT services and advertising companies.