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The rise of generative article intelligence (GenAI) has taken the world by storm in 2023. While organizations have taken a keen interest in deploying GenAI technology, it has remained a relatively limited market so far.
Sopra Steria Next, a European tech leader recognized for its consulting, digital services, and software development, has conducted a study to understand the trajectory of the GenAI market for the next few years.
The study shows that the GenAI market is on course to grow over $100B by 2028. This represents a tenfold increase in the GenAI market, from around $8B in 2023 to over $100B in 2028.
Fabrice Asvazadourian, Chief Executive Officer of Sopra Steria Next, compared the growth to the American gold rush phenomenon: “At the start of the gold rush, the first to strike it rich were actually the ones selling shovels and pickaxes; similarly, despite its lightning-fast market penetration, generative AI generated only limited revenue in 2023, essentially for cloud providers and their graphics processor manufacturers”.
According to Asvazadourian, the report indicates that 2024 will be the beginning of an exponential growth in the monetization of GenAI. He expects an increasing number of GenAI solutions to be sold, with the major tech players looking to extend their current offerings, while startups offering solutions for more target-specific use cases.
The rise to $100B equates to an annual growth rate of a staggering 65 percent over the course of four years. Sopra Steria Next suggests a controlled approach to deploying AI technology. More specifically, the report recommends senior executives gradually implement GenAI applications to enable managers and their staff to familiarize themselves with these new tools. The gradual implementation will also allow organizations to embed AI policies and guidelines for complaint use of the technology.
While the growth predicted by Sopra Steria Next for the GenAI market is significant, a recent report by the International Data Corporation (IDC) predicts that spending on GenAI solutions will reach $143B in 2027, with a 5-year CAGR of 73.3 percent.
The IDC expects GenAI growth to follow a natural progression where organizations transition from early experimentation to aggressive build-out with targeted use cases to widespread adoption across business activities.
(cono0430/Shutterstock)
The growth trajectory until 2025 will be somewhat constrained as organizations tackle challenges such as resource allocation, privacy concerns, and AI regulations. The IDC predicts that after a slightly turbulent phase, the GenAI solutions will “become a foundational element in enterprises’ digital business control platforms.”
Bloomberg did a study on a more long-term growth of the GenAI market, and the findings of the report show that the GenAI market could explode to $1.3T in the next 10 years. This includes $280 billion of new software revenue, driven by specialized assistants, new infrastructure products, and copilots that accelerate coding.
According to Mandeep Singh, Senior Technology Analyst at Bloomberg Intelligence, “The world is poised to see an explosion of growth in the generative AI sector over the next ten years that promises to fundamentally change the way the technology sector operates. The technology is set to become an increasingly essential part of IT spending, ad spending, and cybersecurity as it develops.”
The outlook for GenAI for the next decade looks extremely promising. However, the actual growth will depend on how well organizations are able to overcome barriers to growth including closing the AI skills gap and addressing regulatory restrictions and AI ethical concerns.
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