Generative AI Revenue Will Reach $1.3T in 2032 [Chart]
The market for generative AI is poised for massive growth over the next decade, according to a forecast from Bloomberg Intelligence. The report predicts the industry will expand at a 42% compound annual rate from $40 billion in 2022 to $1.3 trillion by 2032. Bloomberg believes generative AI will account for 12% of total IT spending by the end of the forecast period, up from less than 1% today. The growth will be driven by software providers rapidly adopting the technology and enterprises deploying custom solutions.
In 2022, 85% of revenue was tied to computing infrastructure for training models, with 10% for inference, and 5% for software, web, and professional services. But, the report predicts that software will reach $280 billion in annual revenue by 2032 as commercialization accelerates.
Training costs are currently higher than inference, reflecting the research and development phase of the market. Massive investments in large language models are needed to develop commercial products and capture future revenue. Venture capital investment remains robust even at high valuations, given the total addressable market. The report noted that while some segments will displace existing spend in areas like advertising and education, much of the growth will be new.
The rapid maturation of generative AI capabilities is leading organizations in every industry to rethink assumptions and integrate the technology into products and services. The report suggests training infrastructure will be a $473 billion market, while services reach $380 billion.
The pace of the rising revenue may seem unlikely at first glance, but, as Bloomberg notes, it makes sense when considering the transformational nature of generative AI. The findings highlight the vast commercial potential of generative AI as a ubiquitous new software capability. With leading technology companies and startups racing to stake their claims, generative AI may fundamentally reshape the IT landscape.