Generative AI Market - Global Outlook & Forecast 2024-2029

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THE GLOBAL GENERATIVE AI MARKET SIZE IS EXPECTED TO REACH USD 96.35 BILLION BY 2029 FROM USD 14.16 BILLION IN 2023, GROWING AT A CAGR OF 37.65% DURING THE FORECAST PERIOD.

The Generative AI Market Size, Share, & Trends Analysis Report By

  • Component: Services and Software
  • Type: Text, Audio, Video, Image, and Others
  • Business Model: Subscription-based and Ad-based
  • End-user: Enterprises and Individual
  • Enterprises: Media & Entertainment, Telecommunication, Retail, Public Sector, Financial Services, Healthcare, and Others
  • Model: Diffusion Model, Generative Adversarial Networks, Transformer Based Models, Variational Autoencoders, and Others
  • Geography: North America, Europe, APAC, Latin America, and Middle East & Africa

Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast 2024–2029.

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GLOBAL GENERATIVE AI MARKET REPORT SCOPE

REPORT ATTRIBUTEDETAILS
Market Size (2029)USD 96.35 Billion
Market Size (2023)USD 14.16 Billion
CAGR (2023-2029)37.65%
HISTORIC YEAR2020-2022
BASE YEAR2023
FORECAST YEAR2024-2029
SEGMENTS BYComponent, Type, Business Model, End-user, Enterprises, Model, and Geography
GEOGRAPHIC ANALYSIS North America, Europe, APAC, Latin America, and Middle East & Africa
KEY PLAYERSAnthropic PBC, Amazon Web Services, Inc., Cohere, Glean Technologies, Inc., Google LLC (Alphabet), Hugging Face, Jasper AI Inc., Microsoft Corporation, Nvidia Corporation, and OpenAI
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MARKET INSIGHTS

The global generative AI market size was valued at USD 14.16 billion in 2023 and is expected to reach USD 96.35 billion by 2029, growing at a CAGR of 37.65% during the forecast period. The market key drivers include advanced AI technologies characterized by deep learning, natural language processing, and reinforcement learning. With considerable upgrades in business models and operation techniques, the market can witness further traction supported by supportive protocols from the government and corporate policies. Improving awareness regarding gen-AI and the growing skilled workforce, especially in the emerging economies of APAC and Latin America, are expected to drive the global generative AI market during the forecasted period. Furthermore, in the global gen-AI market, the U.S. is the leading country globally. Gen-AI has found significant adoption in enterprises where telecommunication, media & entertainment, the public sector, and healthcare are major end-user industries.

TECHNOLOGICAL ADVANCEMENTS

Technological advancements in the generative AI market drive insightful transformations across industries, revolutionizing how businesses operate and interact with customers. These advancements involve various innovations spanning hardware, software, algorithms, and data analytics, collectively propelling the capabilities and applications of AI.

Gen-AI technological progress is a breakthrough in deep learning algorithms and neural network architectures. Deep learning techniques, inspired by the structure and function of the human brain, have enabled AI systems to achieve remarkable feats in tasks such as image recognition, natural language processing, and decision-making. Moreover, advancements in neural network architectures, such as convolutional neural networks (CNNs) and recurrent neural networks (RNNs), have significantly enhanced the efficiency and accuracy of AI models, paving the way for more sophisticated applications in areas like healthcare, finance, and autonomous vehicles.

Additionally, merging AI with other emerging technologies fuels exponential growth and innovation in the global generative AI market. For instance, integrating AI with big data analytics enables organizations to extract valuable insights from vast and complex datasets, driving informed decision-making and predictive capabilities. Similarly, the combination of AI with the Internet of Things (IoT) facilitates the creation of intelligent and interconnected systems capable of sensing, analyzing, and responding to real-time data streams in diverse environments.

In addition to software advancements, significant progress has been made in AI hardware, particularly in developing specialized processing units optimized for AI workloads. Graphics processing units (GPUs), tensor processing units (TPUs), and field-programmable gate arrays (FPGAs) are among the key hardware technologies powering the acceleration of AI computations, enabling faster training and inference tasks. Moreover, quantum computing advancements promise to increase AI's computational power exponentially, potentially unlocking new machine learning and optimization frontiers.

Moreover, the democratization of AI tools and platforms is democratizing access to AI capabilities, empowering individuals and organizations of all sizes to harness the power of AI for innovation and problem-solving. Open-source frameworks such as TensorFlow, PyTorch, and Scikit-Learn, coupled with cloud-based AI services from major providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, are lowering the barriers to entry and fostering a vibrant ecosystem of AI development and deployment.

Therefore, technological advancements in the generative AI market drive unprecedented progress and innovation, unlocking new opportunities for businesses, researchers, and society. From breakthroughs in deep learning algorithms to the convergence of AI with other emerging technologies, the trajectory of gen-AI continues to evolve rapidly, shaping the future of industries and reshaping the human experience.

MARKET TRENDS & DRIVERS

Rising Investments and Fundings
The generative AI market is experiencing a surge in growth due to the significant funding from industry giants. These substantial investments propel the development and adoption of Gen-AI technologies across various sectors. Big players in the IT and tech industry, such as Google, Microsoft, and IBM, are investing substantial funds into Gen-AI infrastructure and research & development. For instance, according to a news article published in March 2024, Microsoft and OpenAI are expected to allocate between $100 billion and $115 billion investment toward a new supercomputer named Stargate, as the technology-focused business publication The Information reports. This investment is expected to create an infrastructure capable of supporting generative artificial intelligence (AI) applications.

Rapid Adoption of Artificial Intelligence
The rapid adoption of Artificial Intelligence (AI) is transforming industries globally, reshaping business operations, and driving innovation across various sectors. AI technologies, including machine learning, natural language processing, and computer vision, have grown significantly in recent years, offering organizations powerful tools to automate tasks, improve decision-making, and deliver personalized customer experiences. For instance, in 2023, the NSF announced that it would invest $140 million in establishing seven new AI research institutes in the United States.

INDUSTRY RESTRAINTS

Shortage of Skilled Workforce
The shortage of skilled workers poses a significant challenge for the generative AI market. Developing and deploying Gen-AI solutions requires diverse skills, including expertise in machine learning, data science, software engineering, and domain-specific knowledge. For instance, Microsoft’s 2023 Work Trend Index highlights that 82% of leaders recognize the pressing need to prepare their workforce for the expanding AI landscape. Additionally, organizations like Amazon, Ericsson, and PwC are heavily investing in upskilling and reskilling initiatives to build employees’ AI capabilities. Furthermore, in a recent survey, 40% of CEOs cite a lack of AI-related knowledge and skills within their HR team as the biggest obstacle to AI integration.

SEGMENTATION INSIGHTS

INSIGHTS BY COMPONENT
The global generative AI market by component is segmented into services and software. The service component segment is expected to be the largest in the global gen-AI market. The industry is gaining momentum due to the rising demand for effectiveness and efficiency among various industries and individuals, the improving accuracy, increasing disposable income, and supporting norms regarding gen-AI support the services of gen-AI during the forecast period. The gen-AI service segment encompasses a range of offerings designed to assist users in generating content, enhancing creativity, and automating tasks. These services typically leverage deep learning techniques, such as generative adversarial networks (GANs) and autoregressive models, to produce outputs that mimic or augment human creativity.

INSIGHTS BY TYPE
The global generative AI market by type is segmented into text, audio, video, image, and others. The text-type segment held the largest segmental market share in 2023. Text gen-AI represents a powerful technology with a wide range of applications in content generation, language processing, and conversational interfaces. While text gen-AI offers many benefits, including efficiency, scalability, and creativity, it poses challenges related to context understanding, bias, and ethical concerns. By addressing these challenges and leveraging ongoing advancements in AI research, text gen-AI can drive innovation and transform how end-users communicate, create, and interact with information in the digital age.

INSIGHTS BY BUSINESS MODEL
The subscription-based business model segment dominated the global generative AI market share in 2023. A subscription-based Gen-AI business model is where customers pay a recurring fee to access Gen-AI software or services on a subscription basis. Instead of purchasing the software outright, customers subscribe to use it for a period, typically monthly or yearly. This model allows businesses to access the benefits of Gen-AI without large upfront costs and provides flexibility in usage based on changing needs. Subscription-based models often include regular updates, support, and access to new features, offering ongoing value to subscribers. Subscription-based models also lower entry barriers for businesses that want to adopt Gen-AI technology.

INSIGHTS BY END USER
The enterprise end-user segment holds the most significant share of the global generative AI market in 2023. Gen-AI is restructuring enterprises by offering innovative solutions to diverse challenges across industries. From retail and entertainment to healthcare and finance, gen-AI is revolutionizing how businesses operate, driving efficiency, enhancing customer experiences, and fostering innovation. As gen-AI technologies evolve and mature, businesses can expect to see even greater benefits, from improved decision-making and productivity to new opportunities for growth and competitive advantage.

INSIGHTS BY ENTERPRISES
The global generative AI market by enterprises is segmented into media & entertainment, telecommunication, retail, public sector, financial services, healthcare, and others. The media & entertainment holds the most significant segmental market share in 2023. Generative Artificial Intelligence (gen-AI) is revolutionizing the media and entertainment industry by offering innovative solutions that enhance content creation, production, and audience engagement. With gen-AI, media professionals can leverage advanced algorithms to generate realistic images, videos, and audio, automate repetitive tasks, and personalize content for diverse audiences. Also, gen-AI enhances virtual reality (VR) and augmented reality (AR) experiences by creating realistic digital avatars and personalized interactions. These immersive experiences engage users more effectively, adding realism and interactivity to VR/AR environments.

INSIGHTS BY MODEL
The global generative AI market by model is segmented into diffusion models, generative adversarial networks, transformer based models, variational autoencoders, and others. The diffusion model segment is expected to be the largest in the global gen-AI market. Diffusion-based gen-AI models revolutionize various industries and enhance user experiences. These models leverage sophisticated algorithms to generate content, images, and text, catering to diverse user needs and preferences. The primary drivers are the increasing demand for personalized and interactive content across marketing, e-commerce, and entertainment sectors.

GEOGRAPHICAL ANALYSIS

In recent years, the increasing disposable income, the growth in adoption of AI technologies, and the expansion of various industries globally have driven the demand for gen-AI solutions across the globe. Implementing supportive government and private bodies' regulations also fuels the demand for gen-AI solutions. The global generative AI market is highly developed in North America, Europe, and APAC, owing to the increasing penetration of gen-AI technology. On the other hand, Latin America and the Middle East are highly potential markets with enough opportunity for growth. North America dominated the global generative AI market share, with a revenue share of over 42% in 2023. The North American gen-AI market is experiencing significant growth and evolution, driven by a convergence of technological advancements and increasing demand for AI-driven solutions across various industries. The key drivers behind the rapid expansion of the North American gen-AI market are the increase in AI algorithms and platforms. Innovations in deep learning, natural language processing, and computer vision have enabled gen-AI systems to autonomously create complex and realistic content.

COMPETITIVE LANDSCAPE

The global generative AI market is highly competitive, with the presence of big corporations and start-up companies. The rapid technological changes adversely impact market vendors as consumers increasingly expect continuous technology-enabled innovations and upgrades to existing products. The present scenario drives vendors to alter and refine their unique value propositions to achieve a strong market presence. The key players in the global generative AI market are Anthropic PBC, Amazon Web Services, Inc., Cohere, Glean Technologies, Inc., Google LLC (Alphabet), Hugging Face, Jasper AI Inc., Microsoft Corporation, Nvidia Corporation, and OpenAI. Further, the presence of diversified global and regional vendors characterizes the market. Many big corporations collaborate with start-ups to enhance several product features by accuracy, number of use cases, and generating various types of content such as text, image, video, audio, etc. Such initiatives are expected to enable vendors to gain a competitive edge over other vendors in the market.

As international players continue expanding their footprint in the generative AI market, regional vendors will likely find competing increasingly difficult with global players. The competition will be solely based on features such as quality, technology, services, and price. The market competition is expected to intensify further with the rising frequency of product/service extensions, technological innovations, collaborations, and mergers & acquisitions.

Frequently Asked Questions

Which region dominates the global generative AI market share?

North America held the largest global generative AI market share, accounting for a share of over 42% in 2023.

How big is the generative AI market?

The global generative AI market size was valued at USD 14.16 billion in 2023 and is expected to reach USD 96.35 billion by 2029.

What is the growth rate of the global generative AI market?

The global generative AI market is expected to grow at a CAGR of 37.65% from 2023 to 2029.

Who are the key players in the global generative AI market?

Anthropic PBC, Amazon Web Services, Inc., Cohere, Glean Technologies, Inc., Google LLC (Alphabet), Hugging Face, Jasper AI Inc., Microsoft Corporation, Nvidia Corporation, and OpenAI are the key players in the global generative AI market.

What are the significant trends in the generative AI industry?

Growing demand for real-time capabilities in Gen-AI, adoption of multi-modal capabilities in Gen-AI, personalization and customization on Gen-AI platforms, rising investments and funding, and expanding Gen-AI through inter-company collaboration are significant trends in the generative AI industry.

The global generative AI market size is expected to grow at a CAGR of approximately 37.65% from 2023 to 2029.

The following factors are likely to contribute to the growth of the generative AI market during the forecast period:

  • Rapid Adoption of Artificial Intelligence
  • Growing Need for Chatbots and Virtual Assistants Across Industries
  • Increased Availability of Consumer Generative AI Programs
  • Rapid Growth in Content Generation and Innovative Applications

Base Year: 2023

Forecast Year: 2024-2029

The report considers the present scenario of the global generative AI market and its market dynamics for 2024−2029. It covers a detailed overview of several market growth enablers, restraints, and trends. The study covers both the demand and supply sides of the market. It also profiles and analyzes leading companies and several other prominent companies operating in the industry.

Key Company Profiles

  • Anthropic PBC
    • Business Overview
    • Product/Service Offerings
    • Key Strategies
    • Key Strengths
    • Key Opportunities
  • Amazon Web Services, Inc.
  • Cohere
  • Glean Technologies, Inc.
  • Google LLC (Alphabet)
  • Hugging Face
  • Jasper AI Inc.
  • Microsoft Corporation
  • Nvidia Corporation
  • OpenAI

Other Prominent Vendors

  • Adept AI
    • Business Overview
    • Product/Service Offerings
    • Key Strategies
    • Key Strengths
  • Adobe
  • Alphacode
  • C3.ai, Inc.
  • CopyAI, Inc
  • Databricks
  • Dataroots BV
  • Drafter AI
  • GitHub, Inc.
  • Grammarly Inc.
  • Hour One
  • International Business Machines Corporation
  • Inflection
  • Inworld AI
  • Lily AI
  • Meta
  • MOSTLY AI
  • SOUNDRAW
  • STABILITY AI LTD
  • Synthesia Limited

Segmentation by Component

  • Services
  • Software

Segmentation by Type

  • Text
  • Audio
  • Video
  • Image
  • Others

Segmentation by Business Model

  • Subscription Based
  • Ad Based

Segmentation by End-user

  • Enterprises
  • Individual

Segmentation by Enterprises

  • Media & Entertainment
  • Telecommunication
  • Retail
  • Public Sector
  • Financial Services
  • Healthcare
  • Others

Segmentation by Model

  • Diffusion Model
  • Generative Adversarial Networks
  • Transformer Based Models
  • Variational Autoencoders
  • Others

Segmentation by Geography

  • North America
    • The U.S.
    • Canada
  • Europe
    • Germany
    • The U.K.
    • France
    • Italy
    • Spain
    • Poland
    • Norway
  • APAC
    • China
    • Japan
    • India
    • Australia
    • South Korea
    • Indonesia
    • Singapore
    • Philippines
    • Malaysia
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • Israel
    • UAE
    • South Africa

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Frequently Asked Questions

Which region dominates the global generative AI market share?

North America held the largest global generative AI market share, accounting for a share of over 42% in 2023.

How big is the generative AI market?

The global generative AI market size was valued at USD 14.16 billion in 2023 and is expected to reach USD 96.35 billion by 2029.

What is the growth rate of the global generative AI market?

The global generative AI market is expected to grow at a CAGR of 37.65% from 2023 to 2029.

Who are the key players in the global generative AI market?

Anthropic PBC, Amazon Web Services, Inc., Cohere, Glean Technologies, Inc., Google LLC (Alphabet), Hugging Face, Jasper AI Inc., Microsoft Corporation, Nvidia Corporation, and OpenAI are the key players in the global generative AI market.

What are the significant trends in the generative AI industry?

Growing demand for real-time capabilities in Gen-AI, adoption of multi-modal capabilities in Gen-AI, personalization and customization on Gen-AI platforms, rising investments and funding, and expanding Gen-AI through inter-company collaboration are significant trends in the generative AI industry.