S&P Global Market Intelligence Foresees Rapid Expansion of Generative AI Software Market by 2028 to $52.2 Billion

Rhea-AI Summary

S&P Global Market Intelligence forecasts the generative AI software market to reach $52.2 billion by 2028, with a compound annual growth rate of 58% from 2023. Published by 451 Research, this Generative AI Market Monitor report highlights the rapid adoption of generative AI technologies across various sectors due to advancements in AI models capable of generating new content like text, images, and code. The 2023 market estimate has been revised from $3.7 billion to $5.1 billion. North America currently leads with 64% of revenue, but higher growth rates in Asia-Pacific, Europe, Middle East, and Africa are expected to erode this dominance. Code generators, including popular products like GitHub Copilot, are forecast to see the highest growth, increasing their market share from 6% in 2023 to 10% in 2028. Key areas where generative AI delivers the most value include process automation, customer interaction, and employee training.

Positive

• Generative AI software market projected to reach $52.2 billion by 2028.
• Compound annual growth rate (CAGR) of 58% from 2023.
• 2023 market estimate revised upward from $3.7 billion to $5.1 billion.
• North America currently dominates with 64% of revenue.
• Significant growth expected in Asia-Pacific, Europe, Middle East, and Africa.
• Code generators like GitHub Copilot forecast to grow their market share from 6% in 2023 to 10% in 2028.

Negative

• North America's dominance in the market is expected to decline.
• Increasing competition with an influx of new providers may drive down profit margins.
• Intensified focus on monetization could lead to higher operational costs and financial risks.

Insights

Financial Analyst

The projected expansion of the generative AI software market to $52.2 billion by 2028 is a substantial shift, with a compound annual growth rate (CAGR) of 58%. This suggests a high-growth opportunity for investors. Such a rapid growth rate is very uncommon, indicating strong market momentum. However, it's essential to consider potential risks like technological advancements not meeting expectations or market saturation.

Examining North America's significant dominance (64% of 2023 revenue) implies that major AI development hubs are likely critical in driving innovation. Yet, with the expected higher growth rates in Asia-Pacific and other regions, there could be a diffusion of market power which may influence global investment strategies.

Tech Expert

The progression towards multi-modal AI models is noteworthy, as these models can process and generate multiple data types, such as text and images, enhancing their utility across different applications. This trend signifies a consolidation of capabilities within AI models, thus broadening their scope of use. For investors, understanding which companies are leading in this space could be valuable for identifying potential market leaders.

Code generators' growth from 6% to 10% of the market by 2028 can also be seen as an early indicator of where substantial value is being created. Products like GitHub Copilot are not only improving in performance but driving early demand. Tracking advancements in this sector could provide insights into which investments might yield substantial returns.

Market Research Analyst

From a market research perspective, the increase in the 2023 revenue estimate from $3.7 billion to $5.1 billion suggests that generative AI is being adopted faster than previously anticipated. This revised forecast indicates increased enterprise commitment and resource allocation towards AI, which might stimulate related sectors, such as cloud computing and data analytics.

The primary areas where generative AI is delivering value—process automation, customer interaction and employee training—highlight sectors where AI can enhance operational efficiency and productivity. For investors, companies focusing on these areas may present solid growth potential as they likely benefit from improved cost structures and competitive advantages.

NEW YORK, June 6, 2024 /PRNewswire/ -- As generative artificial intelligence (AI) technology pivots from research to the monetization and product launch stages, the software part of the generative AI market is now forecast to see significant expansion, reaching $52.2 billion by 2028 with a compound annual growth rate of 58% from 2023, according to S&P Global Market Intelligence. 

Published by 451 Research, part of S&P Global Market Intelligence, the Generative AI Market Monitor report highlights an accelerated adoption rate of generative AI technologies across various sectors. This surge is attributed to advancements in AI models capable of generating new content, including text, images and code, leading to enhanced operational efficiencies and innovative applications in business processes.

"Our thorough and granular market forecast for generative AI software demonstrates the huge potential of this general-purpose technology to transform processes and eventually industries. Organizations around the world are committing resources to take advantage of this shift from traditional AI to generative AI," said Nick Patience, managing analyst of Data, AI, Infosecurity & Risk at S&P Global Market Intelligence.

Key highlights from the report include:

• This latest edition reflects a significant upward adjustment in market revenue predictions, with 2023 estimates increasing from $3.7 billion to $5.1 billion and the 2028 forecast climbing from $36 billion to $52.2 billion between our June 2023 and March 2024 publications.
• This accelerated curve can be attributed to three main drivers: expedited enterprise roadmaps for generative AI, an influx of new providers in the market, and intensified focus on monetization as demands for tangible financial results rise.
• North America currently dominates the generative AI market, with 64% of revenue in 2023 going to AI providers headquartered in the region. However, higher growth rates in Asia-Pacific, and Europe, Middle East and Africa are expected to gradually erode North America's dominance.
• The boundaries between different segments are becoming less distinct as multi-modal models—those trained to process and generate different types of data, like text and images—grow more sophisticated and software providers create offerings that span across them.
• Code generators are forecast to see the most pronounced growth rate of any sector, growing their share of the market from 6% in 2023 to 10% in 2028. This growth reflects both the early demand that popular products (like GitHub Copilot) have seen, and the improving performance of leading models. 
• According to S&P Global Market Intelligence's Voice of the Enterprise: AI & Machine Learning, Use Cases 2024 survey, where survey respondents felt they saw generative AI delivering value the most at their organizations was process automation (45%), customer interaction (41%), and employee training (39%).

For more information about the Generative AI Market Monitor & Forecast or to arrange an interview with our analysts, please contact press.mi@spglobal.com. 

S&P Global Market Intelligence's opinions, statements, estimates, projections, quotes and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security, and there is no obligation on S&P Global Market Intelligence to update the foregoing or any other element of the Property. 

About S&P Global Market Intelligence 
At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. Our team of experts delivers unrivaled insights and leading data and technology solutions, partnering with customers to expand their perspective, operate with confidence, and make decisions with conviction. 

S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information, visit www.spglobal.com/marketintelligence. 

Media Contact  

Amanda Oey
S&P Global Market Intelligence  
+1 212-438-1904
amanda.oey@spglobal.com or press.mi@spglobal.com

 

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SOURCE S&P Global Market Intelligence

FAQ

What is the projected size of the generative AI software market by 2028?

The generative AI software market is projected to reach $52.2 billion by 2028.

What is the expected compound annual growth rate for the generative AI software market from 2023?

The expected compound annual growth rate for the generative AI software market from 2023 is 58%.

How much is the generative AI software market estimated to be worth in 2023?

The generative AI software market is estimated to be worth $5.1 billion in 2023.

Which region currently dominates the generative AI market?

North America currently dominates the generative AI market with 64% of the revenue.

Which sector within generative AI is forecast to see the highest growth rate?

Code generators are forecast to see the highest growth rate, increasing their market share from 6% in 2023 to 10% in 2028.

In which areas do organizations find generative AI delivers the most value?

According to the report, generative AI delivers the most value in process automation, customer interaction, and employee training.