Generative AI Market Size, Share Global Analysis Report, 2024 – 2032

Industry Insights

[206+ Pages Report] According to Facts & Factors, the global generative AI market size was valued at USD 21.56 billion in 2023 and is predicted to surpass USD 517.67 billion by the end of 2032. The generative AI industry is expected to grow by a CAGR of 37.40% between 2024 and 2032.

Market Overview

Generative AI refers to a part of artificial intelligence that is particularly used to create new content based on the given data sets. Generative AI models automate the content creation process, thereby helping businesses save costs, resources, and time. There are different kinds of generative models in the market, such as variational autoencoders, generated adversarial networks, and transformers. Vendors help in customizing generative AI software to help organizations perform specific tasks according to their preferences or needs. 

Key Insights

• As per the analysis shared by our research analyst, the global generative AI market size is estimated to grow annually at a CAGR of around 37.40% over the forecast period (2024-2032).
• In terms of revenue, the global generative AI market size was valued at around USD 21.56 billion in 2023 and is projected to reach USD 517.67 billion by 2032.
• Expansion of AI applications is driving the growth of the global generative AI market.
• Based on the end-users, the BFSI segment is growing at a high rate and is projected to dominate the global market.
• Based on the technology, the transformer segment is projected to swipe the largest market share.
• Based on components, the software segment is expected to dominate the global market.
• Based on model outlook, the large language model segment is anticipated to witness significant developments in the global market.
• Based on region, North America is expected to dominate the global market during the forecast period.

Growth Drivers

• Expansion of AI applications is driving the growth of the global market.

Generative AI is largely being adopted in different end-user sectors, which is a major factor driving the growth of the global generative AI market. Generative AI is widely used in the entertainment sector for creating animations, realistic graphics, and music, which further drives market growth.

However, increasing investments from private and public companies are also expected to support the commercialization of generative AI technologies in the market. Generative AI helps create personalized content based on consumer demands and preferences. It also helps in targeted marketing by assisting businesses improve conversion rates with AI personalization capabilities.

Also, it is being used in the healthcare sector on a large scale for diverse applications. It helps in medical imaging analysis, drug discovery, and personalizing medicines. For instance, SAP SE collaborated with Microsoft to assist consumers in working on their business problems with enterprise-ready innovations in 2023. This strategy is expected to reveal new experiences on how businesses can attract, retain, and qualify their employees.

Restraints

• Ethical and privacy concerns are likely to hinder the growth of the global market.

Generative AI models work on given data sets, which also include some sensitive or personal data. Consequently, there are many concerns regarding the security and privacy of consumer data, which is expected to hamper the growth of the generative AI industry. Also, generative AI is under a strict regulatory framework, which is expected to slow down the growth of the industry.

Opportunities

• Growing demand for automation is expected to foster growth opportunities in the global market.

Businesses are adopting generative AI for automating their content task like creating articles, marketing material, social media posts, and many others, which also helps in saving cost and time. AI-powered virtual assistance and chatbots offer personalized and contextually relevant responses in the customer service field, which further help improve customer support and satisfaction.

Additionally, advancements in AI models are expected to revolutionize the market. High-performing computing resources like CPUs and GPUs are also expected to foster improvements in large generative models. Companies are adopting generative AI to gain a competitive advantage in the global generative AI market by offering innovative products and services. Businesses use these models to reduce manual effort, increase productivity, and streamline operations.

For instance, Microsoft Corp. partnered with Epic System in 2023 to include large model tools and AI in Epic's electronic record software. This collaboration will utilize generative AI to assist healthcare providers in raising productivity.

Challenges

• Technical limitations are a big challenge in the global market.

Generative AI is complex in nature, and its new applications require skilled staff personnel. Moreover, scaling generative AI solutions for further use poses high demands for more advanced infrastructure and computational resources. Therefore, such a landscape is a big challenge in the generative AI industry.

Segmentation Analysis

The global generative AI market can be segmented into end-users, technology, components, model outlook, and regions.

On the basis of end-users, the market can be segmented into gaming, automotive & transportation, healthcare, IT & telecommunication, BFSI, media & entertainment, and others. The BFSI segment accounts for the largest share of the generative AI industry during the forecast period.

The BFSI segment is expanding because of its high market requirements. The sector is the largest user of generative AI technologies. It helps these institutions with data-driven decision-making, customer service, and risk management capabilities. Generative AI can instantly offer end-users a predictive model from the given large data sets, which is difficult for humans.

Also, the BFI sector is under strict regulatory requirements, which further demands advanced solutions to ensure regulatory compliance. Advanced AI also helps with fraud prevention and security tasks by ensuring the safety of financial transactions.

On the basis of technology, the market can be segmented into diffusion networks, variational auto-encounters, transformers, and generative adversarial networks (GANs). Transformer is the fastest-growing segment in the global generative AI market.

Fast infrastructure developments like rising urbanization and expansion of power grids are further posing high demand for transformers in the market to distribute and manage electrical power. Growing industrialization activities, along with the emergence of many smart city projects, are further driving requirements for transformers to improve efficiency and easily manage higher power loads.

Additionally, development and transformation designs, like the emergence of smart transformers, are expected to foster growth opportunities in the segment in the coming years. Rising government initiatives to integrate renewable energy sources into the grid are further expected to foster demand for specialized transformers in the market.

On the basis of components, the market can be segmented into services and software. The software segment is expected to dominate the generative AI industry in the coming years. Organizations across different industry verticals are witnessing digital transformation, thereby boosting the adoption of advanced software solutions to improve operational efficiency. The rising trend of cloud computing is also paving demand for software solutions to facilitate flexibility, scalability, and efficiency.

Moreover, the growing dependence on data analytics and business intelligence in different organizations is also expected to foster growth opportunities in the coming years. Rising cyber-attack cases are another major reason for the high demand for advanced security software solutions to prevent organizations and their sensitive data. Additionally, the growing demand for customization is another crucial factor propelling the need for software solutions in the market.

On the basis of the model outlook, the market can be segmented into multi-models generative models, image & video generative models, large language models, and others. The large language model segment is likely to dominate the global generative AI market during the forecast period.

Advancements in AI and NLP are the major reason for the high growth rate of the segment. These technologies have powerful capabilities for understanding and generating human-like text. However, increasing the inclusion of AI for different purposes like content generation, virtual assistance, chatbots, and translation services is also expected to drive the demand for large language models.

However, the large language models help in excellent performance, such as accuracy, context understanding, and many other tasks, thereby making them more useful in businesses. Large language models are well integrated into different industries like education, healthcare, finance, and technology, as well as technology for content creation, data analysis, and automated customer support.

Report Scope

Regional Analysis

• North America to dominate the global market.

North America is likely to account for the largest share of the global generative AI market during the forecast period. The region is the fastest-growing market because of the high interest of users in advanced technologies. North America is a hub for technological advancements. New York City, Silicon Valley, and Toronto are some of the leading centers of innovation, which in turn will positively impact the growth of the regional market. The US is leading the market in North America because of the growing collaboration between tech companies, research organizations, and academic institutions to come up with innovative solutions in generative AI technologies.

Also, the rules and guidelines for the use of generative AI are further expected to foster growth opportunities in the regional market. North American market deals with large amounts of data, which drives the need for advanced AI solutions to improve performance. Additionally, the increasing investment activities in the region, particularly in the field of AI research and development, are also expected to positively impact the growth trajectory of the regional market during the forecast period.

Asia Pacific is another leading region in the generative AI industry due to the rising adoption of generative AI across different end-user industries. However, the presence of leading market players in Asia Pacific is also expected to positively impact the growth of the market. Urbanization and industrialization in APAC are other major factors driving the growth of the regional market. Government initiatives to promote massive technologies like generative AI are also expected to boost its demand in the market.

The ongoing developments in AI technology in APAC in developing economies like India and China are also expected to expand the capabilities of generative AI in the region. Therefore, such a landscape is expected to foster growth opportunities in the regional market in the coming years. For instance, Mostly AI Inc. revealed its plan to partner with Erste Group in 2021. Erste Group is inclined to enhance its digital banking innovation by working on its data-based development.

Competitive Analysis

The key players in the global generative AI market include:

• Meta
• Amazon Web Services (AWS)
• Microsoft
• Google
• OpenAI
• Rephrase.ai
• Adobe
• Genie AI Ltd.
• MOSTLY AI Inc.
• Synthesia.

For instance, Amazon Web Services Inc. came up with a global generative AI accelerator for startups in 2023. This tool is likely to offer easy access to impactful AI models and tools. Also, there are many customized go-to-market strategies to help users.

The global generative AI market is segmented as follows:

By End-Users Segment Analysis

• Gaming
• Automotive & Transportation
• Healthcare
• IT & Telecommunication
• BFSI
• Media & Entertainment
• Others

By Technology Segment Analysis

• Diffusion Networks
• Variational Auto-Encounters
• Transformers
• Generative Adversarial Networks (GANs)

By Components Segment Analysis

• Services
• Software

By Model Outlook Segment Analysis

• Multi-Models Generative Models
• Image & Video Generative Models
• Large Language Models
• Others

By Regional Segment Analysis

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America