Generative AI Market Set to Skyrocket to $58.5 bn by 2028, Says Omdia Forecast

A recently unveiled forecast by Omdia, a technology research firm, has illuminated the extraordinary growth expected in the market for Generative Artificial Intelligence (GAI) applications.
GAI and AI revenue forecast, world markets 2022-27
According to Omdia’s projections, the GAI market is poised to experience a remarkable surge, expanding from $6.2 billion in 2023 to a staggering $58.5 billion in 2028, representing an impressive Compound Annual Growth Rate (CAGR) of 56 percent.

The inception of the market for Generative AI applications came to fruition in 2023, fueled by a wave of innovation from startups and hyperscalers that introduced extensive language and diffusion models. These models are the fundamental building blocks upon which the GAI ecosystem thrives.

Brad Shimmin, Chief Analyst of AI & Data Analytics at Omdia, noted, “Generative AI has very quickly brought the world to an inflection point, with the technology market rushing forward in what can only be termed a stumbling sprint.”

Generative AI, a subset of the broader AI software market, has not only captured the industry’s attention but is also exerting a significant influence on the entire AI software sector. Omdia estimates that in 2023, GAI will contribute an additional $3 billion to its previous AI market forecast, with a projected contribution of $13 billion in 2027. This substantial impact is set to propel the total AI software market to $160 billion by 2027.

However, Omdia’s forecast also highlights certain challenges and risks associated with GAI. The current iteration of Generative AI has exhibited unreliability in various aspects, including issues related to bias, hallucinations, factual inaccuracies, and copyright infringement. Additionally, the costs associated with GAI applications are currently higher than those of traditional AI approaches.

Over the forecast period, Omdia anticipates that the top four GAI use cases will include virtual assistants, the creation of generative models of the real world, writing assistants, and automated code generation and assistance. These applications are expected to find significant utility across a range of industries.

By industry vertical, consumer-targeted applications (e.g., search engines and computer-aided art and photography) and media and entertainment (e.g., game development and video and audio production and generation) are predicted to be the largest segments driving GAI adoption.

Omdia’s comprehensive Generative AI Software Market Forecast offers in-depth analysis of market drivers, inhibitors, and opportunities for GAI software from 2022 to 2028. It delves into more than 100 use cases across 20 industries, spanning eight world regions and six AI technology workloads, providing valuable insights into the evolving landscape of Generative AI applications.

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