Gartner predicts worldwide spending on generative AI will reach $1.4 trillion by 2025

Global spending on Generative Artificial Intelligence (GenAI) is expected to total US$1.4T644 billion in 2025, an increase of US$76.41T3T from 2024, according to a forecast by the Gartner, Inc..

“Expectations regarding the resources of Generative Artificial Intelligence are declining due to high failure rates in early proof-of-concept (POC) work and dissatisfaction with GenAI’s current results,” says John-David Lovelock, Vice President and Analyst at Gartner. “Despite this, vendors of model bases are investing billions annually to improve the size, performance and reliability of generative AI models. This paradox will persist through 2025 and 2026.”

“Ambitious internal projects from 2024 will face rigorous scrutiny in 2025 as CIOs (Chief Information Officers) will opt for commercial off-the-shelf solutions for more predictable deployments and business value. Despite improvements in the model, CIOs will reduce POC and in-house development efforts, focusing instead on GenAI capabilities from existing software vendors,” says Lovelock.

Spending on Generative AI is expected to see significant growth across all major markets and submarkets by 2025. GenAI will have a transformative impact on all aspects of IT spending markets, suggesting a future where AI technologies will increasingly become an integral part of business operations and consumer products.

AI-enabled consumer devices will drive GenAI spending

GenAI spending in 2025 will be driven largely by the integration of AI capabilities into hardware such as servers, smartphones and PCs, with 80% of Generative Artificial Intelligence spending going to hardware.

“The market growth trajectory is heavily influenced by the increasing prevalence of AI-enabled devices, which are expected to account for nearly the entire consumer device market by 2028,” says Lovelock. “However, consumers are not seeking out these capabilities. As manufacturers incorporate AI as a standard functionality into consumer devices, consumers will be forced to buy them.”

Gartner’s GenAI spending forecast methodology relies heavily on rigorous analysis of sales from more than 1,000 vendors across the full range of GenAI products and services. Gartner uses primary research techniques, supplemented by secondary research sources, to create a comprehensive database of market size data on which to base its forecast.

Gartner’s Generative AI Spending Forecast provides a unique perspective on GenAI spending across IT hardware, software and services. These reports help Gartner clients understand market opportunities and challenges. The latest GenAI Spending Forecast research is available to Gartner clients at:Forecast Alert: GenAI IT Spending, 2023-2028, Worldwide”.

Topics such as Generative Artificial Intelligence and others that shape the priorities for data, analytics and AI leaders and show how they can leverage the latest developments and trends to accelerate business will be highlighted in the Gartner Data & Analytics Conference 2025, which will be held on April 28th and 29th, at the Sheraton São Paulo WTC Hotel.

About the Gartner Data & Analytics Conference

Gartner analysts will provide additional analysis on data and analytics trends at the Gartner Data & Analytics Conferences, taking place April 28-29 in Sao Paulo (Brazil), from May 12 to 14 in London (England); from 20 to 22 May in Tokyo (Japan); on June 2 and 3 in Mumbai (India) and on June 17 and 18 in Sydney (Australia). Follow conference news and updates on X using #GartnerDA. 

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The Gartner for High Tech helps technology leaders and their teams with role-based best practices, industry insights, and strategic insights into emerging trends and market shifts to achieve their mission-critical priorities and build the successful companies of tomorrow. For more information, visit: www.gartner.com/en/industries/high-tech. Follow the news and updates from Gartner for High Tech at X and in LinkedIn using #GartnerHT.

About Gartner  

O Gartner, Inc. delivers objective, actionable insights that drive smarter decisions and better performance for enterprises’ mission-critical priorities. To learn more, visit www.gartner.com