Bloomberg Intelligence: New Report Finds That the Emerging Industry Could Grow at a CAGR of 42% Over the Next 10 Years

Rising demand for generative AI products could add about $280 billion of new software revenue

New York, June 01, 2023 — With the influx of consumer generative AI programs like Google’s Bard and OpenAI’s ChatGPT, the generative AI market is poised to explode, growing to $1.3 trillion over the next 10 years from a market size of just $40 billion in 2022, according to a new report by Bloomberg Intelligence (BI). Growth could expand at a CAGR of 42%, driven by training infrastructure in the near-term and gradually shifting to inference devices for large language models (LLMs), digital ads, specialized software and services in the medium to long term, BI’s research finds.

Moreover, rising demand for generative AI products could add about $280 billion of new software revenue, driven by specialized assistants, new infrastructure products, and copilots that accelerate coding. Companies like Amazon WebServices, Microsoft, Google and Nvidia could be the biggest beneficiaries, as enterprises shift more workloads to the public cloud.

BI estimates that generative AI is poised to expand its impact from less than 1% of total IT hardware, software services, ad spending, and gaming market spending to 10% by 2032. The largest drivers of incremental revenue will be generative AI infrastructure as a service ($247 billion by 2032) used for training LLMs, followed by digital ads driven by the technology ($192 billion) and specialized generative AI assistant software ($89 billion). On the hardware side of this, revenue will be driven by AI servers ($132 billion), AI storage ($93 billion), computer vision AI products ($61 billion) and conversational AI devices ($108 billion).