Will global end-user expenditure on GenAI models hit $14.2 billion by 2025?
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Synopsis
Gartner's recent report forecasts a remarkable growth trajectory for global end-user spending on generative AI models, projecting it to reach $14.2 billion by 2025. As organizations increasingly adopt specialized models, the impact of AI technologies on business operations is set to be transformative.
Key Takeaways
- Global end-user spending on GenAI is projected to hit $14.2 billion by 2025.
- Specialized GenAI models are expected to comprise more than half of enterprise usage by 2027.
- Organizations are increasingly adopting domain-specific models for better performance and relevance.
- Generative AI spending will largely focus on hardware integration.
- Foundational model providers are investing heavily to enhance GenAI capabilities.
New Delhi, July 10 (NationPress) A report by Gartner revealed on Thursday that global end-user expenditure on generative AI (GenAI) models is anticipated to soar to $14.2 billion by the year 2025.
This year's end-user spending on specialized GenAI models, which encompass domain-specific language models (DSLMs), is projected to reach $1.1 billion.
These specialized GenAI models are specifically trained or fine-tuned on data pertinent to industry or business processes.
According to Gartner, by 2027, it is expected that more than half of the GenAI models utilized by enterprises will be domain-specific, a significant increase from just 1 percent in 2024.
“Foundation GenAI models (including LLMs) are trained on extensive datasets and serve multiple tasks. They are the initial models supporting GenAI and will continue to dominate organizational spending in the years ahead,” stated Arunasree Cheparthi, Senior Principal Research Analyst at Gartner.
Nonetheless, organizations are increasingly adopting more domain-specific or vertical GenAI models due to their enhanced performance, cost-effectiveness, reliability, and relevance for targeted enterprise applications, she noted.
An earlier report from Gartner had projected that global spending on generative AI is set to reach $644 billion in 2025, reflecting a dramatic increase of 76.4 percent from 2024. This surge in GenAI spending will primarily be fueled by the integration of AI technologies into hardware, including servers, smartphones, and PCs, with 80 percent of GenAI expenditure directed towards hardware.
GenAI spending is expected to experience substantial growth across all core markets and submarkets in 2025. GenAI will profoundly influence all facets of IT expenditure markets, indicating a future where AI technologies become ever more essential to business operations and consumer products, as noted in the report.
Providers of foundational models are investing billions each year to improve the size, performance, and reliability of GenAI models. This trend is likely to persist through 2025 and 2026.
Point of View
I assert that the projected increase in generative AI spending highlights a pivotal moment for businesses. The rapid adoption of specialized models signifies a transition towards more tailored AI solutions that promise to enhance efficiency and relevance across various sectors. Our nation must embrace this technological shift to remain competitive on a global scale.
NationPress
31/08/2025
Frequently Asked Questions
What is generative AI?
Generative AI refers to algorithms that can generate new content, from text to images, based on training from existing data.
How much will global spending on generative AI reach by 2025?
Global spending on generative AI is projected to reach $14.2 billion by 2025 according to Gartner.
What are specialized GenAI models?
Specialized GenAI models are tailored to specific industries or business functions and are trained on relevant data.
What is the significance of domain-specific models?
Domain-specific models offer better performance, cost-efficiency, and relevance for targeted enterprise applications compared to general models.
What is the expected growth rate for generative AI spending?
Generative AI spending is expected to rise by 76.4% from 2024 to 2025, reaching $644 billion.
