13 April 2025, Sun |
3:21 PM
Worldwide spending on generative AI (GenAI) is expected to reach $644 billion in 2025, a 76.4% increase from 2024, according to Gartner. Despite the rapid growth, expectations for GenAI are cooling due to high failure rates in early proof-of-concept (POC) projects and dissatisfaction with current results.
John-David Lovelock, Distinguished VP Analyst at Gartner, explains that while foundational model providers continue investing billions to enhance AI capabilities, many businesses are rethinking their strategies. CIOs are now shifting from experimental AI projects to commercial off-the-shelf solutions for better predictability and business value. Instead of building their own models, companies will increasingly rely on AI features offered by existing software providers.
GenAI spending will rise across all key segments, with the biggest investments in hardware. Servers, smartphones, and PCs with built-in AI capabilities will drive most of the growth. By 2028, AI-powered devices are expected to dominate the consumer market. However, consumer demand for AI features remains lukewarm. Lovelock notes that manufacturers are embedding AI into products as a standard feature, leaving consumers with little choice but to adopt it.
Gartner’s forecast is based on extensive analysis of sales data from over 1,000 vendors worldwide. The latest research, Forecast Alert: GenAI IT Spending, 2023-2028, Worldwide, provides insights into emerging trends, market shifts, and investment strategies.
