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Generative AI Spend Set to Hit $1.3 Trillion by 2032, Bloomberg Estimates
Driven by AI pioneers like ChatGPT, the generative AI market is set to explode from $67 billion to an unprecedented $1.3 trillion per year by 2032, reshaping global tech spending over the next decade.
Generative AI spend is set to explode at an astonishing growth rate, Bloomberg predicts. Credit: Bloomberg
🧠 Stay Ahead of the Curve
The generative AI market, led by models like ChatGPT, is projected to surge from $67 billion to $1.3 trillion by 2032, says Bloomberg.
This notable prediction marks a significant change in how global technology spend will be increasingly allocated to AI.
The projected growth underscores how AI's rise is revolutionizing not only the tech market but also job markets and various sectors, hinting at a profound societal transformation.
June 02, 2023
Fueled by the rise of AI models like ChatGPT, the generative AI market is anticipated to balloon to an astonishing $1.3 trillion in annual expenditure, growing rapidly from $40 billion in 2023 and a predicted $67 billion this year, according to a new research report from Bloomberg Intelligence.
This trajectory indicates a formidable 42% annual growth rate over the next decade, with generative AI eventually making up 12% of the global technology expenditure by 2032.
“The world is poised to see an explosion of growth in the generative AI sector over the next ten years that promises to fundamentally change the way the technology sector operates,” said Mandeep Signh, lead researcher behind the Bloomberg Intelligence report.
Established Players, Not Startups, to Reap Most Benefits
Interestingly, the report suggests that the benefits of this growth will predominantly be reaped by established tech heavyweights rather than emerging startups. The frontrunners to seize the gains from this AI surge include Amazon’s cloud division, Microsoft, Google, and Nvidia.
This viewpoint matches that of venture capitalists who have shied away from investing in AI startups based on the belief that incumbents will capture the gains. Sam Lessin, a venture capitalist at Slow Ventures, explained his viewpoint; “unlike a real platform shift, AI is just an accelerant to existing businesses and existing patterns of distribution - and is super-duper easy for incumbents to just slot in to what they already do."
Fueling the AI Boom: Key Sectors
The demand surge for generative AI is expected to originate from several critical sectors, the report estimates. The foremost driver is predicted to be the increasing need for infrastructure capable of training AI models, projected to rise to $247 billion by 2032. Furthermore, generative AI is forecasted to capture a substantial share of the digital advertising market, with a projected spend of $192 billion by 2032. As it stands, the annual global digital ad spend is approximately $500 billion.
The report also anticipates that revenue from AI servers could touch $134 billion per year by 2023. Reflecting this insatiable demand for AI computing power, Nvidia's stock price recently surged over 28% within a week, following the announcement of promising results and an optimistic forecast tied to AI hardware demand. The current demand for AI computing power is so high that cloud providers, such as Microsoft, have rationed compute access for key internal AI teams in order to balance capacity with the intense demand.
AI Emergence Reshaping Job Market Landscape
The swift transformation brought about by AI's rise is also reshaping the job market. In April, Dropbox laid off 16% of its workforce, with CEO Drew Houston explaining this shift as a move towards devoting more resources to AI roles and trimming down mature departments.
Houston declared, "The era of AI computing has finally dawned," further adding, "we've long held the belief that AI will endow us with new capabilities and radically transform knowledge work. Our product pipeline this year is a testament to our commitment towards this future."
Wall Street, too, is experiencing an AI-driven shift in hiring. Data from consulting firm Evident reveals that 40% of all open roles at several of the largest banks are now for AI-related jobs such as data engineers, quants, and more.
Evident's CEO and co-founder, Alexandra Mousavizadeh, commented that the launch of ChatGPT in 2022 has "made everyone - from the board and CEO to the leadership across the banks - acutely aware of the transformative power of AI." She described the increased competition for talent as an "AI arms race," brewing across various industries.
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