TLDR: The global generative artificial intelligence (GenAI) market experienced substantial growth in 2024, reaching an estimated value exceeding $130 billion, according to a new research report from IoT analyst firm Berg Insight. This surge was fueled by triple-digit growth across hardware, foundation models, and development platforms, highlighting GenAI’s disruptive potential across industries.
The global generative artificial intelligence (GenAI) market has witnessed an explosive expansion in 2024, with its total value, significantly driven by hardware systems, reaching an estimated $130 billion. This remarkable growth is detailed in a new research report from Berg Insight, a prominent IoT analyst firm, which highlights triple-digit growth rates across all three primary segments of the GenAI ecosystem: hardware, foundation models, and development platforms.
According to Berg Insight’s findings, the market for GPU-based hardware systems, crucial for powering GenAI workloads, generated substantial revenues of approximately $132.3 billion in 2024. This segment represents the largest component of the burgeoning GenAI market. Beyond hardware, the report indicates that the market value for GenAI development platforms reached an estimated $17.0 billion. Furthermore, foundation models, which form the core of GenAI capabilities, accounted for an estimated $4.1 billion in market value, a figure that excludes end-user applications like ChatGPT and primarily reflects income from API services or license fees for model usage on development platforms.
Melvin Sörum, an IoT Analyst at Berg Insight, emphasized the transformative nature of this technology. “The GenAI hype is not without merit, since its ability to creatively generate convincingly human-like content makes it a disruptive technology with the potential to influence nearly every industry,” stated Sörum. He further elaborated on the distinction between traditional AI and GenAI, noting, “Even though traditional AI systems have been used commercially for many years, GenAI is a more novel practice that enables computer systems to produce original content – including text, images, video, audio and software code – rather than merely analysing existing data or making predictions.”
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Before 2023, the adoption and commercial use of GenAI technology were virtually non-existent. The market’s rapid ascent was largely ignited by the widespread attention garnered by OpenAI’s ChatGPT, which served as the first widely adopted commercial product to introduce GenAI to the mainstream. Since then, a diverse array of enterprises, ranging from innovative startups to established technology giants, have poured significant investments into the sector, all vying to capitalize on its immense market potential. However, the report also points out that the substantial computational resources required for training and running advanced AI models mean the market is predominantly controlled by large technology conglomerates and companies that have successfully secured considerable funding.
