TLDR: Global end-user spending on Generative AI (GenAI) models is forecast to reach $14.2 billion in 2025, according to Gartner research. This significant growth, a 148.3% increase from 2024, is fueled by both foundational and emerging domain-specific language models (DSLMs). While foundational models continue to attract the largest investment, enterprises are increasingly adopting specialised GenAI models for improved performance, cost-efficiency, and relevance in targeted use cases. By 2027, over half of enterprise GenAI models are expected to be domain-specific.
The global market for Generative Artificial Intelligence (GenAI) models is set for a substantial surge, with end-user spending projected to reach USD $14.2 billion in 2025. This forecast, detailed in recent research from Gartner, highlights a remarkable 148.3% increase in spending compared to 2024, indicating the rapid integration of GenAI across various industries.
A key driver of this growth is the continued investment in foundational GenAI models, which are trained on vast datasets for diverse tasks. Spending on these models is expected to climb from USD $5.4 billion in 2024 to USD $13.1 billion in 2025, representing a year-on-year growth of 141.0%.
However, the market is also witnessing the emergence of a significant new category: specialised generative AI models, including domain-specific language models (DSLMs). These models, trained or fine-tuned with data specific to certain industries or business processes, are designed to deliver tailored and more relevant outputs. Spending on DSLMs is forecast to rise dramatically from USD $302 million in 2024 to USD $1.1 billion in 2025, marking a staggering 279.2% year-on-year increase.
Arunasree Cheparthi, Senior Principal Research Analyst at Gartner, emphasized the strategic shift occurring within enterprises. “Foundation GenAI models (including LLMs) are trained on vast amounts of data and used for many different tasks. They are the first models supporting GenAI and will continue to represent the largest area of spending by organisations in the coming years,” Cheparthi stated.
She further elaborated on the growing preference for targeted AI solutions: “However, organisations are also turning to more domain-specific or vertical GenAI models because they offer improved performance, cost, reliability and relevance in targeted enterprise use cases over foundation models.”
This trend is expected to accelerate significantly. Currently, specialised models account for only 1% of GenAI models used by enterprises in 2024. However, Gartner predicts that by 2027, this figure will soar to more than 50%, underscoring a substantial transformation in enterprise AI strategies.
The rapid adoption of GenAI, particularly since the launch of conversational AI tools like ChatGPT in late 2022, has spurred this investment surge. Beyond financial growth, the report also touches upon sustainability, predicting that by 2028, 30% of GenAI deployments will be optimized using energy-efficient computation methods, driven by environmental goals.
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This news was originally highlighted by IT Brief Australia on September 29, 2025.
