TLDR: A new forecast from Gartner, Inc. predicts that global end-user spending on generative AI (GenAI) models will reach $14.2 billion in 2025, a significant increase from $5.7 billion in 2024. This growth of over 148% is driven by the increasing integration of AI capabilities into business operations. While foundational models like Large Language Models (LLMs) will account for the majority of the spending, specialized, domain-specific models are expected to see a rapid rise in adoption.
Global end-user spending on generative AI (GenAI) models is projected to reach $14.2 billion in 2025, a staggering 148% increase from the $5.7 billion forecast for 2024, according to a new study by Gartner, Inc. This surge highlights the accelerating adoption of GenAI technologies as enterprises embed AI-enabled capabilities into their core business functions.
The majority of this spending, approximately $13.1 billion in 2025, will be on foundational GenAI models, such as the large language models (LLMs) that have captured public attention. However, the report indicates a significant trend towards the adoption of specialized, domain-specific GenAI models. These models, which are fine-tuned for specific industries or business functions, are projected to see spending grow more than threefold, from $302 million in 2024 to $1.1 billion in 2025.
Arunasree Cheparthi, Senior Principal Research Analyst at Gartner, commented on this shift: “Organizations are increasingly turning to domain-specific GenAI models because they deliver greater relevance, performance, and cost-efficiency in targeted use cases. While foundation models will continue to be the largest investment area, the momentum is clearly shifting toward vertical AI solutions.”
Gartner predicts that this trend will continue, with more than 50% of all GenAI models deployed by enterprises being domain-specific by 2027, a dramatic increase from just 1% in 2024. This reflects a broader strategic shift in how organizations are approaching AI, prioritizing models that are tailored to their specific operational needs and industry nuances.
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An earlier Gartner report had forecasted that overall global generative AI spending, including hardware, will reach $644 billion in 2025, a 76.4% increase from 2024. The integration of AI capabilities into hardware such as servers, smartphones, and PCs is expected to be a major driver of this spending, accounting for 80% of the total. The report suggests that GenAI will have a transformative impact across all IT spending markets, making AI technologies increasingly integral to both business operations and consumer products.
