Generative AI Market Forecast Raised to $52.2B by 2028

The technology research group 451 Research, located within S&P Global Market Intelligence, has revised its Generative AI Market Monitor and Forecast, predicting the market to reach $52.2 billion by 2028. This adjustment reflects a significant increase in market growth, driven by factors such as accelerated enterprise adoption and the emergence of new providers.

Generative artificial intelligence (AI), which generates new content, saw a pivotal moment with the launch of ChatGPT in November 2022. Despite challenges like Inflection AI's loss of team members to Microsoft, the market is expanding as organizations invest in commercial generative AI tools for process automation, customer interaction, and employee training.

The first edition of the Market Monitor in June 2023 estimated 2023 revenue at $3.7 billion, which has now been revised to $5.1 billion. The market is expected to grow at a compound annual growth rate of 59 percent through 2028. Key factors include the following.

• Enterprise adoption. Rapid enterprise migration to commercial AI tools due to privacy and utility concerns.
• New providers. Expansion from 262 to 398 vendors, including major tech companies and new startups.
• Commercialization trend. Increased pairing of open-source models with commercial offerings.

The United States remains the largest market, but higher growth rates in Asia-Pacific and Europe are expected to reduce North America's market share from 64 percent in 2023 to 55 percent by 2028. Regional dynamics and geopolitical factors will continue to influence the market landscape.

Code generators are forecast to see the most significant growth, driven by high demand and improved model performance, with an aggregate revenue growth of 297 percent in 2023 and 208 percent in 2024.