In a recent report viewed by Insider, Bloomberg Intelligence projects a remarkable surge of interest in the generative AI industry following the releases of AI tools such as ChatGPT and Google Bard. The report forecasts that revenues within the sector could soar to over $1.3 trillion within the next decade, representing a staggering compounded annual growth rate of 42%.
According to Bloomberg’s analysis, the generative AI industry generated approximately $40 billion in revenues in 2022 alone. Looking ahead, the report anticipates that this figure could skyrocket to $1.32 trillion by 2032, driven by diverse business areas and their respective growth trajectories.
Among the various business areas outlined in the report, AI software, encompassing AI assistants, infrastructure products, and coding acceleration programs, is expected to contribute significantly to the industry’s expansion. Bloomberg projects that this sector alone could generate $280 billion in revenues by 2032, reflecting an impressive annual growth rate of 69%.
While AI software plays a crucial role, the lion’s share of the projected $1.3 trillion in revenue will stem from hardware-related investments. Bloomberg’s estimates suggest that hardware will account for $641 billion by 2032, with devices contributing $168 billion and infrastructure comprising $473 billion.
Within the hardware category, revenue sources will include AI servers, AI storage, computer vision AI products, and conversational AI tools, which are predicted to be valued at $108 billion.
Additionally, the report highlights the substantial revenue potential of digital ads related to AI, projected to reach $192 billion. AI assistant software, on the other hand, is expected to be valued at $89 billion.
Bloomberg Intelligence’s report indicates that generative AI is poised to make up approximately 10 to 12% of the total IT hardware, software services, ad spending, and gaming markets by 2032, a significant increase compared to its current share of less than 1%.
Mandeep Singh, senior technology analyst at Bloomberg Intelligence and lead author of the report, emphasized the transformative potential of the generative AI sector. “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,” Singh stated in a press release.
As the generative AI industry gains momentum and continues to reshape the technology landscape, the forecasted growth outlined in Bloomberg’s report indicates an exciting future for this burgeoning field.