Spend a Lot More on Generative AI in 2025, Gartner Predicts
You know all that money your company may already be spending on generative AI products and projects? Well, be prepared to spend a lot more in the coming year.
As generative AI, or gen AI, becomes more integral to business operations and consumer products, spending is expected to rise dramatically. In its latest forecast, Gartner predicts that the amount of money spent around the world on this hot flavor of AI will total $644 billion this year, an increase of 76.4% from last year.
The Promise of Gen AI
One problem with gen AI, as it currently stands, is that the technology is still in its nascent stages and often flawed and fallible. This is typified by the tendency for AI to hallucinate or deliver inaccurate, incorrect, or misleading results. As a result, many CIOs and other tech executives have been disappointed with the high failure rates of AI.
However, the promise of gen AI has led AI providers and other companies to continue investing billions of dollars in the technology. The goal is to enhance and improve the size, performance, and reliability of AI models to address current weaknesses.
Breaking Down the Forecast
Some 80% of the increased spending on gen AI will focus on integrating AI into existing hardware, such as servers, PCs, and smartphones. But company spending on AI software and services will also surge. Breaking down its forecast for 2025, Gartner anticipates that businesses will spend $27.7 billion on services, $37.1 billion on software, $180.6 billion on servers, and $398.3 billion on devices, all dramatic increases from last year.
No Signs of Stopping
The still untapped promises of gen AI and its often seen pitfalls are typified by a feature like Apple Intelligence. Apple touted its iPhone 16 lineup based largely on the benefits of generative AI to transform the way you work, play, and communicate. In reality, the feature has failed to deliver on those promises, with some of its promoted skills either not working as expected or being delayed further and further.
But if Gartner is correct in its forecast, we’re on an AI ride that shows no signs of stopping. For now, vendors will continue to push gen AI into their products while customers wait for it to realize its potential. To further those goals, all sides will have to open their wallets in hopes that generative AI will become the game changer that it aspires to be.
Conclusion
The future of generative AI looks bright, with Gartner predicting a surge in spending this year. While there are still challenges to be addressed, the potential benefits of gen AI are clear, and companies are willing to invest to make it a reality. As the technology continues to evolve, we can expect to see even more innovative applications of gen AI in the years to come.
Frequently Asked Questions
Q: What is the forecast for global spending on generative AI in 2025?
A: According to Gartner, the amount of money spent around the world on generative AI will total $644 billion this year, an increase of 76.4% from last year.
Q: What percentage of increased spending on gen AI will focus on integrating AI into existing hardware?
A: Some 80% of the increased spending on gen AI will focus on integrating AI into existing hardware, such as servers, PCs, and smartphones.
Q: What are the expected increases in spending on gen AI software, services, servers, and devices?
A: Gartner anticipates that businesses will spend $27.7 billion on services, $37.1 billion on software, $180.6 billion on servers, and $398.3 billion on devices, all dramatic increases from last year.
