Generative AI Market

Market Overview

The global generative AI market size was valued at USD 10.3 billion in 2022 and is projected to reach USD 136 billion by 2031, registering a CAGR of 33.2% during the forecast period (2023-2031). Machine learning and deep learning are gaining popularity, and several governments are supporting end-users in developing emerging technologies such as generative AI for diverse industry applications, which impacts growth of industry.

Generative artificial intelligence (AI), also known as generative adversarial networks (GANs), is a subset of artificial intelligence (AI) approaches that include creating new and unique material from existing data. Unlike standard AI models trained on labeled data for classification or prediction tasks, generative AI is concerned with producing new data samples similar to the original training data. Generative AI has several applications in a variety of sectors. It may be utilized to create distinctive and innovative designs, paintings, and sculptures in art and design. It may be used in entertainment to create realistic computer-generated imagery (CGI) for movies, video games, and virtual reality experiences. It can help with drug discovery, genetics research, and medical imaging analysis in healthcare.

The generative AI market share will likely expand rapidly in the next few years. The rising need for generative AI solutions in several sectors and the development of new and creative generative AI technologies will drive market expansion. North America is the largest market, followed by Europe and Asia-Pacific. The rising deployment in the healthcare, media, and entertainment industries is driving market development in North America.

Key Highlights

• Software dominated the market based on components.
• The media and entertainment segment generated the most revenue based on end-user.
• The transformers segment is the highest contributor to the market based on technology.
• The Natural Language Processing (NLP) segment owns the largest market share based on application.
• Large Language Models are leading the market based on models.
• North America dominated the industry by region.

Market Dynamics

Market Drivers

Innovation of Cloud Storage

Cloud storage has changed data storage, retrieval, and management. It has shaped several industries and driven markets. Cloud servers allow users to store data remotely. Users may access data from anywhere with an internet connection without physical storage devices. Due to its ease and flexibility, individuals and businesses use cloud storage more. Cloud storage innovation includes Dropbox, Google Drive, and Microsoft OneDrive. These technologies simplify data storage, syncing, and sharing among devices. Users may access their files from any device, communicate in real-time, and recover data if a device fails. The generative AI market growth shows the industry's impact on cloud storage.

Government Initiatives

Machine learning and deep learning are becoming more popular, and many countries' governments help end users develop new technologies like generative AI that can be used in a wide range of industries. For example, in August 2022, the General Services Administration (GSA) in the U.S. used generative AI and machine learning to help improve, control, and advance procurement tasks. Generative AI and ML are making it possible to improve procurement processes, get a clear view of key measures, and get insights and forecasts about procurement trends. Also, the Chinese government is interested in generative AI because new funding was announced to back innovations from the COVID-19 spread. In January 2023, Chinese tech companies started working to create their own AI world, and the government helped them. Local Chinese governments are also spending on several projects through IDEA, a research lab owned and supported by the Chinese Communist Party. Chinese tech companies have also shown off a few AI bots that work in a way that fits the country's tastes and political atmosphere.

Market Restraints

Data Breaches

The Generative AI market report suggests that it relies largely on deep neural networks such as Generative Adversarial Networks; these networks are crucial. It frequently disregards fundamental machine learning models that are still incredibly useful for business applications like fraud detection, information security, and recommendation systems. This increased the likelihood of data breaches. For example, the CEO of the alcohol delivery service Drizly was accountable for security lapses that compromised the personal information of approximately 2.5 million customers. The Federal Trade Commission will take the unprecedented measure of pursuing individual sanctions against Drizly for data privacy violations.

Market Opportunities

Acceleration of Large Language models (LLMs) 

LLM deployment increases market potential. GPT-3, OpenAI's LLM, can comprehend and write like humans. LLMs may alter many businesses and applications. LLMs expand content production, language translation, sentiment analysis, and data analysis. LLMs save time and money by writing high-quality articles, blogs, and reports. Real-time language translation also helps people and companies communicate globally. LLMs may aid sentiment analysis, which analyzes massive text data to estimate public opinion and customer feedback. This data may enhance business choices and customer satisfaction. The growing generative AI market and the need for AI-powered chatbots and virtual assistants indicate LLMs' commercial potential. Hardware infrastructure improvements make LLM deployment scalable and feasible.

Regional Analysis

The global generative AI market is bifurcated based on region into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America dominated the industry with the largest share in 2023 and is projected to grow at a significant CAGR of 48.1% over the forecast period due to factors such as the rise of pseudo-imagination and medical care and banking frauds. North America has emerged as the leading region for the adoption and development of the market due to the presence of numerous market actors and government support. The United States, specifically the Silicon Valley region of California, has been at the forefront of research and development. Numerous prominent U.S. technology companies and research institutions, including OpenAI, Google, Facebook, NVIDIA, and IBM, have significantly contributed to advancing generative AI technologies. In addition, the National Science Foundation (NSF) of the United States announced the establishment of 11 new NSF National Artificial Intelligence Research Institutes and an additional USD 140 million investment for their establishment, expanding their reach to 40 states and the District of Columbia. Moreover, Goldman Sachs Research says advances in Generative artificial intelligence could greatly impact the world economy. As tools that use breakthroughs in natural language processing make their way into businesses and society, they could boost the global GDP by 7% (or almost USD 7 trillion) and increase economic growth by 1.5% over ten years.

Asia-Pacific is projected to have the highest CAGR over the forecast period. The growth of the Market in the Asia Pacific region is driven by the increasing number of government initiatives in AI and the rising adoption of AI applications. The regional market expansion can also be attributed to businesses' rapid digitization, which strains cloud networks and data centers. Additionally, AI adoption aids organizations in empowering civil society members to be responsible and knowledgeable AI device users.

Europe is a leader in research and development for artificial intelligence because of its creative businesses, industrialists, and digital start-ups based on scientific discoveries. With a strong industrial base, Europe makes many of the world's industrial and professional service robots and tools in health, transportation, security, farming, and energy. Artificial intelligence is often used in almost all-important businesses, such as manufacturing, healthcare, transportation, e-government, and space technologies. Europe's Generative AI market trend is continuously evolving and is expected to grow quickly in the coming years.

Segmental Analysis

The global generative AI market is segmented based on component, end-use, technology, application, model, and region.

Based on the component, the Market is divided into Software and Services.

The software category will likely generate the most revenue over the projection period.Fraud, overestimation, unanticipated consequences, and data privacy concerns drive software segment growth. As solid ML models make generative AI software more powerful, fashion, entertainment, and transportation are predicted to benefit. H&M and Adidas utilize it to develop clothes and footwear. This technique also creates unique fabric and print patterns, saving designers time.

Based on end-user, the Market is divided into Media and Entertainment, BFSI, IT, and Telecommunication, Healthcare, Automotive, Gaming, and Others. 

The media and entertainment segment generated the most revenue and is anticipated to grow significantly during the forecast period. This technology is likely in high demand in the media and entertainment sector due to the growing use of generative AI to create more effective advertising campaigns. In January 2023, for instance, BuzzFeed, Inc., an American internet media, news, and entertainment company, announced a plan to use AI tools provided by Open AI, an American AI company, to enhance and personalize specific content offerings.

Based on technology, the Market is divided into Generative Adversarial Networks, Transformers, Variational Auto-Encoders, and Diffusion Networks.

The transformers segment is the highest contributor to the Market and is estimated to grow significantly during the forecast period. Transformers are influential in the field of generative artificial intelligence. Transformers, which were initially developed for natural language processing tasks, have acquired popularity due to their capacity to capture long-range dependencies and generate coherence. During the generation process, they employ a self-attention mechanism that enables them to fixate on various parts of the input sequence.

Based on application, the Market is divided into Computer Vision, NLP, Robotics 7 Automation, Content Generation, Chatbots and Intelligent Virtual Assistants, Predictive Analytics, and Others.

The Natural Language Processing (NLP) segment owns the largest market share and is anticipated to grow significantly during the forecast period. NLP tasks include translation, text generation, summarization, dialogue systems, and sentiment analysis. Generative models permit the generation of text that is coherent and contextually pertinent.

Based on the model, the Market is divided into Large Language Models, Image and Video Generative Models, Multi-Model Generative Models, and Others. 

Large Language Models are leading the market and are estimated to grow significantly during the forecast period. The segment's development can be ascribed to various applications, such as chatbots that can converse with users and content-generation tools that compose product descriptions and articles. Large language models may aid in reducing the time and expense required to develop NLP applications. In NLP, large language models such as ChatGPT have gained popularity. These models can comprehend and generate language similar to that of humans, making them useful for various applications.

Recent Developments

• July 2023- GA Cloud CDN supported private origin authentication. Allowing only trusted connections to access your private material and prohibiting people from directly accessing it increases security.
• July 2023- IBM and Truist worked on quantum computing and emerging technology.