Global GenAI Spending to Hit $644 Billion by 2025, Gartner Projects
These figures indicate that global GenAI spending continues to grow at a rapid pace, with hardware fueling its momentum.
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The global appetite for GenAI is expected to hit $644 billion in 2025, a 76.4% increase from 2024, according to Gartner’s “Forecast Alert: GenAI IT Spending, 2023-2028, Worldwide” report. These optimistic projections are driven by the next generation of CIOs who aim to scrutinize in-house GenAI solutions.
Despite early setbacks in proof-of-concept (POC) projects and dissatisfaction with initial results, the GenAI sector is set for significant growth. John-David Lovelock, Gartner’s Distinguished VP Analyst, noted that foundational model providers continue investing billions annually to enhance GenAI models. This paradox, where expectations decline amid investment growth, is expected to continue through 2025 and 2026.
In 2025, many ambitious internal GenAI projects from 2024 will be re-evaluated. CIOs will turn to commercial off-the-shelf solutions for more predictable implementation, shifting focus away from self-development in favor of GenAI features offered by established software providers.
The GenAI market is poised for strong growth across various sectors. Gartner predicts that AI’s increasing role in IT and consumer products will transform the global business landscape.
Hardware Driving Growth
A significant portion of GenAI spending will be driven by hardware, with 80% of the 2025 spending directed toward devices like smartphones, PCs, and servers. Lovelock emphasized that while consumers may not actively seek AI capabilities, manufacturers are embedding them as standard features, leading to a rise in demand for AI-powered devices.
Spending Breakdown
The GenAI market will continue to grow across all core areas in 2025. Overall spending will rise from $364.9 billion in 2024 to $643.9 billion in 2025. Spending will increase significantly across:
- Services: $27.8 billion (up 162.6% from 2024)
- Software: $37.2 billion (up 93.9%)
- Devices: $398.3 billion (up 99.5%)
- Servers: $180.6 billion (up 33.1%)
These figures indicate that the GenAI market will continue to grow at a rapid pace, with hardware fueling its momentum.
