The advent of generative AI (GenAI) is heralding the next industrial revolution, disrupting various virtually every technology sector; semiconductors, servers, PCs, tablets, mobile phones, services, applications, and infrastructure software – and it is already revolutionising how businesses operate. This includes its influence on content discovery, creation, authenticity, and regulations, as well as its role in automating and augmenting human work.
Gartner foresees these shifts across industries as being significant. The revenue from workload accelerators deployed in servers is projected to experience substantial growth, increasing from $6 billion in 2022 to $24 billion in 2027. Additionally, Gartner predicts there will be widespread adoption of generative AI in services, with an expectation that by 2027, 90% of service providers will leverage it for software development services, involving tasks such as code compiling, optimisation, automated debugging, and quality assurance testing.
1. The evolution of GenAI in 2023
In 2023, GenAI witnessed exponential growth in software and services spending, largely fuelled by the hype surrounding AI assistant chatbot tools. This surge impacted marketing, product design, conversational platforms, and personalisation. However, the initial spike is expected to slow in 2024, gaining momentum again from 2025 through 2027. Despite heightened interest and exploration, revenue generation will require time.
Last year also marked a pause and pivot for business and technology executives, responding to economic uncertainties. Gartner’s 2023 CEO Survey highlighted a shift towards careful consideration of AI usage, especially GenAI, rather than immediate adoption. Spending on AI services will primarily be a substitution, taking money, time and executive attention from other planned or ongoing projects that are delayed or cancel. Throughout 2024 and into the beginning of 2025, strategic proof of concept and design pilots, specifically centred around GenAI, will drive market growth.
2. GenAI and its Impact across technology sectors
The acceleration of AI servers gained momentum in 2023, particularly fuelled by the hype around GenAI. These servers, critical in various applications from computer vision to natural language processing, and critical to the creation of large language models, are expected to exhibit double-digit growth through 2027.
The impact of GenAI extends across various technology sectors, influencing each with distinct effects. In the realm of semiconductors, GenAI is driving a short-term surge in data centre AI semiconductor revenue where specialized AI chip can cost upward of $25,000 US Dollars. The AI semiconductor market is projected to reach of $137 billion by 2027.
In the domain of infrastructure software, GenAI is poised to be a transformative force, ushering in changes in efficiency, performance, and resilience. For technology and service providers to thrive in this dynamic landscape, look to take an approach that emphasises specialisation, innovation, and responsiveness to market demands becomes imperative.
Turning attention to application software, GenAI will augment capabilities and elevate productivity, efficiency, and overall business value. To stay relevant in this ever-evolving market, remain attuned to these trends, adapting strategies accordingly.
Gartner analysts, including John-David Lovelock, will explore the topic and dive into the technology, insights and trends shaping the future of IT and business, at the Gartner IT Symposium/Xpo, taking place from 4-7 November in Barcelona, Spain.
John-David Lovelock
John-David Lovelock is Research Vice President and Distinguished Analyst at Gartner. John has 35 years of experience within the IT industry, including working eight years in a variety of healthcare environments. John currently serves as Gartner’s Chief Forecaster, a role he has held for the past 9 years.
