Generative AI Market Size, Share, Forecast, & Trends Analysis by Offering (Software, Services), Model (Generative Adversarial Networks, Transformer), Data Modality (Text, Video, Image), End User (IT & Telecommunications, BFSI, Media & Entertainment) and Geography - Global Forecast to 2031

The Generative AI Market was valued at $14.1 billion in 2023. This market is expected to reach $133.9 billion by 2031 from an estimated $18.5 billion in 2024, at a CAGR of 32.6% during the forecast period from 2024 to 2031.

Generative AI Market Size & Forecast

The growth of the generative AI market is primarily driven by the increased emphasis on enhancing customer satisfaction, the surge in adoption of generative AI in the IT & telecom sector, the evolution of AI and deep learning technology, and increased usage of content creation and creative applications. Moreover, the expanding integration of generative AI within the media and entertainment sector, the growing demand for automating business processes, the rising adoption of large language models, and the increased use of generative AI to enhance productivity are expected to generate growth opportunities for the players operating in this market.

Generative AI Market Growth Drivers

Increasing Need to Enhance Customer Satisfaction

The growing imperative to elevate customer satisfaction is driving the widespread adoption of generative AI across diverse industries, including telecommunications. As customer expectations shift, businesses are leveraging advanced technologies to deliver more personalized, efficient, and responsive service. Generative AI is becoming a pivotal asset in this shift, providing numerous benefits that directly meet the increasing demand for enhanced customer experiences.

Generative AI facilitates highly personalized customer interactions by analyzing extensive data, including historical behavior, preferences, and previous interactions. AI systems can create customized recommendations, offers, and content, thereby enhancing the relevance and appeal of the services offered to individual customers. This level of personalization strengthens the relationship between businesses and their customers, boosting satisfaction and loyalty. Additionally, AI-powered chatbots and virtual assistants are transforming customer support by efficiently managing both routine queries and complex issues. These AI tools use natural language processing to understand and respond to customer inquiries in real time. Their continuous learning from interactions enhances their accuracy and effectiveness, leading to quicker resolutions and reduced wait times. Consequently, the increased focus on customer satisfaction is driving the adoption of generative AI, which provides robust tools for delivering personalized, efficient, and proactive customer service.

Surge In Adoption of Generative AI in IT & Telecom Sector

IT and telecom companies are progressively integrating AI technologies to enhance network performance, elevate customer service, and innovate new products and services. Many IT and telecom providers are investing in generative AI to refine customer experiences, automate the handling of customer inquiries, and shorten response times. The deployment of AI enables these companies to anticipate customer behavior, offering proactive support and personalized interactions. Furthermore, AI-driven solutions allow telecom companies to optimize their networks in real time, adapting to evolving conditions and demand.

Generative AI is vital for IT and telecom businesses, as it facilitates advanced customer analytics, offering valuable insights into customer behavior and preferences. By deploying AI-powered analytics solutions, telecom operators can provide personalized content, offers, and services, thereby boosting customer engagement and loyalty. With the rise of customer service automation and the growing use of virtual assistants, IT, and telecom companies are increasingly adopting AI-powered chatbots and virtual assistants to ensure the efficient, reliable, and convenient delivery of high-quality services. These advantages are driving the widespread adoption of generative AI solutions within the IT and telecom sectors.

Some of the recent developments in this space are as follows:

• In January 2024, the GSM Association (U.K.) partnered with IBM Corporation (U.S.) to advance the adoption and expertise in generative artificial intelligence (AI) within the telecom industry by launching the GSMA Advance AI Training program and the GSMA Foundry Generative AI program.
• In December 2023, Netcracker Technology (U.S.) integrated its GenAI Telco Solution with Amazon Bedrock to enhance the application of generative AI within the telecom sector.

Generative AI Market Growth Trend

Growing Adoption of AI Chatbots for Customer Interaction

The growing adoption of chatbots for customer interaction is a key trend in the generative AI market. These chatbots are designed to recognize and respond to human emotions, enhancing their effectiveness in engaging with customers. AI-driven chatbots are revolutionizing customer interactions with technology, enabling enterprises to improve customer retention and engagement. By collecting data from customer interactions, AI chatbots allow companies to tailor their responses and services. This data can be provided to agents in real time during customer calls, equipping them with relevant insights to offer solutions that address both the customer’s current needs and their historical interactions with the company.

Furthermore, AI-powered chatbots utilize AI and machine learning algorithms to analyze extensive databases of human interactions and emotional data. By training on these datasets, chatbot models can learn to identify and respond to various emotional states, thereby improving their ability to deliver a personalized customer experience. As the adoption of chatbots grows among enterprises, market players are increasingly focusing on product launches and strategic partnerships to enhance chatbot solutions. For example, in June 2024, Enento Group (Finland) collaborated with Ebbot (U.S.) to advance customer experience through a generative AI-powered chatbot. Such developments are expected to support market growth during the forecast period.

Generative AI Market Analysis: Key Findings

The Software Segment to Dominate the Generative AI Market in 2024

Based on offering, the generative AI market is segmented into software and services. In 2024, the software segment is expected to account for a larger share of 65.0% of the generative AI market. This segment’s substantial market share is attributed to the increasing demand for generative AI software capable of producing large volumes of content and data, the presence of numerous generative AI software providers investing in research and development, and the rising need for personalized content and interactions. Additionally, the advantages offered by this software segment—including enhanced creativity and innovation, improved efficiency and automation, greater personalization and customer engagement, and advanced problem-solving capabilities—further contribute to its growth.

However, the services segment is projected to record the highest CAGR during the forecast period. The increasing demand for consulting and advisory services, the rising need for implementation services to ensure network performance, and the growing demand for AI services for task automation and enhanced business efficiency are expected to support the growth of this segment.

The Transformer Segment to Dominate the Generative AI Market in 2024

Based on model, the generative AI market is segmented into variational auto-encoders, generative adversarial networks, transformers, diffusion networks, flow models, autoregressive models, and other models. In 2024, the transformer segment is expected to account for the largest share of over 47.0% of the generative AI market. This segment’s substantial share is attributed to the increasing demand for personalized content generation, the expanding adoption of transformer models in the BFSI, healthcare, media, and entertainment sectors, and the rising need for transformer models in applications such as content creation, conversational agents, and automated writing.

However, the generative adversarial networks segment is projected to record the highest CAGR during the forecast period. The increasing application of GANs (Generative Adversarial Networks) in medical imaging and their use in marketing and advertising are anticipated to drive the growth of this segment.

The Text Segment to Dominate the Generative AI Market in 2024

Based on data modality, the generative AI market is segmented into text, image, video, audio and speech, and code. In 2024, the text segment is expected to account for the largest share of over 32.0% of the generative AI market. This segment's substantial share is attributed to advancements in deep learning technology, the rising use of content creation and creative applications, the growing adoption of AI chatbots for customer interactions, and the increasing application of text generation technology in specialized fields such as medical documentation and financial reporting. Moreover, this segment is expected to register a higher CAGR during the forecast period.

The IT & Telecommunication Segment to Dominate the Generative AI Market in 2024

Based on end user, the generative AI market is segmented into BFSI, IT & telecommunications, healthcare, media & entertainment, retail & e-commerce, transportation & logistics, energy & utilities, government & defense, manufacturing, construction, and other end users. In 2024, the IT & telecommunications segment is expected to account for the largest share of over 23.0% of the generative AI market. This segment's significant share is attributed to the increasing demand for personalized customer experiences, the growing need for generative AI in network optimization and management, rapid advancements in machine learning, and the expanding use of generative AI to analyze data from network sensors to improve operational efficiency. Moreover, this segment is expected to register a higher CAGR during the forecast period.

Geographic Analysis

North America to Dominate the Generative AI Market

Based on geography, the generative AI market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, North America is expected to account for the largest share of over 41.0% of the generative AI market. The presence of leading generative AI companies is anticipated to support the large market share of this region. Furthermore, the rising demand for generative AI solutions within the IT and telecommunications sectors, the growing adoption of AI chatbots for customer interactions, and the increasing need for business process automation are all contributing to the demand for generative AI in the region.

However, Asia-Pacific is expected to witness the highest CAGR of 34.2% during the forecast period. The rapid expansion of emerging economies, particularly in China, South Korea, Japan, and India, coupled with infrastructural development in the APAC region, high internet penetration, and the widespread use of mobile devices, are driving growth in this market. Additionally, strong government support and policies, the expansion of telecom networks, and increased investment by market players in developing generative AI solutions are further fueling the growth of this regional market.

Generative AI Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last three to four years. Some of the key players operating in the generative AI market are NVIDIA Corporation (U.S.), IBM Corporation (U.S.), Amazon Web Services, Inc. (U.S.), Capgemini SE (France), Google LLC. (U.S), Kyndryl Holdings, Inc. (U.S.), Intel Corporation (U.S.), Synthesia (U.K.), Writesonic (U.S.), Salesforce, Inc. (U.S.), D-ID (Israel), and Adobe Inc. (U.S.).

Generative AI Industry Overview: Latest Developments from Key Industry Players

• In May 2024, Kyndryl (U.S.) partnered with NVIDIA Corporation (U.S.) to accelerate the adoption of generative AI-enabled solutions.

In March 2024, NVIDIA Corporation (U.S.) introduced its generative AI microservices to enhance drug discovery, MedTech, and digital health. This new suite of NVIDIA healthcare microservices features optimized NVIDIA NIM™ AI models and workflows, along with industry-standard APIs (application programming interfaces) designed as foundational components for developing and deploying cloud-native applications. The microservices provide advanced capabilities in imaging, natural language and speech recognition, and digital biology generation, prediction, and simulation.

Regenerative Medicine Market Research Summary

Key questions answered in the generative ai market report: