Global investment in generative AI (GenAI) software and solutions is expected to reach $143 billion by 2027, with a noteworthy compound annual growth rate (CAGR) of 73.3%. This growth rate outpaces overall AI spending growth and is over 13 times faster than the CAGR for worldwide IT spending during the same time period. According to International Data Corporation (IDC), corporations worldwide will invest around $16 billion in GenAI technologies by 2023. This investment includes GenAI software as well as the associated infrastructure hardware and IT/business services.

GenAI is recognized as a transformational technology with significant ramifications and corporate impact instead of a passing fad or hype. GenAI has the ability to revolutionize industries through responsible and ethical deployment, affecting how we interact with the world and conduct our work and leisure activities. IDC predicts that GenAI investments will evolve gradually over the next few years, from initial experimentation to aggressive use, targeting certain use cases and finally becoming widely integrated into various businesses.

The pace of GenAI spending may face constraints until 2025 due to shifts in workloads and resource allocation challenges, affecting not only silicon but also networking, facilities, model confidence, and AI skills. By the end of the projection period, GenAI spending is expected to comprise 28.1% of the total AI spending, marking a significant increase from the 9% projected for 2023. The highlights that GenAI infrastructure, which includes hardware, Infrastructure as a Service (IaaS), and system infrastructure software (SIS), will be the most significant area of investment during the implementation phase.