Gartner Forecasts Worldwide GenAI Spending to Reach $644 Billion in 2025
March 31, 2025 | Gartner, Inc.Estimated reading time: 1 minute
Worldwide generative AI (GenAI) spending is expected to total $644 billion in 2025, an increase of 76.4% from 2024, according to a forecast by Gartner, Inc.
“Expectations for GenAI's capabilities are declining due to high failure rates in initial proof-of-concept (POC) work and dissatisfaction with current GenAI results,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Despite this, foundational model providers are investing billions annually to enhance GenAI models' size, performance, and reliability. This paradox will persist through 2025 and 2026.
“Ambitious internal projects from 2024 will face scrutiny in 2025, as CIOs opt for commercial off-the-shelf solutions for more predictable implementation and business value. Despite model improvements, CIOs will reduce POC and self-development efforts, focusing instead on GenAI features from existing software providers.” said Lovelock.
GenAI spending is poised for significant growth across all core markets and submarkets in 2025. GenAI will have a transformative impact across all aspects of IT spending markets, suggesting a future where AI technologies become increasingly integral to business operations and consumer products.
AI Capable Consumer Devices to Drive GenAI Spending
GenAI spending in 2025 will be driven largely by the integration of AI capabilities into hardware, such as servers, smartphones and PCs, with 80% of GenAI spending going towards hardware.
“The market’s growth trajectory is heavily influenced by the increasing prevalence of AI-enabled devices, which are expected to comprise almost the entire consumer device market by 2028,” said Lovelock. “However, consumers are not chasing these features. As the manufacturers embed AI as a standard feature in consumer devices, consumers will be forced to purchase them.”
Gartner’s GenAI spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of GenAI products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
Suggested Items
Lockheed Martin Reports Q1 2025 Financial Results
04/22/2025 | Lockheed MartinLockheed Martin Corporation reported first quarter 2025 sales of $18.0 billion, compared to $17.2 billion in the first quarter of 2024. Net earnings in the first quarter of 2025 were $1.7 billion, or $7.28 per share, compared to $1.5 billion, or $6.39 per share, in the first quarter of 2024.
IPC Rising Star Award: Feng Xue, IBM
04/22/2025 | Nolan Johnson, I-Connect007Feng Xue is a senior technical staff member in supply chain engineering at IBM. He has 21 years of experience in semiconductor technology and supply chain operations and leads initiatives on internal quality management systems, supplier quality programs, business analytics, app modernization and cloud-native apps for quality processes, IoT solution deployment, and Industrial 4.0 transformation, engineering skill development, and technical leadership development.
Amphenol Releases 2024 Sustainability Report
04/22/2025 | Amphenol CorporationAmphenol Corporation released its 2024 Sustainability Report.
Incap Empowers the Next Generation of Skilled Professionals at Taitaja 2025
04/21/2025 | IncapIncap Corporation is proud to support the Taitaja 2025 Championship of vocational skills, Finland’s largest annual event dedicated to vocational education and training.
Cicor Acquires Significant Business Activities of Éolane
04/21/2025 | CicorCicor Group announces that its offer for the acquisition of significant business activities of the French Éolane Group has been accepted by the Paris Commercial Court. This strategic transaction marks a milestone in the execution of Cicor's pan-European growth strategy and further strengthens its market leadership in the aerospace and defence sector.