Generative AI Software Global Market Opportunities and Strategies to 2033

This report describes and explains the generative AI software market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global generative AI software market reached a value of nearly $10.45 billion in 2023, having grown at a compound annual growth rate (CAGR) of 35.4% since 2018. The market is expected to grow from $10.45 billion in 2023 to $58.23 billion in 2028 at a rate of 41%. The market is then expected to grow at a CAGR of 18.6% from 2028 and reach $136.81 billion in 2033.

Growth in the historic period resulted from the increased cloud computing adoption, strong economic growth in emerging markets, increased internet penetration, increased demand for personalized content creation and expansion of digital content creation. Factors that negatively affected growth in the historic period were issues related to bias and inaccurately generated output.

Going forward, increasing usage of artificial intelligence, rising adoption of AI in content creation, expansion of the gaming industry, adoption of AI for automated software development and growth in AI-driven cybersecurity solutions will drive the growth. Factor that could hinder the growth of the generative AI software market in the future include limited availability of skilled personnel and technical expertise and growing concerns about data security.

The generative AI software market is segmented by component into software and services. The software market was the largest segment of the generative AI software market segmented by component, accounting for 82.1% or $8.58 billion of the total in 2023. Going forward, the services segment is expected to be the fastest growing segment in the generative AI software market segmented by component, at a CAGR of 46.6% during 2023-2028.

The generative AI software market is segmented by model into large language models, image and video generative models, multi-modal generative models and other models. The large language models market was the largest segment of the generative AI software market segmented by model, accounting for 46.7% or $4.88 billion of the total in 2023. Going forward, the image and video generative models segment is expected to be the fastest growing segment in the generative AI software market segmented by model, at a CAGR of 44.4% during 2023-2028.

The generative AI software market is segmented by application into computer vision, natural language processing, robotics and automation, content generation, predictive analytics and other applications. The natural language processing market was the largest segment of the generative AI software market segmented by application, accounting for 42.7% or $4.45 billion of the total in 2023. Going forward, the content generation segment is expected to be the fastest growing segment in the generative AI software market segmented by application, at a CAGR of 46.3% during 2023-2028.

The generative AI software market is segmented by end-user into media and entertainment, banking, financial services and insurance (BFSI), IT and telecom, healthcare, automotive and transportation and other end-users. The media and entertainment market was the largest segment of the generative AI software market segmented by end-user, accounting for 30% or $3.13 billion of the total in 2023. Going forward, the healthcare segment is expected to be the fastest growing segment in the generative AI software market segmented by end-user, at a CAGR of 48.5% during 2023-2028.

North America was the largest region in the generative AI software market, accounting for 43.2% or $4.51 billion of the total in 2023. It was followed by Asia Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the generative AI software market will be Asia Pacific and North America where growth will be at CAGRs of 43.3% and 41.9% respectively. These will be followed by Western Europe and South America where the markets are expected to grow at CAGRs of 37.5% and 36.7% respectively.

The global generative AI software market is highly concentrated, with large players operating in the market. The top ten competitors in the market made up to 63.71% of the total market in 2023. The market concentration can be attributed to the presence of large number of players in different geographies. Prominent players are launching the new products and attracting investments to consolidate their market positions across the globe, while others are distributing products. OpenAI was the largest competitor with a 16.27% share of the market, followed by Microsoft Corporation with 15.98%, Alphabet Inc (Google LLC) with 15.83%, Amazon Web Services Inc with 13.03%, Anthropic PBC with 0.53%, Cohere Inc with 0.51%, Meta Platforms Inc with 0.45%, NVIDIA Corporation with 0.39%, Glean with 0.37% and LeewayHertz with 0.35%.

The top opportunities in the generative AI software market segmented by component will arise in the software segment, which will gain $37.0 billion of global annual sales by 2028. The top opportunities in the generative AI software market segmented by model will arise in the large language models segment, which will gain $19.51 billion of global annual sales by 2028. The top opportunities in the generative AI software market segmented by application will arise in the natural language processing (NLP) segment, which will gain $19.5 billion of global annual sales by 2028. The top opportunities in the generative AI software market segmented by end-user will arise in the media and entertainment segment, which will gain $14.83 billion of global annual sales by 2028. The generative AI software market size will gain the most in the USA at $17.58 billion.

Market-trend-based strategies for generative AI software market include focus on deployment of large language models (LLMs) to automate processes, focus on advancements in text-to-image tools to transform generative AI landscape, focus on evolution of business chatbots to drive competitive advantage, focus on focus on launch of new metaverse technologies with generative AI tools, focus on technological advancements in generative AI models to improve user experiences, focus on strategic partnerships and collaborations among market players to drive innovation and focus on innovative product launches with focus on AI-powered sales and marketing solutions.

Player-adopted strategies in the generative AI software market include focus on strengthening business capabilities through new product developments and focus on strengthening operational capabilities through attracting investments.

To take advantage of the opportunities, the analyst recommends generative AI software companies to focus on expanding generative AI deployment, focus on advanced technology and safety features, focus on innovative generative AI solutions, focus on developing innovative metaverse technologies, focus on new product development and integration, focus on the services segment to capitalize on growth opportunities, expand in emerging markets, continue to focus on developed markets, focus on strategic partnerships and collaborations, focus on strategic pricing for generative AI companies, focus on content marketing, continue to use B2B promotions and focus on tailored AI solutions for healthcare sector.