AI Investment to Hit $1.5 Trillion by 2025, Report Finds
▼ Summary
– Worldwide AI spending is projected to reach nearly $1.5 trillion by 2025 and exceed $2 trillion by 2026.
– This growth is driven by continued investment in AI infrastructure, including data centers with AI-optimized hardware and GPUs from hyperscalers.
– The AI investment landscape is expanding beyond U.S. tech giants to include Chinese companies, new AI cloud providers, and venture capital funding.
– Significant spending increases are forecasted for AI application software, which is projected to surge from $83.7 billion in 2024 to $269.7 billion in 2026.
– Growth is also fueled by the integration of AI into consumer products like smartphones and PCs, alongside major increases in AI-optimized servers and semiconductors.
Global investment in artificial intelligence is on a remarkable upward trajectory, with projections indicating it will approach $1.5 trillion by 2025. This explosive growth is primarily fueled by massive, ongoing investments in AI infrastructure. Major technology firms, often called hyperscalers, are pouring resources into expanding data centers equipped with specialized, AI-optimized hardware and powerful GPUs to meet soaring demand for their services.
The investment landscape is broadening significantly beyond its traditional base. While U.S. tech giants continue to lead, Chinese companies and emerging AI cloud providers are becoming major players. An additional catalyst comes from venture capital, which is flowing into AI startups and creating strong tailwinds for overall spending. Looking further ahead, the momentum shows no signs of slowing; by 2026, worldwide AI expenditure is anticipated to surpass the $2 trillion mark. A key driver for this sustained growth is the deep integration of AI capabilities into everyday consumer products like smartphones and personal computers.
A closer look at specific market segments reveals a dramatic surge, particularly in AI application software. Spending in this category is expected to more than double from 2024 to 2025, jumping from $83.7 billion to $172.0 billion. By 2026, it is forecast to reach $269.7 billion. AI services will also see steady growth, climbing from $259.5 billion in 2024 to an estimated $324.7 billion in 2026. The underlying infrastructure software is projected to experience even more rapid expansion, rising from $56.9 billion to $229.8 billion over the same three-year period. Meanwhile, investment in generative AI models, while starting from a smaller base, is set for a sharp increase from $5.7 billion in 2024 to $25.8 billion by 2026.
The hardware required to power these advanced systems represents a colossal market. Spending on AI-optimized servers, which incorporate GPU and other types of AI accelerators, is predicted to grow from $140.1 billion in 2024 to $329.5 billion in 2026. AI-optimized Infrastructure as a Service (IaaS) is another high-growth area, projected to expand from $7.4 billion to $37.5 billion over the forecast period.
This hardware boom is intrinsically linked to the semiconductor industry. The market for AI processing semiconductors is forecast to increase from $138.8 billion in 2024 to $267.9 billion in 2026. Consumer devices are also a major factor. The market for AI-enabled PCs is expected to rise from $51.0 billion to $144.4 billion, while the segment for generative AI smartphones is projected to grow from $244.7 billion to $393.3 billion by 2026. In totality, these figures paint a clear picture of an industry accelerating at an unprecedented pace, with overall AI spending forecast to rise from $987.9 billion in 2024 to well over $2 trillion just two years later.
(Source: Economy Middle East)
