According to a new research report from the IoT analyst firm, Berg Insight, the Generative AI (GenAI) market grew substantially in 2024, experiencing triple-digit growth rates in all three major segments: GenAI hardware, foundation models, and development platforms.
The market value for foundation models reached an estimated $4,1 billion, excluding end user applications such as ChatGPT. The figure primarily includes income through API services or licence fees as the models are used on development platforms. Meanwhile, the market value for GenAI development platforms reached an estimated $17,0 billion. Furthermore, GPU-based hardware systems used for GenAI workloads generated revenues of $132,3 billion in 2024.
“The GenAI hype is not without merit, since its ability to creatively generate convincingly human-like content makes it a disruptive technology with the potential to influence nearly every industry”, said Melvin Sörum, IoT analyst at Berg Insight. “Even though traditional AI systems have been used commercially for many years, GenAI is a more novel practice that enables computer systems to produce original content – including text, images, video, audio and software code – rather than merely analysing existing data or making predictions.”
Before 2023, the use of GenAI technology was practically non-existent. The nascent market was ignited by the launch of OpenAI’s ChatGPT, which was the first widely adopted commercial product to bring GenAI to mainstream attention. Significant investments can now be observed from a diverse range of enterprises, spanning both start-ups and established technology giants, all trying to capitalise on the substantial market potential. However, due to the vast computational resources required to train and run AI models, the market is primarily dominated by large technology conglomerates and companies that have managed to raise significant funding.
Berg Insight has identified 31 key foundation model providers, spanning LLMs, vision, audio, and multimodal models. While many LLMs started as unimodal, nearly all successful LLMs now include multimodal capabilities. Companies with cross-modal offerings include US-based Anthropic, Google, Meta, OpenAI, and xAI; China-based Alibaba, Baidu, ByteDance, and Tencent; France-based Mistral AI; and Canada-based Cohere. Specialised vision model developers include US-based Midjourney and Runway, as well as UK-based Stability AI. Key audio specialists include Assembly AI, based in the US, and ElevenLabs.
The ecosystem is supported by over 24 key companies offering tools for building GenAI applications. In the US, providers include cloud giants such as Microsoft, Google, and AWS, as well as diversified tech companies like IBM and Oracle. The landscape also features hardware providers like Nvidia, data platform specialists such as Databricks and Snowflake, model training platforms like Scale AI, and the open-source library from Hugging Face. European and Asian players also contribute, including Dutch Nebius and Chinese companies such as Alibaba, Baidu, ByteDance, and Tencent.
Download report brochure: The Generative AI Market
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