The generative AI industry is set to grow from $40 billion in 2022 to a $1.3 trillion market in 2032.
The industry will grow at a compounded rate of 42% per year, according to Bloomberg Intelligence.
The launch of OpenAI's chatbot ChatGPT in November fueled the hype around AI tools.
The release of AI tools like ChatGPT and Google Bard has created an explosion of interest in the generative AI industry, which could see revenues grow to over $1.3 trillion in the next decade, according to a report by Bloomberg Intelligence viewed by Insider.
Bloomberg's report suggests that in 2022 the industry generated revenues of around $40 billion. By 2032, the report says, that figure could be $1.32 trillion, an compounded annual growth rate for the sector of 42%.
Broken down by business areas, Bloomberg's report suggests that AI software like AI assistants, infrastructure products, and programs that speed up coding could generate $280 billion by 2032, an annual growth rate of 69%.
Hardware, however, will make up the bulk of the $1.3 trillion of revenue, accounting for $641 billion by 2032, per Bloomberg's estimates. Of that $641 billion, $168 billion come from devices, and $473 will come from infrastructure.
Hardware revenue will come from AI servers, AI storage, computer vision AI products, as well as conversational AI tools, which will be worth $108 billion.
Digital ads pertaining to AI will make revenues of $192 billion, while AI assistant software will be worth $89 billion, per the report.
Generative AI is forecasted to make up about 10 to 12% of total IT hardware, software services, ad spending, and gaming markets by 2032, compared to less than 1% currently, Bloomberg Intelligence's report suggests.
"The world is poised to see an explosion of growth in the generative AI sector over the next ten years that promises to fundamentally change the way the technology sector operates," Mandeep Singh, senior technology analyst at Bloomberg Intelligence and lead author of the report said in the press release.
"The technology is set to become an increasingly essential part of IT spending, ad spending, and cybersecurity as it develops," Singh added.
OpenAI's AI chatbot ChatGPT was launched to the public in November and exploded in popularity because of its ability to hold intelligent conversations, compose music, code, and even write essays. It became the fastest-growing consumer app in internet history reaching 100 million users in just over two months.
The rise of AI has led to growing concerns, including from many of those crucial to its development, that the technology could cause a threat to humanity. In an open letter this week, the CEOs of major AI firms like Deepmind and OpenAI said AI poses a "risk of extinction" to humanity if not properly regulated.
Read the original article on Business Insider