New Delhi– Global end-user spending on generative AI (GenAI) models is expected to reach $14.2 billion in 2025, according to a new report released Thursday by Gartner.
Spending on specialized GenAI models — including domain-specific language models (DSLMs) — is projected to reach $1.1 billion in 2024. These models are trained or fine-tuned using data specific to industries or business processes.
Gartner forecasts a sharp shift toward specialized models over the next few years. By 2027, more than half of all GenAI models used by enterprises are expected to be domain-specific, up from just 1 percent in 2024.
“Foundation GenAI models, including large language models (LLMs), are trained on vast datasets and designed to perform a wide range of tasks. These remain the primary area of organizational investment and will continue to dominate GenAI spending for the foreseeable future,” said Arunasree Cheparthi, Senior Principal Research Analyst at Gartner.
However, she noted that many organizations are increasingly turning to vertical or domain-specific GenAI models because they offer better performance, reliability, cost efficiency, and contextual relevance for targeted enterprise applications compared to generalized foundation models.
A previous Gartner report projected that overall global spending on generative AI will reach $644 billion in 2025 — a 76.4 percent increase from 2024. This surge will be largely driven by the integration of AI capabilities into hardware such as servers, smartphones, and personal computers. In fact, 80 percent of GenAI-related spending in 2025 is expected to go toward hardware.
The report highlights that GenAI will see rapid adoption and growth across all major IT markets and submarkets in 2025. Gartner anticipates that GenAI will have a transformative impact on business operations, IT strategies, and consumer products alike.
Foundational model providers are investing billions annually to improve the size, performance, and reliability of GenAI models — a trend Gartner expects to continue through 2025 and 2026. (Source: IANS)
