U.S. Generative AI Market (By Component: Software, Services; By Technology; By End-use; By Application; By Model) - Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The U.S. generative AI market size was estimated at USD 4.08 billion in 2023 and it is expected to surpass around USD 90.55 billion by 2033, poised to grow at a CAGR of 36.34% from 2024 to 2033. The U.S. generative AI market is driven by the escalating demand for automation across industries, increased investment, technological advancements, and businesses are leveraging generative ai to deliver personalized experiences to customers.

Key Pointers

• By Component, the software segment held the largest revenue share of 65% in 2023.
• By Component, the service segment is expected to expand at the highest CAGR from 2024 to 2033.
• By Technology, the transformers segment generated the maximum market share in 2023.
• By Technology, the diffusion networks segment is projected to experience the fastest growth between 2024 to 2033.
• By Application, The Natural Language Processing (NLP) segment captured the maximum market share in 2023.
• By Model, the large language model segment generated the maximum market share in 2023.
• By Model, the multimodal generative model is poised to witness the fastest growth during the forecast period.

U.S. Generative AI Market Overview

The U.S. generative AI market is witnessing rapid growth and innovation, driven by advancements in artificial intelligence technology and increasing demand across various industries. Generative AI, a subset of AI, involves systems that can autonomously produce content, images, or other data based on input or patterns learned from data. This overview explores the current landscape of the U.S. generative AI market, including key trends, drivers, challenges, and opportunities.

U.S. Generative AI Market Growth

The growth of the U.S. generative AI market is propelled by several key factors. Firstly, rapid advancements in artificial intelligence technology, particularly in machine learning algorithms and deep learning architectures, are driving the development of more sophisticated generative AI models. These models can autonomously produce high-quality content, images, and data, catering to diverse industry needs. Additionally, the increasing demand for personalized experiences across various sectors, including healthcare, finance, marketing, and entertainment, is fueling the adoption of generative AI solutions. Businesses are leveraging these technologies to automate tasks, enhance creativity, and deliver tailored experiences to customers. Furthermore, the potential cost and time savings offered by generative AI, through automation of repetitive tasks and acceleration of product development cycles, are driving adoption among enterprises seeking efficiency gains. Overall, these growth factors signify a promising outlook for the U.S. generative AI market, with opportunities for innovation and transformative outcomes across industries.

U.S. Generative AI Market Trends:

• Adoption Across Industries: Generative AI technology is witnessing widespread adoption across various sectors, including healthcare, finance, marketing, and entertainment, to automate tasks, enhance creativity, and improve decision-making processes.
• Integration with Creative Tools: Generative AI platforms are increasingly integrated with creative tools such as design software, enabling designers and artists to leverage AI-generated content to streamline workflows and explore new creative possibilities.
• Ethical Considerations: As generative AI becomes more sophisticated, ethical considerations around data privacy, bias, and accountability are gaining prominence, prompting businesses to develop responsible AI practices and frameworks.
• Technological Advancements: Breakthroughs in machine learning algorithms, deep learning architectures, and computational power are driving the development of more advanced generative AI models capable of generating high-quality and realistic content.
• Demand for Personalization: Businesses are leveraging generative AI to deliver personalized experiences to customers, such as personalized product recommendations, content curation, and targeted advertising, driving demand for AI-powered solutions.

Component Insights

Segmented by components, the market further breaks down into services and software. In 2023, the software segment claimed the largest revenue share, amounting to 65%, and is projected to maintain its dominance throughout the forecast period. The expansion of the software sector can be attributed to several factors, including the adoption of advanced technologies, increased investment in artificial intelligence, rising demand for automation, and favorable regulatory conditions. Moreover, the emergence of generative AI software is expected to significantly impact various sectors and industries such as manufacturing, gaming, and design.

Conversely, the service segment is poised to witness the fastest Compound Annual Growth Rate (CAGR) during the forecast period. This growth is fueled by escalating concerns over fraud detection, risk factor modeling, data protection, and trading prediction. Cloud-based generative AI services are anticipated to gain traction due to their scalability, flexibility, and cost-effectiveness, thereby propelling the segment's growth. For instance, in February 2024, S&P Global launched a generative AI search feature on the S&P Global Marketplace. This Global Solution for Marketplace Generative AI Search aims to streamline and enhance the exploration of S&P Global's offerings worldwide. By interpreting users' natural language queries and providing comprehensive responses, the platform improves the search experience. Furthermore, it takes proactive measures by suggesting additional relevant data sets and services, thereby broadening users' insights and options.

Technology Insights

The market is categorized by technology into transformers, Generative Adversarial Networks (GANs), diffusion networks, and variational auto-encoders. The transformers segment held the largest revenue share in 2023, mainly due to the increasing adoption of transformer applications such as text-to-image AI, which converts text into images. Numerous companies are integrating text-to-image AI tools into their platforms to revolutionize the creation of visuals for projects, campaigns, and brands. For example, in January 2023, Shutterstock, Inc. launched its AI image generation platform, available in multiple languages, enabling prompt conversion into licensable visuals for its customers.

Additionally, the diffusion networks segment is projected to experience the fastest growth during the forecast period. Image synthesis has become vital across various industries including healthcare, automotive & transportation, defense, media & entertainment, BFSI, among others. This technology has empowered these industries to meet the increasing demands for image generation and deliver high-value services to businesses, government entities, and the general public.

End-use Insights

The market is divided by end-use into media & entertainment, BFSI, IT & telecommunications, healthcare, automotive & transportation, and others. The "others" sub-segment includes security, aerospace & defense. In 2023, the media & entertainment segment held the largest market share and is anticipated to grow at a significant Compound Annual Growth Rate (CAGR) during the forecast period. The increasing adoption of generative AI for enhancing advertisement and campaign journalism is expected to drive demand for this technology in the media & entertainment industry. For example, in October 2023, Amazon Ads introduced a generative AI solution for image generation aimed at assisting advertisers in creating more engaging content and enhancing their ad campaigns.

On the other hand, the BFSI segment is projected to witness the fastest growth rate during the forecast period. This growth is attributed to simplifying complex data analysis, improving customer experiences, and enhancing risk management within the banking sector. Moreover, the BFSI industry has found generative AI valuable in generating marketing visuals and text, as well as enhancing the efficiency and accuracy of machine learning applications through data generation.

Application Insights

The Natural Language Processing (NLP) segment emerged as the market leader in 2023 and is forecasted to maintain significant growth momentum throughout the forecast period. Generative AI plays a pivotal role in advancing NLP processing by providing intricate prompts akin to human feedback. Furthermore, generative AI within NLP introduces advanced models and ethical considerations, fostering opportunities for applications in content summarization, sentiment analysis, and personalized user experiences.

Conversely, the computer vision segment is poised to experience the most rapid Compound Annual Growth Rate (CAGR) during the forecast period, driven by the escalating adoption of computer vision systems within the automotive and transportation sectors. Additionally, generative AI techniques empower computers to comprehend and manipulate visual data in unprecedented ways, including image inpainting, style transfer, and image-to-image translation, thereby unlocking novel applications in digital content creation, medical imaging, autonomous vehicles, and surveillance systems.

Model Insights

The large language model segment asserted its dominance in the market during 2023 and is forecasted to sustain substantial growth at a significant Compound Annual Growth Rate (CAGR) throughout the forecast period. Breakthroughs in neural network architectures, particularly transformer-based models like GPT, have facilitated the creation of large language models with millions, and even billions, of parameters. This advancement has notably enhanced their capacity to comprehend and generate text resembling human language across diverse contexts and domains. Such technological progressions have sparked heightened interest and investment in generative AI, propelling its rapid expansion and adoption across various applications.

Conversely, the multimodal generative model is poised to witness the fastest growth during the forecast period. Its capability to augment accuracy and resilience by amalgamating data from different modalities is a significant driver for its growth. This model type can achieve heightened performance by integrating information from multiple sources, thereby fueling its proliferation within the industry. Moreover, the segment of image and video models is anticipated to undergo substantial growth owing to its proficiency in swiftly producing high-quality and realistic images and videos. These outputs, often challenging or unattainable through conventional methods, are propelling the widespread adoption and advancement of this model type.

U.S. Generative AI Market Key Companies

• Google LLC
• Amazon Web Services, Inc.
• IBM
• Microsoft
• Hugging Face
• Cohere
• Tome.App
• AssemblyAI
• Midjourney
• Klaviyo

U.S. Generative AI Market Segmentations:

By Component

• Software
• Services

By Technology

• Generative Adversarial Networks (GANs)
• Transformers
• Variational auto-encoders
• Diffusion Networks

By End-use

• Media & Entertainment
• BFSI
• IT & Telecommunication
• Healthcare
• Automotive & Transportation
• Gaming
• Others

By Application

• Computer Vision
• NLP
• Robotics and Automation
• Content Generation
• Chatbots and Intelligent Virtual Assistants
• Predictive Analytics
• Others

By Model

• Large Language models
• Image & Video generative models
• Multi-modal generative models
• Others