The release of consumer-focused artificial intelligence (AI) tools such as ChatGPT and Google’s Bard is set to fuel a decade-long boom that grows the market for generative AI to an estimated US$1.3 trillion (RM5.97 trillion) in revenue by 2032 from US$40 billion last year.
The sector could expand at a rate of 42% over ten years — driven first by the demand for infrastructure necessary to train AI systems and then the ensuing devices that use AI models, advertising and other services, according to a new report by Bloomberg Intelligence analysts led by Mandeep Singh.
“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,” Singh said in a statement on Thursday (June 1). “The technology is set to become an increasingly essential part of IT spending, ad spending and cybersecurity as it develops.”
Demand for generative AI has boomed worldwide since ChatGPT’s release late last year, with the technology poised to disrupt everything from customer service to banking. It uses large samples of data, often harvested from the internet, to learn how to respond to prompts, allowing it to create realistic-looking images and answers to queries that appear to be from a real person.
Amazon.com Inc’s cloud division, Google parent Alphabet Inc, Nvidia Corp and Microsoft Corp, which has invested billions of dollars in OpenAI, are likely to be among the biggest winners from the AI boom, according to the report.
The largest driver of revenue growth from generative AI will come from demand for the infrastructure needed to train AI models, according to Bloomberg Intelligence’s forecasts, amounting to an estimated US$247 billion by 2032. The AI-assisted digital ads business is expected to reach US$192 billion in annual revenue by 2032, and revenue from AI servers could hit US$134 billion, the report said.
Investors, meanwhile, took a pause from their obsession with all things AI on Thursday. The software firm C3.ai fell as much as 24% in New York, extending Wednesday’s 9% decline following a disappointing sales outlook.
Chipmaker Nvidia, which has emerged as Wall Street’s biggest AI bet, resumed its rally, rising 3.3%. Its shares have soared by 28% since May 24, and the Silicon Valley firm briefly reached a US$1 trillion valuation this week.
Meanwhile, Reuters cited that Japan’s privacy watchdog said on Friday it has warned OpenAI, the Microsoft-backed startup behind the ChatGPT chatbot, not to collect sensitive data without people’s permission.
OpenAI should minimise the sensitive data it collects for machine learning, the Personal Information Protection Commission said in a statement, adding it may take further action if it has more concerns.
Regulators around the world are scrambling to draw up rules governing the use of generative artificial intelligence (AI), which can create text and images, the impact of which proponents compare to the arrival of the internet.
While Japan has been on the backfoot with some recent technology trends, it is seen as having greater incentive to keep pace with advances in AI and robotics to maintain productivity as its population shrinks.
The watchdog noted the need to balance privacy concerns with the potential benefits of generative AI including in accelerating innovation and dealing with problems such as climate change.
Japan is the third-largest source of traffic to OpenAI’s website, according to analytics firm Similarweb.
OpenAI CEO Sam Altman in April met Prime Minister Fumio Kishida with an eye to expansion in Japan, ahead of the Group of Seven (G7) leaders summit where Kishida led a discussion on regulating AI.
The EU, a global trendsetter on tech regulation, is working on what could be the first set of rules to govern AI.
Altman last week said OpenAI had no plans to leave Europe after earlier suggesting the startup might do so if EU regulations were too difficult to comply with.
