When you buy through affiliate links in our content, we may earn a commission at no extra cost to you. Learn 
The global AI market is set to grow to nearly $990B by 2027, driven by demand for larger systems and data centers, while supply chain strains loom.
These insights are presented in the fifth annual Technology Report issued by Bain & Company on September 25.
The market for AI services and hardware is expected to grow ranging from 40% to 55% each year, increasing from $185 billion the previous year, potentially generating revenues of $780 billion to $990 billion.
Growth will be driven by larger AI systems and expanded data centers as businesses and governments seek to enhance efficiency. However, this surge in demand may strain supply chains for key components like chips, leading to potential deficits in personal computers, smartphones, and semiconductors.
-
AI could drive a sharp increase in PC and smartphone sales, similar to the demand surge during the pandemic | Source: bain.com
Growing demand for upstream chip components, particularly integrated circuit design, may rise by over 30% by 2026, creating challenges for manufacturers. Additionally, Bain indicated that the cost of larger data centers could soar from $1–4 billion today to $10–25 billion in five years as capacity enlarges from 50–200 megawatts to over a gigawatt.
Companies are transitioning from experimentation to scaling generative AI in their operations. They are likely to favor lightweight small language models, similar to those used in OpenAI’s ChatGPT, to address concerns over financial implications and data privacy.
Countries such as Canada, France, the UAE, Japan, and India are investing billions in sovereign AI to develop local computing systems and architectures. However, building effective sovereign AI ecosystems will require significant time and resources.
