Artificial intelligence (AI) is one of the most profitable technologies in the world right now, but how much money does it generate, exactly? According to Grand View Research, the global AI market was valued at $196.63 billion in 2023 and will grow at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030.
Ever since the launch of ChatGPT in November 2022, consumer and enterprise interest in AI has been at an all-time high as more people have begun to experiment with the technology to improve their day-to-day lives and workflows.
Today, there is a rapidly growing economy surrounding AI that has stark implications for the enterprise going forward.
The Economic Impact of AI in 2023
From all angles, the technology appears poised to make a tremendous contribution to the global economy, with soaring AI revenue being a key indicator of its growing impact. Beyond Grand View Research’s $196.63 billion estimate for last year, McKinsey estimates that AI could boost corporate profits annually by $4.4 trillion.
Michael Chui, partner at McKinsey Global Institute, and Lareina Yee, senior partner and chair of the McKinsey Technology Council, highlighted the potential of generative AI in a blog post:
“Much of the value of generative AI will come from growth in productivity across the economy – so long as employees affected by the technology shift to new work activities. We estimate that generative AI could increase labor productivity by 0.1% to 0.6% annually through 2040.”
However, AI’s economic benefits extend beyond just enhancing worker productivity. According to PWC, 45% of the total economic gains by 2030 could result from product improvements, with AI fostering a broader range of products and improved personalization of services.
AI Profits Snapshot: 5 Success Stories
When looking at AI profits among leading tech vendors, it’s clear that each has achieved remarkable success in the past year. This is especially evident when focusing on the performance of key players like OpenAI, Anthropic, Microsoft, and Nvidia.
OpenAI is undoubtedly the golden goose of the market, reportedly the third most valuable startup in the world with a valuation that has the potential to reach $80 billion. Key to this valuation has been the success of LLMs like GPT-4 and DALL-E 3, as well as the organization’s multi-billion dollar partnership with Microsoft.
OpenAI’s flagship product ChatGPT recently achieved 100 million weekly active users and has been instrumental in driving the organization’s revenue, with the organization generating roughly $1.3 billion a year.
It’s worth mentioning that this revenue has been contributed to significantly by OpenAI’s paid plans, ChatGPT Plus and ChatGPT Enterprise, which cost $20 per month and add extra capabilities from faster response times and guaranteeing access during peak times to integrating with DALL-E 3.
By December 2023, ChatGPT Enterprise had gained 22,000-25,000 customers, which would indicate that the organization is making between $440,000 to $500,000 per month from these clients alone.
Claude 2 is designed to respond to user questions and generate content with less harmful outputs. Currently, the organization claims that it will achieve an $850 million annualized revenue run rate by the end of 2024.
Up until the release of OpenAI’s GPT-4 Turbo, one of Anthropic’s key differentiators was its large context window – which enabled users to input up to 100,000 tokens in a prompt, compared to GPT-4’s then maximum of 32,000 tokens.
Microsoft, a major player in the tech industry, has seen substantial returns from its substantial investments in AI. Company executives project that AI could generate up to $10 billion in annual revenue for the business. This success is attributed to several factors.
One key reason is the widespread use of Microsoft’s infrastructure, such as Azure Cloud, by developers for training their own AI models or accessing OpenAI’s models. Additionally, Microsoft’s prominent position in the AI market has been significantly bolstered by its partnership with OpenAI. This collaboration has led to notable integrations, such as Bing Chat with GPT-4 and Microsoft Copilot with DALL-E 3, further cementing Microsoft’s status as a leader in AI technology.
Nvidia has also benefited significantly from the growth in the AI market, particularly when it comes to its investments in AI chips. But how much of Nvidia’s revenue comes from AI?
Well, the company’s 2023 Q3 earnings report highlighted that out of $18.12 billion in revenue, $14.51 billion was generated by its data center division, as more organizations invest in AI clouds to meet the demands of users.
Jensen Huang, founder and CEO of Nvidia, said in the announcement blog post:
“NVIDIA GPUs, CPUs, networking, AI foundry series, and Nvidia AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off.”
Nvidia has capitalized significantly on the development of GPUs tailored for generative AI workloads, such as the GH200 GPU. This GPU stands out due to its impressive memory capacity of 141GB and enhanced computational power.
The popularity of such GPUs is driven by the high computational demands of training and running LLMs. Training a high-functioning model can require thousands of GPUs, highlighting the intense resources needed. The introduction of more powerful GPUs like the GH200 reduces the cost of making inferences from datasets.
It also means organizations can rely on fewer GPUs to run the same model efficiently.
10 Leading Companies in Terms of AI Revenue
So, how much money does AI bring in for the tech businesses, really?
Many companies are generating substantial revenue from making strategic investments in AI as part of their product ecosystems. Below, we’re taking a brief look at the top AI companies leading in revenues.
- OpenAI: As mentioned above, OpenAI is estimated to be generating roughly $1.3 billion a year due to the development of tools like GPT-4 and DALL-E 3 and its LLM-as-a-service pricing models with ChatGPT Plus and ChatGPT Enterprise.
- Anthropic: With its flagship LLM Claude 2 standing as one of the top proprietary language models on the market, the AI company has captured sufficient interest to be estimated to achieve $850 million in annualized recurring revenue.
- Microsoft: Microsoft’s high penetration in the enterprise market combined with its strategic partnership with OpenAI and high-value product offerings like Bing Chat and the Azure Cloud have played a critical role in setting the organization up to make an estimated $10 billion in annual recurring revenue from AI.
- Nvidia: Nvidia’s continued investment in developing GPUs optimized for training and running LLMs has paid off, helping its data center division generate $14.51 billion in revenue.
- Hugging Face: LLM community platform Hugging Face has generated significant revenue by providing a home for third-party LLMs, which has led it to reportedly raise $10 million in revenue in 2021 and achieve an annualized revenue of between $30 million to $50 million.
- Stability AI: Stability AI has drawn lots of interest in the LLM market for developing the popular text-to-image model, Stable Diffusion. The company reportedly made $1.2 million in revenue in August 2023 and has secured a $1 billion valuation.
- Perplexity AI: Another key player in the industry is the AI-powered search engine Perplexity AI, which is not only valued at $520 million, but is said to be generating annual recurring revenue between $5 million to $10 million.
- IBM: IBM has devoted significant resources to AI, highlighted by its stand-out solution Watsonx, an AI-driven virtual assistant and data platform designed to explain data gathered in the enterprise. Acceleration Economy claims that IBM’s generative AI business alone is approaching a $1 billion annualized run rate.
- Google: Over the past year, Google has gained significant ground, not only releasing the research assistant Google Bard but also launching the multimodal family of LLMs called Gemini. In 2023, Google’s parent company Alphabet earned $8.4 billion in its Q3 quarterly earnings report released in October – compared to $6.7 billion the year prior.
- Salesforce: SaaS giant Salesforce has managed to grow its revenue by 11.2% to $8.72 billion in Q3 2023 after the organization made clear its intentions to invest in AI as part of its CRM subscription service.
AI Adoption Across Industries
From an industrial perspective, there are several key industries where AI is not only capturing the interest of investors but also demonstrating practical use cases that significantly improve end-user experiences. This increasing trend showcases how many companies use AI to innovate and enhance their operations.
- Insurance: In the industry, insurers are using AI to help calculate risk and provide personalized coverage packages to customers. The market as a whole was valued at $2.74 billion in 2021 and is projected to reach $45.74 billion in 2031.
- Healthcare: Many healthcare providers are experimenting with AI as a solution to discover new drugs, diagnose complex conditions, and provide 24/7 patient support. AI in the healthcare market was valued at $8.23 billion in 2020 and is projected to reach $194.4 billion by 2030.
- Banking: AI has become a staple of the banking industry, not only used to automate fraud detection but also to develop chatbots offering 24/7 customer support. Emergen Research estimates that the global AI in the banking market will reach a value of $774.65 billion by 2032.
- Retail: For retailers, AI is an extremely versatile tool used to offer customers personalized experiences and offers, as well as to automate inventory management. According to Fortune Business Insights, AI in the retail market was valued at $5.50 billion in 2022 and will reach a value of $55.53 billion by 2030.
- Marketing: In the world of marketing, AI now plays a critical role in understanding customer behavior and helps to surface insights on how to personalize content for end users. Inkwood Research estimates that the global AI in marketing market will increase from a value of $11.73 billion in 2020 to $82.70 billion in 2028.
If the data above demonstrates anything, it’s that AI is everywhere, and it has a tremendous track record of increasing profits.
For enterprises, now is the time to invest in AI before other competitors gain a significant advantage.
How much is the AI industry worth?
Which company is leading in AI?
How profitable is artificial intelligence?
- Artificial Intelligence Market Size & Trends (Grand View Research)
- AI could increase corporate profits by $4.4 trillion a year, according to new research (McKinsey & Company)
- PwC’s Global Artificial Intelligence Study: Exploiting the AI Revolution (PwC)
- OpenAI is set to see its valuation at $80 billion—making it the third most valuable startup in the world (MSN)
- OpenAI’s Revenue Crossed $1.3 Billion Annualized Rate, CEO Tells Staff (The Information)
- Around 79% of ChatGPT’s enterprise customers come from Microsoft Azure-OpenAI partnership (Moneycontrol)
- Anthropic, the OpenAI rival, is in talks to raise $750 million in funding at an $18.4 billion valuation (CNBC)
- Generative AI startup Anthropic reportedly on track to deliver $850M in annual revenue (SiliconANGLE)
- Microsoft’s stock hits record after executives predict $10 billion in annual A.I. revenue (CNBC)
- NVIDIA Announces Financial Results for Third Quarter Fiscal 2024 (NVIDIA)
- Fresh off an Intel investment, Stability AI looks for buyers as investors pressure CEO to resign (Fortune)
- IBM Generative AI Business Nears $1 Billion Run Rate (Acceleration Economy)
- Salesforce Earnings Rise on AI Push, Cost-Cutting Measures (Investopedia)
- AI in Insurance Market (Allied Market Research)
- AI in Healthcare Market (Allied Market Research)
- Global AI in Banking Market Size to Reach USD 774.65 Billion by 2032 | Emergen Research (Yahoo Finance)
- AI In Retail Market (Fortune Business Insights)
- Global Artificial Intelligence (AI) In Marketing Market Forecast 2021-2028 (Inkwood Research)