Two years after ChatGPT burst onto the scene, the AI market is thriving (yet AI still struggles to generate readable text in images, and making images that somewhat resemble Botero’s style remains a challenge...).
The global AI market now sits at a hefty $184 billion.
By 2030 that figure should balloon to $826 billion. And 2032 projection climbs again, hitting a staggering $1.3 trillion.
Business spending on AI has rocketed 500% this year to $13.8 billion – over six times the $2.3 billion spent in 2023.
This is reflective with organisations now allocating 4.3% of IT budgets to GenAI, with 40% of investments coming from permanent budgets rather than experimental funds.
The adoption wave is massive: 72% of organisations worldwide now use AI in at least one business function, up from 55% last year.
As AI adoption accelerates, the focus is shifting from experimentation to real-world implementation—marking a turning point in how businesses deploy these technologies.
Transition from Pilots to Production
While 2024 didn't fully deliver on the "year of production AI" promise, 2025 looks set to be the breakthrough year.
Companies are set to move beyond pilots into full deployment, driven by slick salespersons, competitive pressures and the emergence of Agentic AI (the evolution expected to disrupt the software market and the U.S. services economy later this year – more insights to come in an upcoming article!).
Fragmentation of the AI Landscape
Competition is fierce. A new GenAI tool launches weekly, and the landscape is fragmenting into specialised applications for specific industries. The major players are vying for top spot in the consumer and business markets.
The business-consumer split is particularly fascinating.
Companies want robust, integrated solutions with proper guardrails.
Meanwhile, consumer AI has become a full-on race for mindshare. ChatGPT now has approx. 400 million weekly active users – that's roughly 57 million people using it daily, with nearly 40% of American adults having tried GenAI, and almost one-third using it daily or nearly daily.
In an article later this week we'll dive into who's leading the AI race in the consumer space and where the competitive advantages and disadvantages lie for each contender.
New Zealand's Embrace of AI
Kiwis are rapidly embracing AI, with approx. 84% of knowledge workers incorporating GenAI into their roles, ranking us third globally in adoption.
Interestingly, only 19% use employer-provided AI tools – most Kiwis are adopting these technologies personally rather than through work (termed ‘shadow AI’, a leading concern or employers and governments).
Business adoption is climbing too. Some 67% of NZ organisations have implemented AI technologies, with 96% reporting increased worker efficiency.
The economic impact of GenAI is predicted to add NZ$76 billion annually to New Zealand's GDP by 2038 (but slow business adoption places this at risk… see here) – a potential 15% boost driven by a 1.4% annual productivity jump. Our AI market should reach US$695.90 million in 2025, growing at 27.23% annually to hit US$2.32 billion by 2030.
Challenges Ahead
Despite these advancements, similar challenges remain the world over with concerns about regulation and policy (whether it be a lack of, overreaching or sparse), data privacy and security, as well as bridging the gap between personal and organisational AI tool adoption.
A significant challenge is the lack of AI skills within enterprises, with over half identifying this as a key inhibitor to GenAI adoption.
The Competitive AI Arena
The AI landscape has evolved into a competitive arena with major players like OpenAI's ChatGPT, Anthropic's Claude, Google's Gemini, Meta's Llama, and xAI's Grok vying for dominance. Each brings unique strengths and strategies to the table.
✌️ Mike
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