The global market for AI-related products is expected to soar, reaching up to $990 billion by 2027, according to Bain & Co.’s latest report. This reflects annual growth of 40% to 55%, up from $185 billion in 2022. The surge will be fueled by larger AI systems, expanding data centers, and widespread adoption by companies and governments aiming to improve efficiency.
Bain predicts rising demand for components like chips, possibly leading to supply shortages amid geopolitical tensions. Upstream chip demand could increase by 30% or more by 2026, while data center costs may skyrocket from $1 billion to as much as $25 billion in the next five years due to capacity expansions.
Countries such as Canada, France, India, Japan, and the UAE are heavily investing in sovereign AI models and infrastructure, but establishing these systems will require significant time and resources. Generative AI and smaller language models may be preferred by businesses for cost efficiency and data privacy concerns.