According to Deloitte, global Gen AI enterprise spending will surge by 30% in 2024, with chip market reaching $50B

Enterprise spending on generative Artificial Intelligence (Gen AI) will grow by 30% in 2024, from an estimated US$16 billion in 2023, according to the latest edition of the Deloitte Technology, Media and Telecommunications (TMT) Predictions report, and more companies are expected to develop their own generative AI models as they seek to drive greater productivity, optimize costs and unlock novel insights and innovations.

Companies’ appetite for Gen AI adoption will be matched by software vendors’ willingness to incorporate the technology in their own offerings. The Deloitte report predicts that almost all enterprise software companies will integrate Gen AI in at least some of their offerings by the end of 2024, which could boost theirrevenue by US$10 billion, an important milestone for the first year of a new market, but likely short of some expectations as revenues could occur mainly in the second half of the year.

The market for specialized chips optimized for Gen AI will also grow in the coming months, the report estimates, as it would be valued at over US$50 billion in 2024, up from close to nothing in 2022. Gen AI chip revenue could reach US$400 billion in 2027, and along with other AI-enabling chips, it could represent half of the value of all semiconductors sold.

“The rise of generative artificial intelligence has brought AI to the center of enterprise innovation. This technology has quickly entered the list of priorities, but it is essential for companies to also acknowledge the challenges that this progress entails, among which updating legacy systems, ensuring data privacy and security and even compliance, as the regulatory field for this technology is an ongoing process and constantly evolving. In this context, it is imperative for business leaders to consider the complexity of Gen AI in order for them to fully benefit from its power while effectively managing risks,” said Andrei Ionescu, Consulting Market Leader, Deloitte Romania.

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On the streaming front, providers of such services have been mostly successful in attracting large audiences, but unprofitably. The report outlines that the landscape could become more complex, but with a significant leap towards profitability, with leading US streaming video-on-demand providers more than doubling their tier offerings, which provide customers multiple product plans with specific benefits at different price points, from an average of four options in 2023 to eight or more by 2024. These offerings are expected to cover combinations of ads, no ads, access to all content, access to limited content, monthly and yearly contracts and bundles, and potentially innovations, such as loyalty plans.

In terms of mobile devices, the smartphone is expected to have one of its most successful years ever in 2024, with authentication becoming an increasingly important addition to the device’s value. Smartphones may be used trillions of times in 2024 to authenticate across an ever-widening range of actions, such as accessing websites, making payments online and in-store, unlocking cars and controlling entry to physical buildings. Considering this evolution, trust and security concerns rise, the report forecasting the annual cost of data breaches at more than US$5 trillion in 2024.

As for the audio entertainment market, such as podcasts, streaming music, radio and audiobooks, the report shows that more consumers worldwide will engage with it in 2024, bringing the number of monthly average listeners to over 1.7 billion for podcasts, 270 million for audiobooks, 750 million for music streaming subscribers, and close to 4 billion for radio listeners. While more consumers are turning in to audio entertainment formats, the revenues of the market could remain modest, registering a one-digit growth rate (7%) across all formats.

In the following two years, the clear demarcation between the cinematic and interactive universes is predicted to fade and more studios will likely approach their intellectual property (IP) with series, films and games in mind.Players in the media industry, such as HBO Max, which serialized “The Last of Us” games in 2023, and Netflix, which launched mobile gaming offers, including video games based on movies and series from the streaming titles, are already laying the foundation of this market. Deloitte TMT Predictions 2024 shows that the share of theatrical box office revenues from video game IP will double by 2025 and that major video streamers will include shows based on games.

Deloitte’s annual TMT Predictions report provides an outlook on technology, media and telecommunications trends that may disrupt and transform business and consumer ecosystems worldwide.