According to a new report from Counterpoint Research, consumer spending on Generative AI is set to reshape the technology landscape.
The report (Global AI Consumer Spends Forecast, 2024-2030) released on November 23 highlights exponential growth across both consumer-facing AI software and the hardware required to power it.
The AI hardware market will represent the bulk of the spending, according to the research group. A significant driver of this growth is the integration of AI capabilities into personal devices. The report forecasts that global Generative AI smartphone shipments will grow at a 26% compound annual growth rate (CAGR), with corresponding revenues growing at a 16% CAGR from 2023 to 2030.
The consumer-facing AI software sector is poised for even more dramatic growth. Counterpoint says this surge is supported by a massive increase in user adoption, with Monthly Active Users (MAUs) of AI chatbot platforms expected to grow by nearly 5 billion.
“Spending on AI hardware will remain robust over the next few years, but it is the growth in software spending which will ultimately determine the success of the new AI ecosystem,” Research Director Marc Einstein said. “And while we predict that the market for AI software will indeed grow massively over the next five years, we expect to see some winners and losers emerge in the near future.”
The report also details the competitive landscape for these platforms. While OpenAI is expected to maintain its lead with the largest userbase, Google, and Microsoft are projected to experience the highest growth in MAUs over the forecast period. The market for AI applications beyond chatbots—such as art generators, AI companions, and photo editors—is also primed for increased growth.
Einstein said that generative AI is quickly moving from being a luxury feature to a mass-market standard. While premium smartphones continue to anchor revenues through 2030, volume growth is increasingly driven by mid-tier devices, signalling the democratisation of AI capabilities. At the same time, emerging AI form factors such as laptops, XR and AI-native devices remain smaller in scale but represent the next growth frontier, gradually diversifying the AI hardware ecosystem beyond smartphones.
The lingering question facing the industry is if the massive growth in the sector will be enough to justify the unprecedented investment in the space, according to Counterpoint.
