Global AI Market on Track to Nearly Hit $1 Trillion by 2027

Key Takeaways

The global AI market could soar to almost $990 billion by 2027, largely driven by demand for bigger systems and data centers.

AI services and hardware are set to grow rapidly, with annual increases between 40% and 55%.

However, supply chain challenges may cause shortages as companies race to adopt generative AI technologies.

The future of Artificial Intelligence is looking incredibly bright, with the global AI market expected to reach a staggering $990 billion by 2027. It’s amazing to think that in just a few years, the world could witness such explosive growth, all thanks to the increasing demand for bigger, more advanced AI systems. These powerful systems, often found in massive data centers, are quickly becoming essential for businesses and governments alike, helping them operate more efficiently and intelligently.

These exciting insights were revealed in the latest Technology Report by Bain & Company, released on September 25. The numbers speak for themselves—AI services and hardware are predicted to grow at an impressive rate, between 40% and 55% annually, generating as much as $780 billion to $990 billion. It’s hard not to feel the excitement of where this rapid expansion is leading us.

The AI market is anticipated to grow to between $780 billion and $990 billion by 2027 | Source: bain.com

But with such high demand comes new challenges. As more companies embrace generative AI technologies—similar to what powers tools like OpenAI’s ChatGPT—supply chains may struggle to keep up. Critical components, especially chips, could face shortages, affecting the production of everyday devices like computers and smartphones. This puts the spotlight on manufacturers, who are scrambling to meet the rising demand for upstream chip components, like integrated circuit designs, which are expected to jump by over 30% by 2026.

The cost of building large data centers is also set to skyrocket. Right now, constructing one can cost anywhere from $1 billion to $4 billion, but over the next five years, that number could jump to $10 billion or more. Data centers are expanding rapidly, with their capacity expected to grow from 50–200 megawatts to over a gigawatt, which means they’ll need more energy and resources to operate.

AI could drive a sharp increase in PC and smartphone sales, similar to the demand surge during the pandemic | Source: bain.com

It’s not just businesses that are pushing AI forward. Countries around the globe—like Canada, France, the UAE, Japan, and India—are making huge investments in sovereign AI systems. They’re aiming to build local computing infrastructures to reduce dependence on global suppliers and protect data privacy. However, building these sovereign AI ecosystems isn’t easy. It will take significant time, effort, and resources to make these projects a reality.

As AI continues to evolve, companies are moving beyond just experimenting with generative AI—they’re integrating it into their operations in ways that truly scale. Many are likely to favor smaller, more lightweight models that balance financial costs and privacy concerns. With so much potential on the horizon, the AI market’s growth journey will be an exciting one to watch.