Enterprises are directing over 40% of their AI budget toward scaling generative AI (Gen AI) deployments. To achieve this, they are primarily collaborating with cloud platforms and service providers to leverage their expertise in Gen AI workflow orchestration, industry- and domain-specific customizations, and responsible AI integration. At the same time, startups are emerging to support enterprises through niche solutions around LLMOps, emotional intelligence, and voice cloning.
Both demand- and supply-side trends are covered in Avasant’s Generative AI Services 2024 Market Insights™ and Generative AI Services 2024 RadarView™, respectively. These reports present a comprehensive study of Gen AI service providers and closely examine the market leaders, innovators, disruptors, and challengers in this space. They also provide a view of key market trends and developments impacting the Gen AI services space.
Avasant evaluated 35 service providers across three dimensions: practice maturity, partner ecosystem, and investments and innovation. Of these 35 providers, we recognized 16 that brought the most value to the market over the past 12 months.
The report recognizes service providers in four categories:
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- Leaders: Accenture, Capgemini, Cognizant, HCLTech, IBM, Infosys, TCS, and Wipro
- Innovators: Genpact and Tech Mahindra
- Disruptors: EXL, Persistent Systems, and Quantiphi
- Challengers: LTIMindtree, NTT DATA, and PwC
Figure 1 below from the full report illustrates these categories:
“Most enterprises are currently leveraging Gen AI to boost productivity, but its role is evolving rapidly,” said Anupam Govil, managing partner and digital practice lead at Avasant. “As Gen AI becomes ingrained in the fabric of business operations, it will shift from a productivity tool to a key driver of business strategy and revenue generation.”
The reports provide a number of findings, including the following:
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- As enterprise projects transition from pilot and proof-of-concept phases to full-scale production, investment in Gen AI is expected to surge. Fifty-six percent of enterprises plan to increase their Gen AI spending by 25%–50% in H2 2024.
- Over 40% of enterprise AI investments are being directed toward Gen AI implementation, with primary strategies focused on prompt engineering and retrieval-augmented generation. Only a few enterprises have ventured into model fine-tuning and proprietary LLM building.
- With over 42% of the total Gen AI client share, enterprises across the BFSI, retail, and CPG sectors lead the adoption of Gen AI. They are primarily leveraging Gen AI around domain-specific content creation, knowledge search, unstructured data analytics, and insight generation.
- To support this growing enterprise interest in Gen AI, niche tech startups are building capabilities around LLMOps, full-stack LLM deployment, multimodal content generation, emotional intelligence solutions, and connected agent intelligence.
“As Gen AI evolves with extended context lengths and multimodal data execution, the demand for intensive computing across cloud and edge environments is rising,” said Chandrika Dutt, associate research director with Avasant. “This surge has made sustainable computing essential, prompting innovations like P2P networks and chips to balance sustainability and latency.”
The Generative AI Services 2024 RadarView™ features detailed profiles of 16 service providers, along with an overview of their solutions, offerings, and experience in assisting enterprises in their Gen AI journeys.
This Research Byte is a brief overview of Avasant’s Generative AI Services 2024 Market Insights™ and Generative AI Services 2024 RadarView™ (click for pricing).