This report identifies key demand-side trends in the generative AI (Gen AI) space, helping enterprises improve their Gen AI capabilities. It provides an overview of key observations and business challenges that Avasant considers important to highlight in this space.

Why read this Market Insights?

Enterprises are accelerating Gen AI adoption to achieve measurable productivity gains, fueling growth in large-scale transformation and managed service deals. At the same time, many are developing proprietary large language models (LLMs) to enhance contextual accuracy, regulatory compliance, and data sovereignty. While automation-led functions are scaling rapidly, compliance-heavy areas continue to advance at a cautious pace. In parallel, national investments in sovereign AI are strengthening domestic compute and data ecosystems, reinforcing the foundation for enterprise-grade AI maturity.

The Generative AI Services 2025 Market Insights™ aids enterprises in identifying important market trends and challenges for any Gen AI implementation that they take part in.

Methodology

The industry insights presented in this report are based on our ongoing market interactions, targeted discussions with service providers, subject matter experts, and Avasant Distinguished Fellows, analyst insights from primary and secondary research, and lessons learned from consulting engagements.

Table of contents

About the report (Pages 3–5)

• • About the Generative AI Services 2025 Market Insights report
  • Key reports of Avasant’s generative AI services research
  • Defining generative AI

Executive summary (Pages 6–8)

• • Key enterprise Gen AI services trends shaping the market
  • Avasant’s Generative AI Services 2025 RadarView recognizes 20 top-tier providers supporting the enterprise adoption of Gen AI

State of the market (Pages 9–15)

• • The number of large deals involving Gen AI and agentic AI has increased by 61% over the last year, reflecting robust enterprise demand for AI-native transformation.
  • In the same period, the share of managed service contracts explicitly itemizing Gen AI productivity gains rose by 29%, reflecting a growing focus on clear Gen AI ROI.
  • High-tech and telecom industries are the biggest adopters of Gen AI, focusing on faster app development, followed by BFS, which prioritizes improved CX.
  • About 10–12% of enterprise Gen AI projects now involve building proprietary LLMs and SLMs, reflecting a shift toward increased data control and contextual nuances.
  • Enterprises are advancing agentic AI adoption in IT, finance, operations, and customer service to drive contextual intelligence and adaptive decision-making.
  • Nations are advancing sovereign AI through targeted investments in compute, data, and foundational models to strengthen self-reliance and strategic AI leadership.

Future outlook (Pages 16–17)

• • The next frontier of Gen AI will focus on physical AI, multi-AI agentic systems, sustainable computing architectures, and real-time interactive environments.

Key contacts (Page 18)

Read the Research Byte based on this report. Please refer to Avasant’s Generative AI Services 2025 RadarView™ for detailed insights on the service providers and supply-side trends.