Gartner warns that the market for large language model (LLM) providers faces a potential extinction phase due to high capital costs and excessive competition. While global spending on generative AI is projected to hit $644 billion by 2025, the survival of numerous LLM providers is in question. CIOs are increasingly favoring commercial-off-the-shelf solutions for their reliability and efficiency, which may lead to a consolidation in the LLM market, similar to that in the cloud industry dominated by giants like AWS, Azure, and Google Cloud.
Adoption right now is the most important thing: speed, adoption, being in the market - there is extinction coming. The market will not be able to support this number of model providers that we currently have.
Despite model improvements, CIOs will reduce [proof of concept] and self-development efforts, focusing instead on GenAI features from existing software providers.
Cloud was more transformational in one sense, [it] changed how we did and what we did and where we did it. But GenAI comes in and adds to whatever it is you're running.
The market for model providers would see a similar consolidation to that of the cloud market, which is currently dominated by AWS, Microsoft Azure, and Google Cloud.
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