New Delhi, Sep 25 (IANS): The global market for AI-related hardware and software is likely to reach between $780 billion and $990 billion by 2027, growing between 40 per cent and 55 per cent annually, according to a report on Wednesday.

Larger data centres could drive costs to between $10 billion and $25 billion in five years, as per research by Bain & Company.

David Crawford, chairman of Bain’s Global Technology practice, said that Generative AI is the prime mover of the current wave of change, but it is complicated by post-globalization shifts and the need to adapt business processes to deliver value.

“Companies are moving beyond the experimentation phase and are beginning to scale generative AI across the enterprise. As they do, CIOs will need to maintain production-grade AI solutions that will enable companies to adapt to a landscape that is quickly shifting,” Crawford mentioned.

Three key areas of opportunities – bigger models and larger data centres, enterprise and sovereign AI initiatives, and software efficiency and capabilities – could enable the AI hardware and software market to come close to a trillion-dollar industry in the next three years.

AI workloads could grow 25 per cent to 35 per cent per year through 2027, Bain estimates. As AI scales, the need for computing power will radically expand the scale of large data centres over the next five to 10 years.

AI will spur growth in data centres, from today’s 50–200 megawatts to more than a gigawatt.

These changes are expected to have huge implications on the ecosystems that support data centres including infrastructure engineering, power production, and cooling, as well as strain supply chains.

The AI-driven surge in demand for graphics processing units (GPUs) could also increase total demand for certain upstream components by 30 per cent or more by 2026.

The arrival of generative AI has added pressure on software development companies to demonstrate greater efficiency. Generative AI appears to save about 10 per cent to 15 per cent of total software engineering time, said the report.