Large Language Model (LLM) Market Share, Size, Trends, Industry Analysis Report, By Offering (Software and Services); By Deployment Outlook; By Modality; By Model Size; By Application; By Industry Vertical; By Region; Segment Forecast, 2024- 2032
- Published Date:Mar-2024
- Pages: 116
- Format: PDF
- Report ID: PM4815
- Base Year: 2023
- Historical Data: 2019-2022
Report Outlook
The large language model (LLM) market size was valued at USD 5.03 billion in 2023. The market is anticipated to grow from USD 6.64 billion in 2024 to USD 61.74 billion by 2032, exhibiting a CAGR of 32.1% during the forecast period.
Industry Trend
The large language model represents a form of artificial intelligence meticulously trained on extensive volumes of textual data sourced from various internet repositories, including but not limited to books, articles, video transcripts, and diverse content types. Leveraging deep learning techniques, a large language model exhibits the ability to comprehend and process content, thereby executing tasks such as summarization, generation, prediction, translation, classification, and sentiment analysis with remarkable efficacy. These models significantly streamline processes that traditionally demand substantial human effort and time, such as text generation, translation, summarization, and classification. Additionally, LLMs serve as the backbone for chatbot systems, facilitating seamless interaction wherein users can seek assistance or information without enduring lengthy support queues.
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Interaction with LLMs occurs via conversational AI platforms, enabling users to pose queries or issue directives—a process commonly referred to as prompt engineering—for the LLM to execute.
The landscape for large language models (LLMs) is characterized by intense collaboration and competition among tech companies, research institutions, and open-source communities. Major players have invested heavily in developing and refining LLMs like BERT, GPT, and T5. These models are frequently shared with the broader community through open-source frameworks, fostering collaboration and innovation. Additionally, partnerships between academia and industry facilitate advancements in LLM technology, with researchers contributing new techniques and algorithms. The market is dynamic, with a multitude of startups emerging to explore niche applications and specialized variants of LLMs.
- For instance, in January 2024, AWS and Capgemini enhanced their strategic collaboration to facilitate the widespread adoption of generative AI within enterprises. This collaboration aims to assist clients in harnessing the business benefits associated with generative AI adoption while effectively addressing challenges such as cost, scalability, and trust.
It is imperative to underscore that while LLMs offer substantial utility, they should not be perceived as substitutes for human input (refer to the subsequent section delineating LLM limitations). Rather, they function as tools to enhance and expedite human productivity, alleviate writer's block, and automate routine tasks, thus affording individuals the freedom to dedicate their energies to more significant or creative pursuits. As a result, significant growth is expected in the large language model market share during the forecast period.
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Key Takeaway
- North America dominated the largest market and contributed to more than 38% of the share in 2023.
- The Asia Pacific market is expected to witness the fastest-growing CAGR during the forecast period.
- By Offering, the services segment accounted for the largest market share in 2023.
- By Industry vertical category, the BFSI segment is projected to grow at a fastest CAGR during the projected period.
What are the market drivers driving the demand for the large language model (LLM) market?
Increasing demand for natural language understanding have been projected to spur market demand.
The increasing reliance on digital communication and data stems from the pervasive integration of technology in various aspects of daily life, spanning from personal interactions to professional endeavors. As individuals and organizations generate vast amounts of digital content through emails, social media interactions, online articles, and more, there arises a pressing need for AI systems capable of deciphering and interpreting this wealth of natural language data.
The Natural Language Understanding (NLU) becomes paramount. NLU refers to the ability of machines to comprehend human language in a manner that is nuanced and contextually relevant, akin to how humans understand each other's communications. With the exponential growth of unstructured textual data on the internet, traditional methods of data analysis fall short of capturing the subtleties and complexities inherent in human language.
Large Language Models (LLMs) emerge as a pivotal solution to this challenge. These models leverage advanced deep learning techniques to ingest and process massive volumes of textual data, thereby gaining a nuanced understanding of human language patterns, semantics, and context. By training on diverse datasets sourced from the internet, including books, articles, and transcripts, LLMs acquire a broad knowledge base that enables them to comprehend and generate human-like text with remarkable accuracy.
Which factor is restraining the demand for a large language model (LLM)?
Raising concerns related to privacy, bias, and misinformation are expected to hinder the growth of the market.
The growing awareness and concern regarding ethical considerations and societal implications associated with their deployment and usage. This includes concerns related to privacy, bias, misinformation, and potential misuse of AI-generated content. Additionally, the high computational resources required for training and fine-tuning LLMs, as well as the associated environmental impact, may act as barriers to widespread adoption. Moreover, regulatory uncertainties and legal challenges surrounding intellectual property rights, data ownership, and liability could also impede the demand for LLMs.
Report Segmentation
The market is primarily segmented based on offering, deployment outlook, modality, model size, application, industry vertical and region.
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Category Wise Insights
By Offering Insights
Based on offering analysis, the market is segmented into software and services. The services segment held the largest market share in 2023. This was largely attributed to the increasing demand for outsourced services related to large language models (LLMs), including consulting, training, implementation, and support services. Businesses and organizations sought specialized expertise to effectively integrate LLMs into their operations, optimize performance, and address any challenges that arose during implementation.
Additionally, the Services segment witnessed significant growth due to the rising adoption of managed services, where companies outsourced the management and maintenance of LLM-related infrastructure and applications to third-party service providers.
By Industry Vertical Insights
Based on agriculture & forestry analysis, the market has been segmented on the basis of BFSI, education, healthcare & life sciences, IT/ITeS, law firms, manufacturing, media & entertainment, retail, and others. The Banking, Financial Services, and Insurance (BFSI) segment is anticipated to experience the highest CAGR during the forecast period. This rapid growth can be attributed to several factors within the BFSI sector. Firstly, there is a growing need for advanced data analytics and natural language processing capabilities to handle the vast amounts of textual data generated in financial transactions, customer interactions, and regulatory compliance. LLMs offer valuable solutions for tasks such as sentiment analysis, fraud detection, risk assessment, and customer service automation, which are crucial for BFSI organizations to stay competitive and compliant in an increasingly digital landscape. Additionally, the BFSI segment is known for its early adoption of innovative technologies to gain a competitive edge and mitigate risks, further driving the demand for LLMs within this industry.
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Regional Insights
North America
North America region accounted for the largest market share in 2023. The region is home to several major technology companies and research institutions at the forefront of AI development. These companies have invested heavily in the research and development of LLMs, driving innovation and advancements in the field. Additionally, North America boasts a robust ecosystem supporting AI startups, accelerators, and venture capital firms, fostering a conducive environment for the growth of the LLM market. The region's strong entrepreneurial culture and access to capital have facilitated the emergence of numerous startups specializing in AI and natural language processing, contributing to the diversity and dynamism of the LLM market.
Moreover, North America has a mature and technologically perception business landscape across various industries, including healthcare, finance, retail, and media, among others. These industries have been early adopters of AI technologies, recognizing the potential of LLMs to drive innovation, improve operational efficiency, and gain a competitive edge.
Furthermore, North America benefits from a well-developed infrastructure supporting cloud computing, high-performance computing, and data centers, providing the necessary computational resources for training and deploying large-scale LLMs.
Asia Pacific
Asia Pacific is expected to witness the fastest CAGR during the forecast period. The region is home to a rapidly expanding digital economy driven by the increasing adoption of smartphones, internet penetration, and digitalization across various sectors. This digital transformation generates vast amounts of textual data, creating a significant demand for AI technologies like LLMs to extract insights, enhance customer experiences, and drive innovation. As businesses seek to tap into these markets and engage with diverse customer bases, the demand for LLMs capable of supporting multilingual and cross-cultural communication is expected to surge.
Additionally, governments and enterprises in Asia Pacific are increasingly recognizing the strategic importance of AI and investing in initiatives to foster AI research, development, and adoption. Policies promoting digital innovation, AI education, and collaboration between academia, industry, and government are creating a conducive environment for the growth of the AI ecosystem, including LLM technologies..
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Competitive Landscape
The competitive landscape of the large language model (LLM) market is marked by fragmentation, with competition stemming from a multitude of players. Various companies, ranging from established tech giants to emerging startups, actively participate in this market, each vying for a share of the growing demand for LLM technologies. This fragmentation fosters innovation and diversity in offerings as companies strive to differentiate themselves through unique features, specialized applications, and strategic partnerships. Moreover, the competitive dynamics are further influenced by factors such as research and development capabilities, proprietary algorithms, data access, and customer relationships. As a result, the large language model (LLM) market remains dynamic and fluid, with intense competition driving continuous advancements and evolution within the industry.
Some of the major players operating in the global market include:
- Alibaba Group Holding Limited
- Amazon.com, Inc.
- Baidu, Inc.
- Google LLC
- Huawei Technologies Co., Ltd.
- Meta Platforms, Inc.
- Microsoft Corporation
- OpenAI LP
- Tencent Holdings Limited
- Yandex NV
Recent Developments
- In February 2024, Kyndryl revealed an extended partnership with Google Cloud to create responsible, generative AI solutions. This collaboration will focus on integrating Google Cloud's proprietary AI capabilities, notably Gemini, its advanced Large Language Model (LLM), with Kyndryl's ability and managed services to promote the development and implementation of generative AI solutions.
- In December 2023, Microsoft introduced InsightPilot, an automated data exploration platform driven by a Large Language Model (LLM). This ground-breaking system is tailored to streamline the data exploration journey, offering a suite of carefully crafted analysis actions to simplify the process.
Report Coverage
The large language model (LLM) market report emphasizes on key regions across the globe to provide better understanding of the product to the users. Also, the report provides market insights into recent developments, trends and analyzes the technologies that are gaining traction around the globe. Furthermore, the report covers in-depth qualitative analysis pertaining to various paradigm shifts associated with the transformation of these solutions.
The report provides detailed analysis of the market while focusing on various key aspects such as competitive analysis, offering, deployment outlook, modality, model size, application, industry vertical, and their futuristic growth opportunities.
Large Language Model (LLM) Market Report Scope
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Report Attributes |
Details |
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Market size value in 2024 |
USD 6.64 billion |
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Revenue forecast in 2032 |
USD 61.74 billion |
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CAGR |
32.1% from 2024 – 2032 |
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Base year |
2023 |
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Historical data |
2019 – 2022 |
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Forecast period |
2024 – 2032 |
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Quantitative units |
Revenue in USD billion and CAGR from 2024 to 2032 |
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Segments covered |
By Offering, By Deployment Outlook, By Modality, By Model Size, By Application, By Industry Vertical And By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America; Middle East & Africa |
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Customization |
Report customization as per your requirements with respect to countries, region and segmentation. |
FAQ's
The Large Language Model (LLM) Market report covering key segments are offering, deployment outlook, modality, model size, application, industry vertical and region.
Large Language Model (LLM) Market Size Worth $61.74 Billion by 2032
The large language model (LLM) market exhibiting a CAGR of 32.1% during the forecast period.
North America is leading the global market
key driving factors in Large Language Model (LLM) Market are increasing Demand for Natural Language Understanding (NLU)
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