GenAI Capabilities Rapidly Become Expected Features as Providers Compete on Infrastructure, Models, Applications, and Services

The AI vendor race is restructuring the business of tech, and every tech provider must reevaluate what it takes to compete and win in this evolving landscape, according to Gartner, Inc., a business and technology insights company.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250929119624/en/

With various AI vendor races taking place across the AI technology stack (see Figure 1), Gartner is examining which vendors are positioned to win these races, ranging from large vendors, to rising contenders to new entrants.

In the Gartner report The AI Vendor Race: What It Takes to Win in Volatile Conditions, Gartner analysts explain that traditional provider-enterprise value relationships will not drive AI adoption, and it isn’t sufficient to sell an AI tool and expect customers to find value.

“The AI vendor race is not a single race with a clear finish line, but rather a series of overlapping competitions, where the endgame can range from market leadership to technological breakthroughs, or simply maintaining relevance,” said Anthony Bradley, Group Vice President at Gartner.

“Vendors must pay close attention to the frequent shifts in the market to gain advantage and protect their position,” said Bradley. “It requires an understanding of competitor capabilities and their demonstrated and likely moves in the race. Vendors must also have a deep understanding of AI adoption behaviors and how they’re positioned in the race against competitors to meet or even drive demand.”

The AI race is always changing. GenAI advantages are eroding much faster than other innovation cycles, putting more pressure on tech providers. For example, leaders face a rapidly maturing GenAI market, where in less than 36 months, GenAI capability will become a baseline requirement for offerings. In fact, every software market has already surpassed first-mover advantage, and by 2026, more money will be spent on software with GenAI than without.

The GenAI models market is projected to grow by 149.8% in 2025, surpassing $14 billion. By 2028, Gartner expects the market to stabilize at 38% annual growth, as GenAI becomes increasingly embedded in applications. Meanwhile, the global market for AI-optimized servers is expected to grow by 90.9% in 2025, and by 2027, nearly all premium computing devices will be AI-enabled.

“Providers must pivot from functional, use-case-oriented AI to approaches that deliver real business outcomes tied to mission-critical initiatives,” Bradley added. “Less than one in five GenAI projects will achieve their desired business value through 2026. To close this gap, product leaders need to integrate targeted business outcomes into product engineering, marketing, and implementation. Those who fail to make this shift will not remain competitive.”

Gartner clients can learn more by visiting the Gartner AI Vendor Race microsite. Non clients can read more in the Gartner article, Tech Vendors: Here’s What It Takes to Win in the AI Race.

Learn how to address the why, when and how of integrating GenAI capabilities into product offerings in the complimentary Gartner ebook Top GenAI Opportunities for Tech Products.

About Gartner AI Use Case Insights

Gartner AI Use Case Insights is an interactive tool that helps technology and business leaders efficiently discover, evaluate, and prioritize AI use cases to potentially pursue. Clients can search over 500 use cases (applications of AI in specific industries) and over 380 case studies (real world examples) based on industry, business function, and Gartner’s assessment of potential business value. Clients can access the interactive tool at https://tools.gartner.com/use-case-insights.

Gartner IT Symposium/Xpo

At Gartner IT Symposium/Xpo, CIOs and IT executives will learn how to become agents of change in their organizations and harness AI for successful digital transformation. Follow news and updates from the conferences on X and LinkedIn using #GartnerSYM, and on the Gartner Newsroom.

About Gartner for High Tech Leaders and Providers

Gartner for High Tech Leaders and Providers equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech.

Follow news and updates from Gartner for High Tech on X and LinkedIn using #GartnerHT. Visit the Gartner Newsroom for more information and insights.

About Gartner

Gartner, Inc. (NYSE: IT) delivers actionable, objective business and technology insights that drive smarter decisions and stronger performance on an organization’s mission-critical priorities. To learn more, visit gartner.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250929119624/en/