Generative AI Is Growing Faster Than Any Previous Tech, But Returns On Trillions In Investment Remain Unproven

AI research group Exponential View has published a report concluding that the generative AI industry is expanding faster than any previous major technology platform. Based on bottom-up revenue data from more than 1,000 companies, the study estimates that the sector generated $110 billion in trailing 12-month revenue and is currently operating at an annualized revenue run rate of approximately $175 billion.

According to the report, generative AI has reached this level of growth roughly three times faster than the internet, mobile applications and cloud computing did at comparable stages of development. The analysis tracks revenue across the industry’s value chain, from consumer and enterprise applications to foundation models and cloud infrastructure.

The report also highlights the pace of acceleration. In 2023, the industry required around 180 days to generate an additional $1 billion in cumulative revenue. It now reaches the same milestone in fewer than two days. Quarterly revenue growth has remained close to 35% for more than a year, despite the market evolving from consumer chatbot subscriptions to enterprise adoption and, more recently, AI-powered coding agents.

Infrastructure investment has expanded alongside demand. Exponential View estimates that Microsoft, Google, Amazon and Oracle collectively hold around $2 trillion in contracted infrastructure backlogs, compared with almost no comparable commitments before the launch of ChatGPT. The report also notes that AI-related data center expansion has revived growth in U.S. electricity generation after more than a decade of relatively flat demand, with data centers projected to account for about 55% of new electricity demand by 2030.

Fast Growth Still Represents a Small Share of the Economy

Despite its fast expansion, the report argues that generative AI remains a relatively small part of the broader economy. The industry’s current revenue represents approximately 0.42% of U.S. gross domestic product, compared with 9.4% for the overall information technology sector. Corporate profits also remain substantially larger, exceeding total generative AI revenues by a factor of roughly 32.

While mentions of artificial intelligence on S&P 500 earnings calls have increased significantly since 2023, Exponential View said most companies have yet to disclose measurable financial benefits from AI adoption. As a result, AI-related spending continues to represent only a modest share of overall corporate expenditures for many businesses.

The report identifies infrastructure returns as the industry’s key challenge. Exponential View said nearly $2 trillion in cumulative investment is expected to be committed to AI infrastructure by 2026, raising questions about whether rising demand can offset declining token prices. According to the research, token usage has proven highly price-sensitive, with every 10% reduction in token costs generating an estimated 12% to 18% increase in demand. Monthly global token consumption has surpassed 30 quadrillion, while revenue exceeded quarterly infrastructure depreciation costs for the first time in the fourth quarter of 2025.

The report concludes that demand for generative AI is supported by stronger revenue growth than previous technology platform transitions, although the long-term financial returns on the industry’s large-scale infrastructure investments have yet to be fully established.

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