ARTICLE
Inside AI’s rapid expansion: What every investor should know
Bloomberg Professional Services
This article was written by Mike Pruzinsky, Equity Index Product Manager at Bloomberg Index Services Limited (BISL).
Artificial intelligence (AI) is no longer an experimental tool on the edge of technology. What started with chatbots, and copilots is now spreading into every corner of hardware, cloud, advertising, gaming, and enterprise services. It is becoming widely used across industries, leading to productivity gains and the ability to get smarter answers faster. Bloomberg Intelligence projects generative AI could produce $1.8 trillion in annual revenue by 2032, representing up to 16% of all tech spending.
Figure 1: Bloomberg Intelligence projections
Source: Bloomberg Intelligence
The AI story in 2025 is about scale, speed, and disruption. A new generation of “reasoning models” is reshaping the playing field. These models go beyond simple search and response, enabling more complex decision-making across text, images, audio, and video. As a result, the demand for AI inference, the process of running models in real-world applications, is expected to surpass training workloads years earlier than originally forecast.
At the same time, AI agents are moving from curiosity to ubiquity. From contract review to customer service, and personalized shopping to software development, AI-driven agents are becoming indispensable. By 2032, agent deployments could fuel a market worth over $214 billion, underscoring their central role in enterprise and consumer ecosystems.
Figure 2: AI catalysts to watch driving adoption
Source: Bloomberg Intelligence
This is not just a software story. Hardware companies including semiconductors, hyperscaler capex, and IT services are being transformed to support this shift. Figure 3’s forecast on generative AI spending is particularly striking, highlighting not only the speed of adoption but also the structural pivot from training to inference that underpins the industry’s economics.
Figure 3: Generative AI spending and training vs inference forecasts
Source: Bloomberg Intelligence
Why it matters for investors and innovators
For investors, AI is not simply another technology trend but a structural shift that is already reshaping revenue streams across industries. On the hardware side, AI workloads already represent more than 20% of global server revenue, with forecasts suggesting that share could climb to 40% within a few years as demand for specialized chips and infrastructure accelerates. In software, the disruption is even more striking: copilots, coding assistants, and creative platforms are redefining workflows, creating new subscription models, and reinforcing competitive moats for the companies with scale and proprietary data.
Advertising and consumer adoption add another layer of opportunity, with AI-enabled personalization and content generation poised to drive more than $200 billion in incremental digital ad spending by 2032. Taken together, these shifts point to AI as a long-term driver of earnings growth and valuation re-ratings across multiple sectors, making it a theme that investors cannot afford to ignore.
Figure 4: Generative AI software spending forecast
Source: Bloomberg Intelligence
Tracking the AI boom through Bloomberg Indices
Investors looking to capture and measure this transformation can do so directly through Bloomberg’s Artificial Intelligence and AI Value Chain Indices. The Bloomberg Artificial Intelligence Index (BAIT) provides broad exposure to leading global companies driving AI adoption across hardware, software, and services. Meanwhile, the Bloomberg AI Value Chain Index (BAIVT) takes a more structured approach by tracking companies aligned to the backbone of the AI ecosystem, from semiconductor designers and cloud hyperscalers to application developers and enterprise adopters. Together, these indices offer a transparent, rules-based framework for investors to follow the growth of the AI economy and position themselves across the full spectrum of beneficiaries.
Figure 5: AI Index 5-year performance
Source: Bloomberg as of 8/25/2025
What’s next in this series
This is just the first chapter of our three-part AI index series:
- Part 2: Mapping the AI value chain: We will break down how the opportunity set spans chips, cloud infrastructure, models, and applications, and how an index can track value creation across the chain.
- Part 3: Spotlight on top AI companies: We will highlight the leaders and challengers best positioned to capture this growth.
For investors this is more than a technology story and not a temporary hype cycle. It is a generational chance to capture growth at the foundation of a multi-trillion-dollar transformation.
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