The global race among AI vendors is reshaping competition across the entire technology stack, forcing providers to rethink strategies and business models, according to a new Gartner report.
The research firm said that the “AI vendor race” is not a single contest but a series of overlapping competitions spanning infrastructure, models, applications, and services. The outcomes, Gartner noted, will vary — from market leadership to technological breakthroughs, or simply survival in a volatile landscape.
“The AI vendor race is not a single race with a clear finish line, but rather a series of overlapping competitions,” said Anthony Bradley, Group Vice President at Gartner.
“Vendors must pay close attention to frequent market shifts to gain advantage and protect their position. “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,” added Bradley.
GenAI’s Rapid Maturation
Gartner warned that generative AI (GenAI) capabilities are advancing and commoditizing at unprecedented speed. What was once a differentiator is now fast becoming a basic requirement. Within the next 36 months, GenAI features will be expected across nearly all offerings, Gartner said.
By 2026, enterprises will spend more on software with GenAI embedded than without. The global GenAI models market is projected to surge 149.8% in 2025 to exceed $14 billion, before stabilizing at 38% annual growth by 2028 as GenAI becomes deeply integrated into business applications.
Hardware and Infrastructure Demand
The report also highlights the infrastructure race underpinning AI adoption. The market for AI-optimized servers is expected to expand by 90.9% in 2025, while by 2027 nearly all premium computing devices will be AI-enabled.
From Features to Business Outcomes
Gartner cautioned that less than 20% of GenAI projects are expected to deliver on business value through 2026, underscoring the need for providers to shift focus.
“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.”
The Bigger Picture
Gartner concluded that success in the AI vendor race will depend on more than speed to market. Vendors must demonstrate the ability to anticipate adoption patterns, integrate GenAI into mission-critical operations, and compete across an ecosystem where advantage is increasingly short-lived.
