The global private investment in AI has reached a record high, demonstrating a dramatic expansion over the past decade. In 2024, corporate AI investment alone hit $252.3 billion, with private investment climbing by 44.5% year-over-year, and mergers and acquisitions (M&A) increasing by 12.1%. This sector has experienced a thirteenfold growth in total investment since 2014. Projections indicate that worldwide spending on AI-supporting technologies will reach $337 billion in 2025 and is expected to surpass $749 billion by 2028.
Another analysis forecasts that global enterprises will invest $307 billion in AI solutions in 2025, a figure poised to soar to $632 billion by 2028.16 The overall global AI market value is projected to more than triple, from $244 billion in 2025 to over $826 billion by 2030, with some estimates reaching as high as $1.81 trillion. This trajectory implies a compound annual growth rate (CAGR) of roughly 26–36%.
This overwhelming volume and rapid growth of AI investment hint at a "hype-driven investment cycle." The substantial capital flowing into AI, particularly GenAI, suggests a widespread confidence in its transformative power and the anticipation of imminent, broad-based returns.
However, this enthusiasm often precedes the actual realization of productivity gains. The rapid thirteenfold growth in investment since 20141 points to a speculative element, where companies are investing primarily to avoid competitive disadvantage rather than based on a clear, immediate business case with proven ROI.
This observation is reinforced by the understanding that many AI projects, especially those involving agentic AI, often commence with a focus on the technology itself, rather than a well-defined business problem.
From conversations with CIOs, we see a recurring theme: many feel pressured to ‘do something with AI’ to satisfy investors, even when they privately admit they don’t yet have the right use.
This pattern of investment, driven by perceived future value and competitive pressure, sets the stage for the "AI Mirage", where significant capital outlay may not immediately translate into tangible economic benefits.
