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Gartner, Inc., a leading business and technology insights company, has released its report, The AI Vendor Race: What It Takes to Win in Volatile Conditions, analyzing how the AI vendor race is restructuring the tech business landscape. The report highlights multiple overlapping competitions—from large vendors to new entrants—where traditional provider-enterprise relationships fall short, and AI tools alone fail to drive adoption. As GenAI advantages erode faster than prior innovation cycles, providers must focus on business outcomes tied to mission-critical initiatives to remain competitive.
The AI vendor race is not a single competition with a clear finish line but a series of overlapping races, where outcomes range from market dominance to maintaining relevance. Gartner analysts emphasize that vendors must monitor frequent market shifts, understand competitor capabilities, and align with evolving AI adoption behaviors to gain or protect advantages.
In less than 36 months, GenAI will become a baseline requirement for software offerings, surpassing first-mover advantages in every market. By 2026, more spending will flow to GenAI-embedded software than non-GenAI alternatives, underscoring the urgency for providers to evolve beyond functional tools.
“Providers must pivot from functional, use-case-oriented AI to approaches that deliver real business outcomes tied to mission-critical initiatives,” said Anthony Bradley, Group Vice President at Gartner. “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 report details how AI vendor races span the technology stack, with Gartner examining positioned leaders, rising contenders, and new entrants. Traditional value relationships no longer suffice; selling AI tools without clear customer value hinders adoption.
The GenAI models market is projected to grow by 149.8% in 2025, surpassing $14 billion, before stabilizing at 38% annual growth by 2028 as GenAI embeds 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.
Gartner clients can explore the AI Vendor Race microsite for deeper insights. Non-clients can access the Gartner article, Tech Vendors: Here’s What It Takes to Win in the AI Race.
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As the AI vendor race intensifies, providers that adapt to outcome-focused strategies and monitor competitive dynamics will lead the transformation, ensuring sustained relevance in a rapidly evolving tech landscape.
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.
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