Agentic AI access exceeding market demand
Supply of agentic AI models, platforms and products already far exceeds demand which will result in consolidation and market correction. The losers of consolidation will be undifferentiated AI companies and their investors, market research firm Gartner says in a new forecast. The company has earlier estimated that worldwide spending on AI will reach close to $1.5 trillion in 2025 and $2 trillion in 2026.
The forecast says that agentic AI markets will consolidate in the short term as hype and fear of missing out (FOMO) give way to fundamental economics. In this AI Vendor Race, the losers of consolidation will be undifferentiated AI companies and their investors. The winners will be capital-rich incumbents with the resources to acquire promising technologies and talent.
“While we see early signs of market correction and consolidation, product leaders should recognise this as a regular part of the product life cycle, not a sign of inevitable economic crisis,” says Will Sommer, the company’s senior director and analyst.
“Over the longer term, consolidation will enable industry leaders to develop agentic products that meet the technical and business requirements of customers who are presently struggling to adopt AI agents.”
“The mass proliferation of AI providers launching agentic models, agentic-integrated platforms and other agent-infused products far exceeds the present demand”, the forecast says.
“Similar to other corrections in energy, telecommunications, and the dot-coms, product leaders should view this stage of the agentic AI market as a transition period in which business models are forced to calibrate to transformational technologies.”
“At this point, the underlying product, agentic AI, is sound, and the current market correction, where markets rationalize and consolidate, is a regular part of the product life cycle”, Sommer says.
“However, a ‘speculative bubble’ could still form if investment becomes detached from agentic AI’s intrinsic potential to deliver tangible and commensurate economic value.”
“Large providers will establish expansive, integrated ecosystems that significantly improve agentic performance, leading to more reliable products targeted at specific business outcomes,” says Sommer.
“Domain-specific language models, which provide superior value and performance in specialised applications, represent one such innovation.”
“These evolutions, paired with changing consumer habits, skills and processes, will facilitate the mass adoption of agentic products.”
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