- Rules of engagement are being rewritten, and resting on traditional business models may leave even the most established players behind.
- Competitive edge of GenAI innovations is eroding at a record pace—much faster than in previous cycles of technology evolution.
The AI revolution isn’t a simple sprint; it’s a high-stakes, constantly shifting series of competitive marathons.
According to Gartner, Inc., a leading technology insights firm, every tech company must rethink its competitive strategy as the AI vendor race reshapes the entire tech landscape. The rules of engagement are being rewritten, and resting on traditional business models may leave even the most established players behind.
From foundational infrastructure to advanced applications, Gartner sees multiple “AI races” happening simultaneously across the technology stack. The competitors include everything from tech giants to innovative newcomers.
Each one is vying for dominance, whether that means setting industry standards, capturing market share, or simply avoiding obsolescence.
Anthony Bradley, Group Vice President at Gartner, notes that victory in the AI race doesn’t look the same for everyone.
“It’s not one linear race with a universal finish line,” he explains. “Think of it as overlapping competitions with different outcomes—market leadership, breakthrough technology, or just keeping up with the rapid pace of change.”
New rules for winning
Success today isn’t as simple as selling an AI solution and expecting customers to realise value on their own. The old model of offering tools and walking away is fading.
Tech providers must deeply understand both their competitors’ moves and their customers’ shifting adoption patterns. This involves:
- Monitoring market shifts and adjusting strategies accordingly
- Studying the strengths, weaknesses, and potential moves of rival vendors
- Aligning business approaches with where the real demand for AI is emerging
Rapid erosion of GenAI advantages
Nowhere is change happening faster than in the Generative AI (GenAI) space. Gartner highlights that the competitive edge of GenAI innovations is eroding at a record pace—much faster than in previous cycles of technology evolution.
In less than three years, GenAI will go from “highly advanced” to “table stakes” for tech companies. By 2026, the expectation is that the budgets for software with GenAI functionality will eclipse those for software without it.
- The GenAI models market should grow by nearly 150% in 2025—crossing the $14 billion mark.
- By 2028, annual growth is expected to stabilise at just under 40%, with GenAI seamlessly woven into most applications.
- The demand for AI-optimised servers worldwide will spike by over 90% in 2025.
- Nearly all premium computing devices will be AI-enabled by 2027.
Pivoting to real business impact
Adoption rates are one thing, but business value is another. Less than 20% of GenAI projects are currently meeting business goals, according to Gartner’s projections.
Anthony Bradley urges product leaders to shift away from focusing merely on specific use cases or functions. Instead, the aim should be to deliver tangible results that align with their clients’ most critical objectives.
What does this look like for tech providers?
- Integrating business outcome metrics directly into product design and development
- Tailoring marketing and implementation strategies to demonstrate real-world ROI
- Continually reassessing client needs and market demand
For those in the tech world, the message is clear: winning the AI vendor race means adapting faster than ever before. Providers who ignore evolving customer expectations, slow down on innovation, or cling to past business models could quickly lose relevance.
Those willing to rethink what it takes to lead, however, will find not just survival, but the chance to thrive in an AI-driven future.
