Generative AI (GenAI) has the potential to provide savings of 20-40% in the software development process, and the efficiency gains achieved will probably be reinvested into the business to pursue further technological innovation, according to an Axis Capital report. Considering that savings are projected to be reinvested into innovative technology for improved business, GenAI is improbable to reduce tech expenditure.  

"GenAI could generate savings of 20-40% in the software development lifecycle. Axis Capital's institutional research sees no risk to tech spends with these savings being ploughed back into innovative tech for better business," said the report titled 'GenAI: Millennial Shapeshifter to Transform Services'.

Academics from top institutions who monitored productivity improvements among roughly 5,000 developers in three companies discovered that AI enhanced software developer productivity by 26%.

"Interest in and use of AI is growing rapidly - Microsoft GitHub Enterprise saw client interest in AI projects grow 100% in an 18-month period with actual use growing 11.5%," the report cited.

The global generative AI market size was valued at USD 43.87 billion in 2023 and is projected to grow from USD 67.18 billion in 2024 to USD 967.65 billion by 2032, exhibiting a CAGR of 39.6% during the forecast period.