AI Apps on Mobile: A $2 Billion Industry Fueled by ChatGPT

The mobile application market for artificial intelligence has experienced a remarkable surge, reaching a noteworthy valuation of $2 billion, primarily due to OpenAI's ChatGPT setting the pace. Since its launch as a mobile application in May 2023, ChatGPT has generated an impressive $529 million, substantially outperforming its competitors, as noted in a recent report by Appfigures. The AI app expenditure is expected to nearly quadruple in 2024, attaining $1.4 billion, with an accelerated growth projected for the year's last quarter. The bulk of this booming market stems from U.S. consumers, who have been responsible for approximately half of the AI app sales thus far.

Dominance of Assistant Apps

Assistant applications, especially chatbots like ChatGPT and the globally impactful DeepSeek, have dominated AI app categories according to Appfigures' findings. Over the previous two years, chatbots have encompassed eight of the ten most downloaded AI apps, as well as all top-earning positions. From July onwards, ChatGPT alone has consistently surpassed the combined revenue of other leading assistant apps available on both Apple Inc.'s iPhone App Store and Alphabet Inc.'s Android Play Store.

The Competitive Landscape

The emergence of DeepSeek introduces a potential challenge to ChatGPT’s expanding influence. OpenAI CEO Sam Altman, however, perceives this competition positively, describing it as "invigorating to have a new competitor." Industry figures, including leaders from Nvidia Corp., predict that DeepSeek could drive increased overall interest and participation in the AI arena, prompting OpenAI to expedite the rollout of its forthcoming products.

User Demographics and Market Growth

Key insights from the Appfigures report reveal that over half of ChatGPT’s mobile users fall within the 18 to 24 age range, with male users comprising the majority of the AI app demographic. In 2024, revenue across diverse AI app categories witnessed a phenomenal average growth of 862% across 12 analyzed market segments.

Monetization Challenges

Despite the substantial investments—amounting to hundreds of billions of dollars—in AI infrastructure by tech giants like OpenAI, Microsoft Corp., and Meta Platforms Inc., the monetization of these expenses remains a complex issue. Nonetheless, there is a promising trend as mobile users exhibit a growing propensity to spend on innovative AI software, bolstering efforts in this revolutionary tech domain.