Generative Artificial Intelligence (AI) in Virtual Reality Market Report 2025

This Generative Artificial Intelligence (AI) in Virtual Reality market report delivers an in-depth analysis of the market’s key characteristics, including size, growth potential, and segmentation. It provides a detailed breakdown of the market across major regions and leading countries, highlighting historical data and future growth projections. The report also examines the competitive landscape, market share insights, emerging trends, and strategic developments shaping the market.

The generative artificial intelligence (AI) in virtual reality market size has grown exponentially in recent years. It will grow from $3.85 billion in 2024 to $5.12 billion in 2025 at a compound annual growth rate (CAGR) of 33%. The growth in the historic period can be attributed to the development of VR hardware, growth of the gaming industry, growth of social VR platforms, expansion of VR in education, and supportive government policies.

The generative artificial intelligence (AI) in virtual reality market size is expected to see exponential growth in the next few years. It will grow to $15.88 billion in 2029 at a compound annual growth rate (CAGR) of 32.7%. The growth in the forecast period can be attributed to increasing demand for personalized experiences, increasing computational power, increased awareness of VR technologies, increased research and development, and increasing demand for interactive entertainment. Major trends in the forecast period include developments in variational auto-encoders (VAES), emergence of neuromorphic and quantum computing, enhanced immersive experiences, advanced AI-generated NPCS, and AI-enhanced real-time world building.

The rising demand for immersive experiences is expected to drive the growth of generative artificial intelligence (AI) in the virtual reality (VR) market. Immersive experiences involve engaging environments that merge physical and virtual worlds, often through VR, augmented reality (AR), and mixed reality (MR) technologies, to create a sense of presence and realism for users. This demand is growing due to advancements in VR and AR technologies that enable more realistic interactions, as well as consumers' increasing desire for personalized, memorable experiences in entertainment and education. Generative AI enhances these immersive experiences by creating dynamic and interactive environments and content in real-time, allowing for highly personalized and adaptive interactions based on user input. For example, in November 2022, the Ministry of Industry and Information Technology of China announced plans to expand the country’s VR industry production to 350 billion yuan (US$48 billion) by 2026, marking a sixfold increase from the previous year. Additionally, a guideline issued by MIIT and other organizations set a national sales target of 25 million VR devices by 2026. Therefore, the growing demand for immersive experiences is fueling the expansion of generative AI in the VR market.

Major companies in the generative artificial intelligence (AI) for virtual reality market are developing advanced solutions, including generative AI-powered No-Code authoring omni-platforms, to simplify the creation of immersive and interactive virtual environments without extensive programming knowledge. These platforms use generative AI to enable users to create, design, and customize virtual environments or applications without writing code. For example, in June 2024, ARuVR, a UK-based digital multimedia platform developer, launched the ARuVR GenAI Suite. This new platform facilitates the creation of augmented reality (AR), virtual reality (VR), and mixed reality (MR) content by providing tools for generating digital 3D models from 2D videos, crafting immersive 360° images, and designing detailed 2D visuals. The suite also includes a text-to-speech function that allows users to add customizable voiceovers with various voices and speech speeds. Integrated with ARuVR's No-Code authoring omni-platform, the GenAI Suite makes it easier to create interactive training and spatial learning experiences.

In March 2024, Cornerstone OnDemand, Inc., a US-based software company, acquired Talespin Reality Labs for an undisclosed amount. This acquisition is intended to enhance Cornerstone's learning and talent development solutions by integrating Talespin's immersive learning technologies, which use extended reality (XR) to create contextually relevant training environments. Talespin Reality Labs, also a US-based company, leverages virtual reality (VR) and generative AI to assist individuals in developing workplace skills.

Major companies operating in the generative artificial intelligence (AI) in virtual reality market are Google LLC, Microsoft Corporation, Meta Platforms Inc., Siemens AG, International Business Machines Corporation, Qualcomm Incorporated, NVIDIA Corporation, Adobe Inc., Rockwell Automation Inc., Autodesk Inc., Roblox Corporation, Unity Technologies Inc., DeepMind Technologies Limited, Magic Leap Inc., Epic Games Inc., Oculus VR LLC, Cerebras Systems Inc., HTC Corporation, Matterport Inc., Synthesia Ltd., Strivr Labs Inc., Groove Jones Inc., Qualium Systems Inc., Cubix LLC.

North America was the largest region in the generative artificial intelligence (AI) in virtual reality market in 2024. The regions covered in the generative artificial intelligence (AI) in virtual reality market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the generative artificial intelligence (AI) in virtual reality market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Generative artificial intelligence (AI) in virtual reality (VR) involves using AI models to create new content such as environments, characters, objects, and interactions within a VR space. This technology enables VR to dynamically generate or adapt content based on user input, preferences, or real-time interactions, enhancing the immersion and personalization of the virtual experience.

The primary components of generative AI in VR include both software and hardware. Software in this domain consists of applications and programs that employ AI to create, enhance, or alter virtual environments and experiences. This technology is utilized across various sectors, including entertainment and gaming, healthcare, education and training, retail and e-commerce, and manufacturing and design, serving a broad spectrum of users, from enterprises to individuals.

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The generative artificial intelligence (AI) in virtual reality consists of revenues earned by entities by providing services such as personalized content creation, realistic audio, dynamic storytelling, and visual enhancements, behavioral simulation, and real-time adaptation. The market value includes the value of related goods sold by the service provider or included within the service offering. The generative artificial intelligence (AI) in virtual reality market also includes sales of products including AI-assisted VR design tools, game development tools, intelligent NPCs, and interactive voice systems. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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