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The still-young history of generative AI has been littered with grand predictions about its being a transformative technology.

But in the past few months, skepticism has crept in. Generative AI darling Nvidia has bumped along, unable to reattain the record high it hit in June. The New York Times profiled Goldman Sachs’ resident AI skeptic, head of research Jim Covello.

Enter consulting giant Bain & Company and a big, new forecast: “The market for AI-related hardware and software is expected to grow between 40% and 55% annually, reaching between $780 billion and $990 billion by 2027.”

The chairman of Bain’s Global Technology & Cloud Services practice and an author of the report, David Crawford, told Yahoo Finance in an interview that companies of all sizes are throwing money at AI, not just the hyperscalers.

“We were astonished to see the rate at which, for example, the number of companies spending over $100 million in their annual IT budget alone on AI and with large enterprises, that's doubled,” Crawford said.

Critically, he added, it’s across the board, with smaller enterprises doubling their spend.

“You can pick any kind of spend or IT budget threshold and they're almost uniformly increasing their spend,” said Crawford.

Bain’s forecast, coupled with Micron’s increased forecast of strong demand for its AI-powering high-bandwidth memory chips, has given the generative AI trade a little zhuzh this week.

“I don't think that we are anywhere near even the midpoint in terms of AI spending cycle,” BlackRock’s Kate Moore told Yahoo Finance.

Most investors who are bulls on the broader AI theme seem to agree despite some of the AI trade’s growth numbers coming back to earth after stratospheric initial gains. And yet, there’s been a pattern this year of AI plays running up, then pulling back as traders question valuations and monetization potential. Then they run up again and the cycle starts anew.

Moore likened the current period to building out infrastructure in a new city.

“You can't expect a city to flourish if it doesn't have roads and sewers and public transportation,” she said. “And I'd say the same thing. I think these hyperscalers know what they're doing. They already feel like the spend is a small amount of their potential total return.”

The motion sickness-inducing up-and-down in the stocks may be set to continue, however, as Bain’s report also points out there could be other speed bumps ahead. The authors write that software companies’ revenue growth is slowing as they’re under pressure to demonstrate greater, generative AI-driven efficiency. Meanwhile, the demand for AI could spark a semiconductor shortage.