A new forecast from the International Data Corporation (IDC) Worldwide Artificial Intelligence Spending Guide shows that global spending on artificial intelligence (AI), including software, hardware, & services for AI-centric systems, will reach US $154 billion in 2023. This is an increase of 26.9% over the amount spent in 2022.
The ongoing incorporation of AI into a wide range of products will result in a compound annual growth rate (CAGR) of 27.0% over the 2022-2026 forecast with spending on AI-centric systems expected to surpass $300 billion in 2026, the report added.
“Companies that are slow to adopt AI will be left behind – large and small. AI is best used in these companies to augment human abilities, automate repetitive tasks, provide personalized recommendations, and make data-driven decisions with speed and accuracy,” said Mike Glennon, senior market research analyst with IDC’s Customer Insights & Analysis team, in an announcement. “Suppliers of AI technologies need to know which are the largest and fastest-growing opportunities, but without data they become just another opinion. IDC’s AI Spending Guide provides the foundation for marketing strategy through its comprehensive coverage of AI opportunities and gives a robust basis for a market focus that ties with companies’ capabilities.”
Three of the leading AI use cases in terms of spending focus on sales and customer service functions: Augmented Customer Service Agents, Sales Process Recommendation & Augmentation, & Program Advisors and Recommendation Systems. These three use cases will see investment from nearly every industry, IDC said, adding that this combination will account for more than a quarter of all AI spending in 2023. The other use cases that will see the largest spending this year support a more diverse set of tasks: IT Optimization, Augmented Threat Intelligence & Prevention Systems, and Fraud Analysis & Investigation.
The two industries that will deliver the largest AI investments in 2023 are Banking & Retail. The next largest industry for AI spending will be Professional Services followed by Discrete & Process Manufacturing. Together, these five industries will account for more than half of all spending on AI-centric systems this year.
The fastest growth in AI spending will come from the Media industry with a five-year CAGR of 30.2%. However, much like use case spending, only two of the industries in the Spending Guide will have CAGRs of less than 25%.
“AI technology will continue to bring empowering effects to users and industry sectors. With the support of pre-trained large models, multi-modal, and other technologies, AI capabilities will be applied to the whole process of production on a large scale, promoting the technology from the concept to large-scale application of landing, said Xueqing Zhang, senior market analyst with IDC’s China Enterprise Research Department. “In the future, both government-level urban issues and life issues that are closely related to everyone will enjoy the dividends brought by AI technology and eventually usher in AI for all.”
From a geographic perspective, the United States will be the largest market for AI-centric systems, accounting for more than 50% of all AI spending worldwide throughout the forecast. Western Europe will account for more than 20% of worldwide IT spending accompanied by a five-year CAGR of 30.0%, one of the fastest growth rates over the forecast period. The People’s Republic of China will be the third-largest AI market with the slowest growth rate (20.6% CAGR).
