Worldwide spending on artificial intelligence systems to approach USD 98 billion in 2023, IDC finds

Anca Alexe 06/09/2019 | 08:59

Global spending on artificial intelligence (AI) systems is expected to maintain its strong growth trajectory as businesses continue to invest in projects that use the capabilities of AI software and platforms. Spending on AI systems is expected to reach USD 97.9 billion in 2023, more than two and one half times the USD 37.5 billion that will be spent in 2019, according to the recently updated International Data Corporation (IDC) Worldwide Artificial Intelligence Systems Spending Guide. The compound annual growth rate (CAGR) for the 2018-2023 forecast period will be 28.4 percent.

“The AI market continues to grow at a steady rate in 2019 and we expect this momentum to carry forward. The use of artificial intelligence and machine learning (ML) is occurring in a wide range of solutions and applications from ERP and manufacturing software to content management, collaboration, and user productivity. Artificial intelligence and machine learning are top of mind for most organizations today, and IDC expects that AI will be the disrupting influence changing entire industries over the next decade,” said David Schubmehl, research director, Cognitive/Artificial Intelligence Systems at IDC. 

Spending on AI systems will be led by the retail and banking industries, each of which will invest more than USD 5 billion in 2019. Nearly half of retail spending will go toward automated customer service agents and expert shopping advisors & product recommendation systems.

The banking industry will focus its investments on automated threat intelligence and prevention systems and fraud analysis and investigation. Other industries that will make significant investments in AI systems throughout the forecast include discrete manufacturing, process manufacturing, healthcare, and professional services.

The fastest spending growth will come from the media industry and federal/central governments with five-year CAGRs of 33.7 percent and 33.6 percent respectively.

“Artificial Intelligence (AI) has moved well beyond prototyping and into the phase of execution and implementation. Strategic decision makers across all industries are now grappling with the question of how to effectively proceed with their AI journey. Some have been more successful than others, as evidenced by banking, retail, manufacturing, healthcare, and professional services firms making up more than half of the AI spend. Despite the learning curve, IDC sees higher than average five-year annual compounded growth in government, media, telecommunications, and personal and consumer services,” said Marianne D’Aquila, research manager, IDC Customer Insights & Analysis. 

The three largest AI use cases are automated customer service agents, automated threat intelligence and prevention systems, and sales process recommendation and automation, which together will deliver 25 percent of all spending in 2019.

The next six types of use cases will provide an additional 35 percent of overall spending this year. The use cases that will see the fastest spending growth over the 2018-2023 forecast period are automated human resources (43.3 percent CAGR) and pharmaceutical research and development (36.7 percent CAGR).

The largest share of technology spending in 2019 will go toward services, primarily IT services, as firms seek outside expertise to design and implement their AI projects. Hardware spending will be somewhat larger than software spending in 2019 as firms build out their AI infrastructure, but purchases of AI software and AI software platforms will overtake hardware by the end of the forecast period with software spending seeing a 36.7 percent CAGR.

On a geographic basis, the United States will deliver more than 50 percent of all AI spending throughout the forecast, led by the retail and banking industries. Western Europe will be the second largest geographic region, led by banking and discrete manufacturing. China will be the third largest region for AI spending with retail, state/local government, and professional services vying for the top position. The strongest spending growth over the five-year forecast will be in Japan (45.3 percent CAGR) and China (44.9 percent CAGR).

The Worldwide Artificial Intelligence Systems Spending Guide provides data for 26 use cases across 19 industries in nine regions and 32 countries. 


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Anca Alexe | 19/12/2022 | 18:45

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