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, and services for AI-centric systems*, will reach $154 billion in 2023, an increase of 26.9% over the amount spent in 2022.
“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.
While other industries will have much larger investments in AI, IDC is forecasting that the fastest growth in AI spending will come from the Media industry with a five-year CAGR of 30.2%. Overall, IDC believes that 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.
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).
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 and Augmentation, and Program Advisors and Recommendation Systems. These three use cases will see investment from nearly every industry and combined 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 and Prevention Systems, and Fraud Analysis and Investigation.