Spending on AI-Centric Systems to Hit $154B in 2023
IDC predicts that the fastest growing area for AI spending will be the media industry
NEEDHAM, Mass.—A new forecast from the International Data Corporation (IDC) Worldwide Artificial Intelligence Spending Guide highlights the growing importance of artificial intelligence technologies, particularly in the media industry.
The IDC is forecasting that global spending on 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.
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), the study found.
"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. "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."
One indicator of how broad spending on AI-centric systems will be over the next five years is that only one of the 36 AI use cases identified by IDC will have a CAGR of less than 24% over the forecast period, the study noted.
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, the researchers reported.
The two industries that will deliver the largest AI investments in 2023 and throughout the forecast are Banking and Retail. The next largest industry for AI spending will be Professional Services followed by Discrete and Process Manufacturing. Together, these five industries will account for more than half of all spending on AI-centric systems this year.
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George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.