Global AI spending is forecast to double over the next four years, growing from $50.1 billion to more than $110 billion in 2024, according to the latest study by IDC.
As organisations accelerate their digital transformation efforts, IDC said the AI spending will increase at the compounded annual growth cate (CAGR) of about 20%.
AI technology will help businesses to stay agile, innovate and scale.
The AI Imperative
“Companies will adopt AI — not just because they can, but because they must,” said Ritu Jyoti at IDC.
Also read: What’s New in the Gartner Hype Cycle for Emerging Technologies, 2020
AI Spending is going to these Top Use Cases
Improving customer experience and helping employees to get better at their jobs are the two leading use cases driving AI adoption
“The companies that become ‘AI-powered’ will have the ability to synthesize information, the capacity to learn, and the capability to deliver insights at scale.”
This is reflected in the leading use cases which include automated customer service agents, sales process recommendation and automation, automated threat intelligence and prevention, and IT automation.
These four use cases will represent nearly a third of all AI spending this year, IDC noted.
Some of the fastest-growing use cases are automated human resources, IT automation, and pharmaceutical research and discovery.
The two industries with the highest AI Spending: Banking and Retail
“The Retail industry will largely focus its AI investments on improving the customer experience via chatbots and recommendation engines
Banking will include spending on fraud analysis and investigation and program advisors and recommendation systems”.
Healthcare and Discrete and Process Manufacturing are the other industries with accelerated spending on AI.
IDC forecasts Media, Federal Governments and Professional Services industries will see the fastest growth in AI spending over the 2020-2024 forecast period.
Also read: What are the key drivers for Australian enterprises’ investment in AI
Software and services to gain over two-thirds of the AI spending
- Software and services will each account for a little more than one-third of all AI spending
- The largest share of software spending will go to AI applications ($14.1 billion)
- Software will see the fastest growth in spending over the forecast period with a five-year CAGR of 22.5%
- The largest category of services spending will be IT services ($14.5 billion)
- Servers ($11.2 billion) will dominate hardware spending
