Artificial Intelligence

IDC predicts spending on AI systems to reach $97.9 billion In 2023

IDC has updated the Worldwide Artificial Intelligence Systems Spending Guide predicting that spending on AI systems will maintain its strong growth trajectory as businesses continue to invest in projects utilizing the capabilities of AI software and platforms. The Spending Guide, which quantifies the AI opportunity by providing data for 26 use cases across 19 industries in nine regions and 32 countries, predicts that spending on AI systems will reach $97.9 billion in 2023. The compound annual growth rate (CAGR) for the 2018-2023 forecast period will be 28.4% based on the predicted spending in 2019 of $37.5 billion.

“The AI market continues to grow at a steady rate in 2019 and we expect this momentum to carry forward,” said David Schubmehl, research director, Cognitive/Artificial Intelligence Systems at IDC. “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.”

Retail and banking industries are expected to lead the spending on AI systems, investing more than $5 billion in 2019 each. AI systems in retail spending will go toward automated customer service agents and expert shopping advisors & product recommendation systems, whereas banking is investing in automated threat intelligence and prevention systems, fraud analysis and investigation. Discrete manufacturing, process manufacturing, healthcare, and professional services are all spending money on artificial intelligence systems and platforms.

“Artificial Intelligence (AI) has moved well beyond prototyping and into the phase of execution and implementation,” said Marianne D’Aquila, research manager, IDC Customer Insights & Analysis. “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.”

There are three use cases said to be driving the spending in AI systems: automated customer service agents, automated threat intelligence and prevention systems, and sales process recommendation and automation. These use cases will deliver 25% of all spending in 2019. The use cases that will see the fastest spending growth over the 2018-2023 forecast period are automated human resources (43.3% CAGR) and pharmaceutical research and development (36.7% CAGR).

The United States will deliver more than 50% of all AI spending throughout the forecast, led by the retail and banking industries. The second largest geographical region will be Western Europe, led by banking and discrete manufacturing. China will be the third largest region for AI spending with retail, state/local government, and professional services leading the spending.

The report is available to download here.