The global spending on artificial intelligence (AI) is projected to reach $632 billion by 2028, according to a recent report by the International Data Corporation (IDC). This significant growth is fueled by the rapid incorporation of AI, including generative AI (GenAI), across various products and services.
With a forecasted compound annual growth rate (CAGR) of 29% between 2024 and 2028, the US is expected to lead AI investments with spending reaching $336 billion by 2028. Following closely behind are Western Europe, China, and Asia/Pacific regions. This expansion is driven by continuous innovations in AI technologies, facilitating the seamless integration of AI into everyday operations.
GenAI investments are anticipated to outpace the overall AI market, exhibiting a remarkable five-year CAGR of 59.2%. By the end of the forecast period, GenAI spending is projected to reach $202 billion, constituting 32% of the total AI expenditure.
In terms of technology spending categories, software is expected to dominate the market, accounting for more than half of the total AI expenditure. Hardware, including servers, storage, and Infrastructure as a Service (IaaS), will follow as the second-largest spending category. The report also highlights the accelerated growth of IT and business services, with a CAGR of 24.3%, compared to a 33.9% CAGR for AI software.
Financial services are poised to be the leading industry in AI investments over the coming years, while business and personal services, as well as transportation and leisure sectors, are forecasted to experience the fastest AI spending growth.
In conclusion, the global AI market is set to witness substantial growth, driven by advancements in AI technologies and increased adoption across various industries. This growth trajectory underscores the transformative potential of AI in revolutionizing business processes and driving innovation on a global scale.
