Use of Artificial Intelligence (AI) is growing. According to International Data Corporation (IDC) forecast statistics, spending on the technology will reach $97.9 billion in 2023, which is two and a half times what it was in 2019.
David Schubmahl, IDC research director, said, “The AI market continues to grow at a steady rate in 2019 and we expect this momentum to carry forward,” adding, “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.”
Who is leading AI spending?
According to IDC: “Spending on AI systems will be led by the retail and banking industries, each of which will invest more than $5 billion in 2019. Nearly half of the retail spending will go toward automated customer service agents and expert shopping advisors & product recommendation systems. The banking industry will focus its investments on automated threat intelligence and prevention systems and fraud analysis and investigation. Other industries that will make significant investments in AI systems throughout the forecast include discrete manufacturing, process manufacturing, healthcare, and professional services. The fastest spending growth will come from the media industry and federal/central governments with five-year CAGRs of 33.7% and 33.6% respectively.”
Marianne D’Aquila, IDC research manager in the Customer Insights & Analysis department said, “”Artificial Intelligence (AI) has moved well beyond prototyping and into the phase of execution and implementation.” She also remarked, “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.”
The biggest AI use cases
The three largest use cases for AI currently are: automated customer service agents, automated threat intelligence and prevention systems, and sales process recommendation and automation. But in the future, 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). However, eight other use cases will have spending growth with five-year CAGRs greater than 30%.
Where is AI investment happening?
According to IDC, the United States will deliver more than 50% of all AI spending throughout the forecast, led by the retail and banking industries. In second place is Western Europe where banking and discrete manufacturing will show the biggest demand. China will be the third largest region for AI spending with retail, state/local government, and professional services being the leading users, and Japan is another country to watch as its AI use is predicted to have a 45.3% CAGR growth in spending on AI up to 2023.