IDC has announced that enterprises will spend $143 billion on generative AI (GenAI) solutions in 2027. It found that enterprises worldwide are investing $16 billion in 2023 and each year this figure will rise by 73.3% on average.
The analyst company said that GenAI is not a fleeting trend or hype, in fact, it said that the technology will have far-reaching implications and business impact. It went on to say that the technology will change how we work, play, and interact with the world.
When looking at a breakdown of GenAI spending, the GenAI service spending is expected to overtake infrastructure by the end of the forecast. IDC also said that GenAI software segments will see the fastest growth over the period with a compound annual growth (CAGR) of 96.4% followed by GenAI application development and deployment and applications software with an 82.7% CAGR.
Commenting on the findings, Rick Villars, group vice president, Worldwide Research at IDC, said:
‘The rate of GenAI spending will be somewhat constrained through 2025 due to turbulence in workload shifts and resource allocation, not just in silicon but also in networking, facilities, model confidence, and AI skills. Other factors that might constrain the expected rate of investment include pricing, concerns about privacy and security, and the possibility of an existential crisis that triggers major consumer antipathy or government interventions.’
Given the predicted rise in spending predicted by IDC, it could mean that we see generative AI become very widespread across products. We have already seen tech companies integrate AI into their search products and lots of AI apps pop up as more large language models come onto the scene.
Companies like Google and GitHub are offering AI-assisted coding software and GenAI is also finding its way into office tools to help people refine their work. It’ll be interesting to see what other companies, not traditionally considered tech companies, will do with the technology over the years.
Source: IDC
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