Software and Services

AI spending to increase nearly 20% this year

17 March 2022
The global AI software market forecast by application. Source: IDC

Global revenues for artificial intelligence (AI) — software, hardware and services — are forecast to grow 19.6% in 2022 reaching $432.8 billion, according to research from International Data Corp (IDC).

The market will break the $500 billion mark in 2023.

"AI has emerged as the next major wave of innovation,” said Ritu Jyoti, group VP of worldwide AI and automation research at IDC. “AI solutions are currently focused on business process problems and range from human augmentation to process improvement to planning and forecasting, empowering superior decisioning and outcomes. Advancements in language, voice and vision technologies, and multi-modal AI solutions are revolutionizing human efficiencies.”

AI software will see the share of spending decline slightly in 2022 as hardware and services grow more quickly and will continue to grow throughout 2023. AI services are forecast to deliver the fastest spending growth over the next five years with a compound annual growth rate (CAGR) of 22%, IDC said.

In the software segment, AI applications accounted for 47% of spending in the first half of 2021 followed by AI system infrastructure software with about a 35% share. AI applications will be the fastest growing segment in the software category over the next several years.

The forecast for AI services is expected to reach $52.6 billion in the next several years. Growth from this category will include IT services that will reach $18.4 billion followed by AI business services with a CAGR of 21.9% in the next few years.

"AI remains a key driver of IT investment, which in turn boosts spending on related services to ensure sustainable adoption at scale," said Jennifer Hamel, research manager of analytics and intelligent automation services. "Client demand for expertise in developing production-grade AI solutions drives IT services expansion, while the need to establish the right organization, governance, business process, and talent strategies spurs spending on business services."

To contact the author of this article, email PBrown@globalspec.com


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