IDC Expects GenAI Spending to double in These Areas in 2024IDC Expects GenAI Spending to double in These Areas in 2024

The fast rise of GenAI shows no signs of abating, with firms transitioning from first experiments to actively investing in establishing solid infrastructure and developing well-trained data models.

According to research by IDC, enterprises invested approximately $19.4 billion globally in generative artificial intelligence (genAI) technologies in 2023; that amount is anticipated to double this year.

Businesses are investing money in artificial intelligence (AI) software, hardware, and information technology (IT) and business services. For the period between 2023 and 2027, it is anticipated that they would spend around $151.1 billion, which is an annual growth rate of 85.9% on average.

IDC’s Rick Villars noted that notwithstanding the difficulties encountered by the IT industry in 2023, organisations expedited their investigation of genAI as a catalyst for their overarching business transformation.

Anticipated is a critical period between now and 2024 during which businesses will make substantial investments in AI across the board in order to substantially reduce the time and costs associated with employee and customer productivity. The emphasis will then transition to investments with the objective of augmenting revenue and enhancing overall business outcomes.

IDC thinks that spending in genAI will change naturally over the next few years. After the initial tests, companies will move on to building strong infrastructure and well-trained data models. Eventually, they will use genAI in all areas of their business, even taking it to the edge.

The exponential growth of generative AI was compared by Forrester Group to the introduction of social media, smartphones, and the internet. Until 2030, they anticipated that expenditures on GenAI would increase by 36% annually. Furthermore, Forrester projects that GenAI will account for approximately 55% of the total AI software market.

According to IDC, by 2027, investment in genAI is expected to account for 29% of global AI expenditure, a significant rise from 10.8% in 2023.

IDC predicts that expenditures on GenAI will remain strong even after the implementation phase concludes, as these solutions will become an integral component of the digital control platforms of businesses.

Each year by 2030, a projected $42 billion will be spent on genAI for general uses like as research, writing, and summarising tools. According to a recent Forrester survey, companies are predicted to spend $79 billion annually on specialised apps targeted at improving automation and efficiency, notably in fields such as security, healthcare, and content marketing.

According to Forrester, AI-driven software solutions such as GitHub Copilot and Replit, for example, are simplifying software development and making it more accessible to both engineers and citizen developers.

Over half of all expenditure on general apps will go into chatbots and communication platforms, which are projected to dramatically improve both consumer and staff experiences. While companies across industries will boost their technological investment on AI implementation and the use of solutions based on AI over this time, the IT industry has the opportunity to undertake a faster and more wide move towards genAI.

DC suggests that all companies will be in a rush to launch products and services improved by AI and to support customers in integrating AI into their operations. For many, AI is expected to surpass cloud technology as the primary driver of innovation.

According to research by Insight Enterprises, about two-thirds of business leaders say that their companies have given their employees safe and private creative AI tools. In addition, about the same number of leaders say that their teams have been told to find ways that these tools could be used in their organisations.

According to IDC, the key emphasis of investment in GenAI during the build-out phase will be its infrastructure, which includes hardware, Infrastructure as a Service (IaaS), and system infrastructure software (SIS). However, by the end of 2027, it is predicted that GenAI Platform and Application Software would have outpaced infrastructure investments, with a five-year compound annual growth rate (CAGR) of 99.1%.

Similarly, with a five-year CAGR of 94.6%, GenAI Services, which comprise both IT and business services, are expected to almost equal infrastructure investment by the conclusion of this time.

IDC’s group vice president for Worldwide Artificial Intelligence and Automation services, Ritu Jyoti, believes that investments in traditional AI solutions have been stimulated by generative AI. The combination of conventional and generative artificial intelligence unlocks a vast array of prospects across diverse sectors. Anticipating the development of artificial intelligence, combining the use of generative creativity with traditional AI in an integrated manner will result in AI systems that are more versatile and responsive to evolving challenges, all the while fostering ground-breaking innovation.

Leave a Reply

Your email address will not be published. Required fields are marked *