Global spend on AI set to grow by almost 20 per cent this year 'as the next major wave of innovation'

IDC analysts tell partners AI spend is predicted to surpass $500bn by 2023

Worldwide revenues for the AI market are forecast to grow 19.6 per cent year-over-year in 2022 to $432.8bn, according to analysis by IDC.

'The next major wave of innovation'

The AI market - which includes AI software, services and hardware - is also expected to break the $500bn mark by 2023.

For partners investing in artifical intelligence, it's services that IDC are forecasting to deliver the fastest spending growth over the next five years with a compound annual growth rate (CAGR) of 22 per cent.

Meanwhile, the CAGR for AI hardware will be 20.5 per cent, while AI software will see its share of spending decline slightly in 2022 as spending for hardware and services grows more quickly: a trend which IDC says will continue into 2023.

"AI has emerged as the next major wave of innovation," said group vice president, worldwide AI and automation research at the IDC Ritu Jyoti.

"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."

He added: "Advancements in language, voice and vision technologies, and multi-modal AI solutions are revolutionising human efficiencies. Overall, AI plus human ingenuity is the differentiator for enterprises to scale and thrive in the era of compressed digital transformation."

AI market segments

In the AI services category, AI IT services enjoyed 20.4 per cent year-over-year growth in the first half of 2021 with worldwide spending reaching $18.4bn, and the researcher expects overall AI services spending to reach $52.6bn by 2025.

"Of all the spending in the various AI market segments, AI hardware is by far the smallest," said research VP president, performance intensive computing Peter Rutten.

"What this should tell organisations is that nickel-and-diming purpose-built hardware for AI is absolutely counterproductive, especially given the fast-growing compute demand from increasing AI model sizes and complexities."