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Worldwide Spending on AI-Centric Systems Will Pass $300 Billion by 2026, According to IDC

AI is becoming a crucial component of all systems, leading to dramatic improvements in software and hardware capabilities

A new forecast from the International Data Corporation (IDC) Worldwide Artificial Intelligence Spending Guide shows that global spending on artificial intelligence (AI), including software, hardware, and services for AI-centric systems*, will reach nearly $118 billion in 2022 and surpass $300 billion in 2026. The ongoing incorporation of AI into a wide range of products will drive a compound annual growth rate (CAGR) of 26.5% over the 2022-2026 forecast. This is more than four times greater than the five-year CAGR of 6.3% for worldwide IT spending over the same period.

The past two difficult years in business accelerated the use of AI in systems, and organizations are now more willing to take advantage of the efficiency benefits and enhanced capabilities that AI systems offer. AI systems can support people-oriented tasks and improve their capabilities through technologies such as Conversational AI and Image Processing, used to interact with clients and potential clients in a way that these people are prepared to accept.

The high and consistent growth seen in the use of AI in all industries demonstrates its importance to future business. "AI is not the future, it is now," said Mike Glennon, senior market research analyst with IDC's Customer Insights & Analysis team. "Most IT vendors have adopted AI solutions to supplement their products and are enhancing their products to make AI crucial to their success. Those vendors that are only now considering AI are at a considerable disadvantage to IT vendors that have AI-based products already in production, and AI is becoming crucial to the capabilities of many products."

Banking and Retail are the two industries that will deliver the largest AI investments over the forecast period. Together, the two industries will account for roughly one quarter of all AI spending worldwide. Professional services will be the next largest industry with more than 10% share of spending, followed by discrete and process manufacturing. Professional services will also be one of the industries with the fastest growth in AI spending (28.7% CAGR), trailing only the Media industry (29.8% CAGR).

Among the 30 AI use cases identified by IDC, Augmented Customer Service Agents will see the most spending throughout the forecast, reaching $35.9 billion on 2026. While it is the largest use case in only two industries (Retail and Telecommunications), Augmented Customer Service Agents are an investment area for every industry. Other leading AI use cases include Sales Process Recommendation and Augmentation, Fraud Analysis and Investigation, and Program Advisors and Recommendation Systems. By 2026, these four use cases will represent more than 38% of all AI spending worldwide.

A graphic illustrating the spending share of the top 5 artificial use cases in 2022 is available by viewing this press release on IDC.com.

"Three of the leading use cases are customer and sales focused, showing that adopters of AI are using it to grow their business significantly with a strong customer and sales focus at a time when the economy struggles," Glennon noted. "The use of AI in business is moving away from simple cost saving to being a strong component of business growth, showing the increasing maturity of AI as an IT solution across a wide range of systems."

The United States will be the largest geographic market for AI systems, accounting for more than 50% of all AI spending worldwide throughout the forecast. Retail and Banking will the leading industries for AI investments in the U.S. Western Europe will account for more than 20% of worldwide IT spending and will deliver the fastest spending growth with a five-year CAGR of 30.0%. The People's Republic of China will be the third largest AI market with one of the slowest growth rates (21.1% CAGR).

The IDC Worldwide Artificial Intelligence Spending Guide (V2 2022) sizes spending for technologies that analyze, organize, access, and provide advisory services based on a range of unstructured information. The Spending Guide quantifies the AI opportunity by providing data for 30 use cases across 19 industries in nine regions and 32 countries. Data is also available for the related hardware, software, and services categories.

* Taxonomy Note: The IDC Worldwide Artificial Intelligence Spending Guide uses a precise definition of what constitutes an AI Application in which the application must have an AI component that is crucial to the application – without this AI component the application will not function. This distinction enables the Spending Guide to focus on those software applications that are strongly AI Centric. In comparison, the IDC Worldwide Semiannual Artificial Intelligence Tracker uses a broad definition of AI Applications that includes both AI-centric applications and applications where the AI component is non-centric, or not fundamental, to the application. In other words, the application will function without the inclusion of the AI component. This enables the inclusion of vendors that have incorporated AI capabilities into their software, but the applications are not exclusively used for AI functions only.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

Click here to learn about IDC's full suite of data products and how you can leverage them to grow your business.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

A new forecast from IDC shows global spending on artificial intelligence (AI), including software, hardware, and services for AI-centric systems, will surpass $300 billion in 2026.

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