APEJ AI spending will reach $46 billion by 2026

According to the latest report from International Data Corp. Global Artificial Intelligence Spending Guide.

AI solutions have become an essential part of process improvement and business decision-making, helping organizations maintain market viability. IDC forecasts a compound annual growth rate (CAGR) of 23.7% for 2021-2026.

“Pre-trained natural language and computer vision models have been a major contributor to the 1st wave of adoptions. It’s time for more organizations to leverage their own data asset and start managing the “data to intelligence” life cycle. This will become one of the differentiating capabilities of businesses to compete in the digital age,” says Jessie Danqing Cai, Associate Research Director, Artificial Intelligence, IDC Asia/ Peaceful.

Reliance on online services and their use, as well as customer support enabled by AI, professional services have improved in the rankings. The banking industry will continue to invest in AI solutions as market risks and threats increase; AI-enabled applications that enhance threat intelligence and fraud analysis will help reduce risk. Due to the current economic volatility and increasing resource scarcity, discrete manufacturing will be the next big industry to invest in AI solutions to maintain production quality and minimize errors. State/local and federal/central government is the second largest spender on AI solutions, focusing on public safety and emergency response, defense, terrorism, investigations, and intelligence systems governmental.

“Companies that have already invested and plan to increase their investment in AI solutions will get the most out of it to outperform the market,” says Vinayaka Venkatesh, Principal Market Analyst, IT Spending Guides, IDC Asia/Pacific. “Addressing skills gaps will be one of the important steps towards harnessing the power of AI solutions,” he added.

By 2026, spending on the top 5 use cases will have doubled from $8.3 billion to $18.5 billion. With the current industrial digitization, the adoption of AI in all sectors has become necessary for competitive advantage. For example, augmented customer service agents reduce the time and resources needed to resolve customer issues. Smart business innovation and automation optimize and streamline complex business tasks, enabling better decisions by incorporating more data into the decision-making process. Sales process recommendations and improvements will help smooth the sales process and IT optimization to automate time-consuming software maintenance tasks. Augmented threat intelligence and prevention systems help identify threats to the digital business setup and take preventative action to avoid critical data threats.

Hardware will be the leading technology, accounting for more than 54.2% of AI spending; the largest areas of investment will be servers, accounting for over 86% of total spend, while the rest will go to storage. Software is the second leading technology with 29% of AI spending. 52% of total AI spending on software goes to AI applications and artificial intelligence platforms. The rest of AI spending goes to services technology, 77% of total AI spending in services goes to IT services, and the rest is under business services.

China is the leading country in AI spending in Asia/Pacific*, which is expected to reach nearly $26.6 billion by 2026. Business demand for AI solutions has increased significantly. One of the factors driving the rise of AI-based industries is digital transformation and policies.

Australia is the second leading country in AI spending, with $5.7 billion expected by 2026. The use of AI solutions in businesses is growing as they are critical to business decision-making and improving data processes.

India is the second leading and fastest growing country with a projected CAGR of 33.5% in AI spending of $3.4 billion. Digital transformation, government initiatives, customer experience, and cloud adoption are some of the factors influencing the adoption of AI solutions by businesses.

South Korea will be the next biggest spender on AI solutions, which is expected to reach $2.9 billion by 2026. The South Korean government is constantly helping companies adopt AI technologies by establishing AI centers. AI and education and training programs to develop AI skills.