Bankers spend less on AI compared to retailers. Source: Shutterstock

Bankers spend less on AI compared to retailers. Source: Shutterstock

APAC businesses to spend $5.5 billion on AI this year says IDC

EVERYONE is talking about artificial intelligence (AI) these days. In fact, some of the largest vendors in the technology industry have created platform services to help make AI even more accessible.

As a result, businesses in every industry are working on building AI-powered solutions.

According to a new report by IDC, spending on AI will surge to US$5.5 billion this year, an increase of almost 80 percent over spends made last year.

As industries invest aggressively in projects that utilize AI software capabilities, IDC expects spending on AI systems will increase to US$15.06 billion in 2022 with a compound annual growth rate (CAGR) of 50 percent over the 2018-2022 forecast period.

IDC believes that regional spending on AI systems will be led by the retail industry with retailers spending big bucks on solutions such as merchandising, expert shopping advisory and recommendations, automated customer service agents, and supply and logistics.

Banking will be trailing behind retail when it comes to investments in AI-enabled solutions, wherein use cases such as fraud analysis and investigation, program advisors and recommendation, as well as automated customer agents will total a large chunk of all AI-related investments.

The industries that will experience the fastest growth in AI systems spending over the 2018-2022 forecast are healthcare providers (60.2 percent CAGR) and process manufacturing (60.1 percent CAGR).

According to IDC, automated customer service agents, sales process recommendation and automation, and intelligent process automation will be the top three use cases that interest most for AI buyers.

The fastest growth will be seen in pharmaceutical research and discovery and digital twin/advanced digital simulation.

“Artificial Intelligence is changing the world as we speak. In fact, APAC is quickly driving the growth in adoption of artificial intelligence because of its fertile and nascent digital ecosystem,” said IDC Senior Market Analyst Swati Chaturvedi.

As a developing region, IDC believes that the APAC will invest in infrastructural aspects that can support AI development.

Hardware, therefore, will be the largest area of AI systems spending in 2019 with nearly US$7 billion going towards server and storage.

Software, on the other hand, will be the fastest growing category for regional AI spending with a five-year CAGR of 80 percent.

Companies are also expected to invest in IT services to help with the development and implementation of their AI systems and in business services such as consulting and horizontal business process outsourcing related to these systems.

By the end of the forecast, IDC believes that AI-related services spending will be slightly less than software spending.

What’s most interesting is that geographically speaking, China is expected to deliver nearly 66 percent of the spending forecasted for the APAC region, led by the retail, professional services, and government industries.

However, outside China, the rest of the APAC region is expected to adopt AI-enables solutions most quickly in the banking, retail, and manufacturing industries.

Overall, IDC’s forecast highlights that companies are willing and able to spend on AI solutions — and consumers must expect to be delighted by exciting offerings in the coming months.