APAC spends $6.2b on AI systems this year, recording a 54pc YoY growth
INVESTING in artificial intelligence (AI) systems is the smart thing to do for most companies, and in the Asia Pacific (APAC), businesses understand this.
According to IDC, spending on AI systems in the APAC is set to hit the US$6.2 billion mark this year, indicating a 54 percent growth from 2018 figures.
Given the optimism around the technology, the analyst firm forecasted that spending on AI systems will increase to US$21.4 billion by 2023, averaging a compound annual growth rate (CAGR) of 39.6 percent between 2018 and 2023.
The enormous figures, however, are not surprising. Businesses in the APAC have time and time again indicated an interest in AI and its various applications — from boosting operational efficiency to improving customer experiences.
In order to leverage any kind of AI solution, experts believe that companies must have their data platforms in order.
The significant year on year (YoY) growth in spending on AI systems in the APAC therefore also serves as evidence that companies have finally climbed the digital maturity and are now ready to implement the technology.
IDC’s access to the market also means that the firm is able to drill down into the industry-level spending in AI systems. According to the team, APAC spending on AI systems is led by the banking industry with a 10.7 percent share of the total, followed by retail with a 10.2 percent share.
Further, the firm’s analysts revealed that industries that will experience the fastest growth in AI systems spending over the forecast period (2018-23) are telecommunications (CAGR 56.6 percent), and process manufacturing (CAGR 47.1 percent) respectively.
The AI use cases that have significant investment this year include automated customer service agents (US$758.4 million) followed by sales process recommendation and automation (US$529.1 million).
The fastest growth, on the other hand, according to forecasts, will be seen in pharmaceutical research and discovery, and digital twin/advanced digital simulation.
Of course, China is the largest spender in AI systems in the APAC, accounting for more than 71 percent of APAC spending on AI systems.
“China is the primary source of AI investment in Asia, as it remains a priority very much for government and state organizations as well as a small number of aggressive digital native enterprises like Tencent, Baidu and Alibaba,” said IDC APAC AVP Christopher Marshall.
“Elsewhere in Asia, although experimentation is common, enterprise deployment of AI is still relatively rare, and much remains to be done if APAC companies hope to compete with major players in China and the US.”
In 2020, more activity in the AI systems space is expected in the APAC, ensuring the region keeps pace with the rest of the world — including the US.
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