Published on October 16, 2023, 3:09 pm

TLDR: Investment in generative AI solutions is expected to reach $143 billion by 2027, with a predicted compound annual growth rate of 73.3% from 2023 to 2027. Although there may be constraints initially, such as workload shifts and resource allocation challenges, generative AI spending is projected to represent 28.1% of overall AI spending by the end of the forecast period. This highlights the transformative capabilities and far-reaching implications of generative AI for businesses worldwide.

It’s no surprise that AI is becoming increasingly prevalent across various industries. Companies worldwide are recognizing the potential of incorporating generative AI models into their business plans to streamline operations and improve efficiency. According to a report by the International Data Corporation (IDC), spending on generative AI solutions, including software, related infrastructure hardware, and IT/business services required for implementation, is expected to reach a staggering $143 billion by 2027.

This forecast reflects a significant increase in investment in generative AI. In fact, the IDC predicts that enterprises will invest nearly $16 billion globally in these solutions by 2023 alone. This represents a compound annual growth rate of 73.3% over the forecast period from 2023 to 2027.

Ritu Jyoti, the group vice president at IDC, emphasizes that generative AI is more than just a passing trend or hype; it has transformative capabilities and far-reaching implications for businesses. The growth rate of investments in generative AI surpasses that of overall AI spending by more than double and stands at 13 times greater than the CAGR for worldwide IT spending over the same timeframe.

As organizations transition from early experimentation to aggressive build-out and widespread adoption of generative AI, IDC expects investment patterns to follow a natural progression over the next few years. However, Rick Villars, group vice president at IDC, notes that spending on GenAI may face some constraints until 2025 due to workload shifts, resource allocation challenges in areas such as silicon manufacturing, networking infrastructure, facility management, model confidence, and availability of skilled personnel.

Despite these initial constraints, IDC projects substantial growth in generative AI spending. By the end of the forecast period, they anticipate that generative AI spending will account for approximately 28.1% of overall AI spending—an impressive increase from its current share of only 9% as of 2023.

It’s clear that generative AI is poised to revolutionize industries worldwide. As technology continues to evolve, businesses will undoubtedly recognize the benefits of harnessing its power.

Share.

Comments are closed.