IDC forecasts generative AI spending to hit $26 billion by 2027
The Asia/Pacific region is on the point of a transformative journey as the latest data from market intelligence firm International Data Corp. (IDC) unveils a surge in generative AI (GenAI) adoption.
IDC’s projections indicate that spending in this sector is set to soar to $26 billion by 2027, with a compound annual growth rate (CAGR) of 95.4% from 2022 to 2027.
GenAI, a branch of computer science enabling computers to create new content using existing material, is gaining traction across various industries. IDC predicts that this technology will revolutionize the next wave of AI innovation and technological advancement.
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“We forecast that this investment in GenAI will reach its zenith within the next two years, followed by a period of stabilization,” Deepika Giri, head of Research, Big Data & AI, IDC APJ, said in a media release. “China is projected to maintain its position as the dominant market for GenAI, while Japan and India are set to become the most rapidly expanding markets in the forthcoming years.”
GenAI technology progression
IDC’s Worldwide AI and Generative AI Spending Guide measures 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 38 use cases across 27 industries in nine regions and 32 countries.
The progression of IT spending in GenAI technology has three stages: Foundation Build, Broad Adoption, and Unified AI Services. These phases include infrastructure enhancement, widespread adoption of AI platforms, and rapid integration for competitive advantage.
“GenAI isn’t a fleeting trend,” said Vinayaka Venkatesh, Senior Market Analyst, IT Spending Guides, Customer Insights & Analysis, IDC Asia/Pacific. “Its capacity to generate entirely new content, across various mediums, such as images, videos, code, and marketing materials, promises substantial efficiency gains and paves the way for innovative creative opportunities, granting a competitive advantage.”
Industry use cases
He noted that a significant portion of organizations have either already adopted Generative AI or are in the initial stages of experimenting with models.
The financial services sector is projected to hit $4.3 billion by 2027 with a CAGR of 96.7%. GenAI is revolutionizing operations by automating tasks like fraud detection and document creation while offering personalized services.
In the software and information services industry, GenAI is streamlining marketing, data analytics, and software development processes, boosting productivity and efficiency.
Governments are leveraging GenAI to enhance service delivery and stimulate job growth through education and training initiatives. Retailers are also turning to GenAI to personalize experiences, automate tasks, and enhance customer engagement.
