This year, global spending on artificial intelligence (AI) will increase by 19.6 percent to 43.28 billion. This cost includes software, hardware, and services. According to a recent report by the International Data Corporation (IDC), spending in the AI sector will exceed 50 trillion by 2023.
Ritu Jyoti, Vice President of IDC's Worldwide Artificial Intelligence (AI) and Automation Research, said that AI is an important place for innovation. AI is playing an important role in making human work easier. Making the best decisions possible by facilitating planning and forecasting.
IDC forecasts that spending on AI software will be slightly lower this year among the three categories of AI. On the other hand, the cost of AI hardware and services will increase rapidly. This trend will continue in 2023. Above all, spending in the AI services segment will continue to rise over the next five years. In this segment, the combined annual growth rate or CAGR for the next five years will be 22 percent. On the other hand, AI hardware will have a CAGR of 20.5% at the same time.
In the first half of 2021, 47% of the total expenditure in the AI software category was on AI applications. Since then, 35 percent has been spent on AI system infrastructure software. In terms of growth, the CAGR on AI platforms will be a maximum of 34.6% in the next five years. AI system infrastructure software will be the slowest segment. In the next five years, the CAGR of this segment will be 14.1%.
In the first half of 2021, AI IT Services saw the highest annual growth of 20.4% in the AI Services category. The global expenditure stands at 1,840 crore dollars. Expenditure in this sector is expected to increase by 22 percent in 2022. IDC forecasts that the CAGR for the next five years in the AI business services sector will be 21.9 percent. By 2025, the cost of the AI services category will be 5,260 million.
In the first half of 2021, the market share of the AI hardware category has increased by 0.5 percent. IDC predicts that the market share of this segment will stand at 5 percent in 2022. In this segment, the annual growth will be 24.9 percent. In the first half of last year, AI storage achieved stronger growth than AI servers. However, a different picture will be seen in 2022; AI server growth will be 26.1% and AI storage growth will be 19.7%. In the AI hardware category, 80 percent of the total expenditure will go to the AI server.
Researcher Peter Ratten said the cost of AI hardware is the lowest among the three AI segments.
Jennifer Hamel, research manager at Analytics and Intelligent Automation Services, said AI was a key driver in investing in the IT sector. Customer demand has increased for integrating AI solutions into the organization.