Analysts Expect Global Spending on AI to Double in 2024
- By John K. Waters
Demand for artificial intelligence (AI) in the enterprise will accelerate over the next few years, analysts at International Data Corporation (IDC) predict, with global spending surpassing $110 billion in 2024--double the $50.1 billion spent in 2020.
The increased investment is being driven by organizations engaged in digital transformations who see AI tech as an essential competitive differentiator, explained Ritu Jyoti, program vice president in IDC's Artificial Intelligence group.
"Companies will adopt AI, not just because they can, but because they must," Jyoti said in a statement. "AI is the technology that will help businesses to be agile, innovate, and scale. The companies that become 'AI powered' will have the ability to synthesize information (using AI to convert data into information and then into knowledge), the capacity to learn (using AI to understand relationships between knowledge and apply the learning to business problems), and the capability to deliver insights at scale (using AI to support decisions and automation)."
Enterprise AI adoption is being driven primarily by companies' concerns about delivering a better customer experience and their need to help their employees get better at their jobs, IDC found. The leading use cases for AI--automated customer service agents, sales process recommendation and automation, automated threat intelligence and prevention, and IT automation--support this conclusion. IDC says spending on these four use cases combined will represent nearly a third of all AI spending this year. Some of the fastest growing use cases the analysts cite are automated human resources, IT automation, and pharmaceutical research and discovery.
IDC published its analysts' conclusions in its Worldwide Artificial Intelligence Spending Guide, which examines the "AI systems opportunity" from a use case, technology, industry, and geography perspective.
Two industries in particular are likely to spend the most on AI solutions over the next few years, IDC predicts: Retail and Banking. The Retail sector will invest in improving the customer experience via chatbots and recommendation engines; the Banking sector will invest in fraud analysis and investigation, as well as program advisors and recommendation systems. The industries that will see the fastest growth in AI spending over the 2020-2024 forecast are Media, Federal/Central Government, and Professional Services.
COVID-19 caused a slowdown in AI investments across the Transportation industry, as well as the Personal and Consumer Services industry, which includes leisure and hospitality businesses, said Andrea Minonne, senior research analyst in IDC's Customer Insights and Analysis group.
"These industries will be cautious with their AI investments in 2020, as their focus will be on cost containment and revenue generation rather than innovation or digital experiences," she said in a statement. "On the other hand, AI has played a role in helping societies deal with large-scale disruptions caused by quarantines and lockdowns. Some European governments have partnered with AI start-ups to deploy AI solutions to monitor the outcomes of their social distancing rules and assess if the public was complying with rules. Also, hospitals across Europe are using AI to speed up COVID-19 diagnosis and testing, to provide automated remote consultations, and to optimize capacity at hospitals."
The conclusions in this IDC spending guide were adjusted for the impact of COVID-19, said Stacey Soohoo, research manager in IDC's Customer Insights and Analysis group.
"In the short term, the pandemic caused supply chain disruptions and store closures with continued impact expected to linger into 2021 and the outyears," she said. "For the most impacted industries, this has caused some delays in AI deployments. Elsewhere, enterprises have seen a silver lining in the current situation: an opportunity to become more resilient and agile in the long run. Artificial intelligence continues to be a key technology in the road to recovery for many enterprises and adopting artificial intelligence will help many to rebuild or enhance future revenue streams and operations."
John K. Waters is the editor in chief of a number of Converge360.com sites, with a focus on high-end development, AI and future tech. He's been writing about cutting-edge technologies and culture of Silicon Valley for more than two decades, and he's written more than a dozen books. He also co-scripted the documentary film Silicon Valley: A 100 Year Renaissance, which aired on PBS. He can be reached at firstname.lastname@example.org.