Investment In GenAI Solution To Double In 2024, Grow $151.1 billion
The International Data Corporation (IDC) has disclosed that businesses invested more than $19.4 billion worldwide in GenAI solutions in 2023.
GenAI software as well as related infrastructure hardware and IT/business services spending, is expected to more than double in 2024 and reach $151.1 billion in 2027 with a compound yearly growth rate (CAGR) of 86.1 per cent over the 2023-2027 forecast period.
According to the Group Vice President, Worldwide Research at IDC, Rick Villars, “Despite IT headwinds in 2023, businesses accelerated their exploration of GenAI to boost business transformation. In 2024, the shift to AI everywhere will enter a critical buildout phase as enterprises make major new investments to drastically reduce the time and costs associated with customer and employee productivity use cases. From there, the focus will shift to investments that boost revenue and business outcomes.”
IDC forecasts GenAI investments to follow a natural progression over the next several years as organizations transition from early experimentation to aggressive infrastructure and trained data model building to widespread adoption with extensions to the edge of all business activities.
It further noted that GenAI Infrastructure, including hardware, Infrastructure as a Service (IaaS), and system infrastructure software (SIS), will represent the largest area of investment during the build-out phase. But GenAI Platform and Application Software will gradually overtake infrastructure by the end of the forecast with a five-year CAGR of 99.6 per cent. Similarly, GenAI Services, including IT and business services, will nearly equal infrastructure spending by the end of the forecast with a five-year CAGR of 94.2 per cent.
By the end of the forecast, GenAI expected spending will account for 29.0 per cent of overall AI spending, up significantly from 10.8 per cent in 2023.
Group Vice President of worldwide Artificial Intelligence and Automation market research and advisory services at IDC, Ritu Jyoti, also stated, “As we look ahead, generative AI has catalyzed investments in traditional AI solutions. The synergy between traditional and generative AI opens up a world of possibilities across industries.”