IDC: Global spending on generative AI will reach $143 billion by 2027

Original source: AIGC Open Community

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IDC, a world-renowned information research and consulting organization, published a survey on its official website that by 2027, global generative AI spending will reach $143 billion, with a five-year compound annual growth rate of 73.3%.

This expenditure includes software for generative AI as well as related infrastructure hardware and IT/business services. In 2023, global enterprises invested nearly $16 billion in generative AI solutions.

IDC says the compound annual growth rate (CAGR) for 2023-2027 is 73.3%. This is more than 2 times the overall AI spending growth rate and almost 13 times the compound annual growth rate of global IT spending over the same period**.

By the end of the forecast, generative AI spending will account for 28.1% of overall AI spending, up significantly from 9.0% in 2023. As these solutions become an essential element of an enterprise's digital business, generative AI spending will continue to grow strongly beyond the build phase.

GenAI's infrastructure, which includes hardware, infrastructure as a service (IaaS), and system infrastructure software (SIS), will be the largest area of investment in the application build phase. By the end of the forecast, GenAI's services will gradually outpace infrastructure, with a five-year CAGR of 76.8%**.

The generative AI software segment will grow the fastest from 2023 to 2027 with a CAGR of 96.4% for generative AI platforms/models**, followed by generative AI application development and deployment (AD&D) and application software at 82.7%.

Litu Jyoti, Group Vice President of Global AI and Automation Market Research and Advisory Services, IDC, believes that generative AI is not a fleeting or pure hype product, but a transformative technology with far-reaching significance and business impact.

By applying generative AI ethically and responsibly, it will change the way we work, play, live, and interact with the world.

What is generative AI

Generative AI is based on deep learning and neural networks, for example, generative adversarial networks and variational autoencoders, combined with massive data pre-training, fine-tuning, through text question and answer, you can automatically generate code, pictures, text, video, audio, games, etc.

Generative AI works by learning large amounts of data, understanding its underlying patterns and structures, and then creating new, similar, but not identical, data based on that understanding. For example, given 10 papers, generative AI can write an entirely new paper based on that data.

Generative AI products represented by ChatGPT, Composer, Atlas, Stable Diffusion, and AIVA are reshaping business processes and operating models thanks to simple, easy-to-use text conversations that have a profound impact on global industries, jobs, and economies. 、Midjourney、Jukin

Mainstream industries, including finance, art and creativity, education, law, healthcare, e-commerce, transportation, and IT, have all been affected by generative AI, accelerating the application of automation.

For example, in the manufacturing industry, generative AI can be used to design new products, generate optimized design solutions through algorithms, and improve production efficiency; In the media and entertainment industry, generative AI can create new music, artwork, and even scripts to inspire creatives.

About IDC

Founded in 1964, IDC is a wholly owned subsidiary of IDG, an international data group, with offices in more than 110 countries and more than 1,300 professional data analysts.

IDC's research areas include a variety of IT products, services, and solutions, such as hardware, software, networks, mobile devices, telecommunications services, IT services, business process outsourcing, cloud computing, artificial intelligence, big data, Internet of Things, etc.