Beancounters at IDC have added up some numbers and divided by their shoe size and concluded that GenAI software and related hardware and services are expected to see a massive surge in demand in the next few years.
In a new report, IDC predicts that worldwide spending on GenAI solutions will reach $16 billion in 2023 and grow to $143 billion in 2027, with a CAGR of 73.3 per cent. This is much faster than overall AI and IT spending.
IDC’s group vice president of worldwide artificial intelligence and automation market research and advisory services, Ritu Jyoti, said that GenAI is not just a hype but a game-changing technology that can transform industries and society.
“GenAI is poised to reshape industries, changing how we work, play, and interact with the world. GenAI is poised to reshape industries with ethical and responsible implementation, changing how we work, play, and interact with the world.”
The report outlines the stages of GenAI adoption, from initial experimentation to aggressive deployment to widespread use across business activities and edge devices.
IDC warns that challenges and risks could slow down or limit the growth of GenAI spending, such as workload shifts and resource allocation, pricing, privacy and security issues, model confidence, AI skills gap, and possible consumer backlash or regulatory interventions.
By 2027, IDC expects that GenAI spending will account for more than a quarter of total AI spending, up from less than a tenth in 2023. The report suggests that GenAI spending will remain robust even after the build-out phase, as organisations will continue to leverage GenAI for innovation and differentiation.
