This is an increase of 54.2 percent over the amount spent in 2017 and IDC believes that industries are aggressively investing in projects that use cognitive/AI software capabilities,
IDC forecasts cognitive and AI spending will grow to $52.2 billion in 2021 and achieve a compound annual growth rate (CAGR) of 46.2 percent between 2016-2021.
IDC Cognitive/Artificial Intelligence Systems research director David Schubmehl said that interest and awareness of AI is at a fever pitch.
“Every industry and every organisation should be evaluating AI to see how it will affect their business processes and go-to-market efficiencies", said David Schubmehl.
"IDC has estimated that by 2019, 40 percent of digital transformation initiatives will use AI services and by 2021, 75 percent of enterprise applications will use AI. From predictions, recommendations, and advice to automated customer service agents and intelligent process automation, AI is changing the face of how we interact with computer systems."
Retail will overtake banking in 2018 to become the industry leader regarding cognitive/AI spending. Retail firms will invest $3.4 billion this year on a range of AI use cases, including automated customer service agents, expert shopping advisors and product recommendations, and merchandising for omnichannel operations.
Much of the $3.3 billion spent by the banking industry will go toward automated threat intelligence and prevention systems, fraud analysis and investigation, and program advisors and recommendation systems.
Discrete manufacturing will be the third largest industry for AI spending with $2 billion going toward a range of use cases including automated preventative maintenance and quality management investigation and recommendation systems. The fourth largest industry, healthcare providers, will allocate most of its $1.7 billion investment to diagnosis and treatment systems.
A little more than half of all cognitive/AI spending throughout the forecast will go toward cognitive software. The most significant software category is cognitive applications, which includes cognitively-enabled process and industrial applications that automatically learn, discover, and make recommendations or predictions. The other software category is cognitive platforms, which facilitate the development of intelligent, advisory, and cognitively enabled applications.
Industries will invest in IT services to help with the development and implementation of their cognitive/AI systems and business services such as consulting and horizontal business process outsourcing related to these systems. The smallest category of technology spending will be the hardware (servers and storage) needed to support the operations.
The US will deliver more than three-quarters of all spending on cognitive/AI systems in 2018, led by the retail and banking industries. Western Europe will be the second largest region in 2018, driven by retail, discrete manufacturing and banking.
The most substantial spending growth over the five-year forecast will be in Japan (73.5 percent) and Asia Pacific (excluding Japan and China) (72.9 percent). China will see strong spending growth throughout the forecast period(68.2 percent).
