GenAI software and solutions to reach $143 billion globally by 2027
- ByStartupStory | October 22, 2023
Global expenditure on generative AI (GenAI) software and solutions is projected to reach $143 billion by 2027, with a notable compound annual growth rate (CAGR) of 73.3%, as reported in a new study. This growth rate significantly surpasses the expansion in overall AI spending and is nearly 13 times greater than the CAGR for global IT spending during the same period.
International Data Corporation (IDC) forecasts that enterprises worldwide will allocate approximately $16 billion to GenAI solutions in 2023. This investment encompasses GenAI software, alongside the associated infrastructure hardware and IT/business services.
GenAI is recognized as a transformative technology with substantial implications and business influence, not merely a fleeting trend or hype. With responsible and ethical implementation, GenAI has the potential to reshape industries, altering how we engage with the world and conduct our work and leisure activities.
IDC anticipates a gradual evolution in GenAI investments over the coming years, moving from initial experimentation to aggressive implementation, targeting specific use cases, and eventually becoming widely integrated into various business operations.
The pace of GenAI spending may face constraints until 2025 due to shifts in workloads and resource allocation challenges, affecting not only silicon but also networking, facilities, model confidence, and AI skills.
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By the end of the projection period, GenAI spending is expected to comprise 28.1% of the total AI spending, marking a significant increase from the 9% projected for 2023. The report highlights that GenAI infrastructure, which includes hardware, Infrastructure as a Service (IaaS), and system infrastructure software (SIS), will be the most significant area of investment during the implementation phase.
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