SINGAPORE, October 4, 2022 — IDC recently published the IDC Worldwide Artificial Intelligence Spending Guide. The data shows that the global artificial intelligence (AI) IT investment totaled US$92.95 billion in 2021 and is expected to grow to US$301.43 billion by 2026, and the compound annual growth rate (CAGR ) was about 26.5%. As for the Chinese market, IDC predicts that China’s AI investment is expected to reach $26.69 billion in 2026, accounting for about 8.9% of global investment and ranking second among other countries in the world. In recent years, more and more companies have jumped into the Digiintelligence era and started adopting digital transformation (DX) and intelligent upgrades, which has led to greater demand for AI. Driven by policies, technologies and markets, the AI-enabled industry is becoming a mainstream development trend.
In the next five years, the hardware market will be the largest primary market in China’s AI market, accounting for more than half of the total AI investment. IDC predicts that China’s IT investment in the AI hardware market will top $15 billion in 2026, roughly the size of the United States’ AI hardware market. With the gradual improvement of AI infrastructure construction, hardware growth will gradually slow down, with the five-year CAGR remaining at around 16.5%. The server market as the main part of the hardware market will account for over 80% in the forecast period of five years.
At the same time, the services market will grow faster, with the five-year CAGR expected to be around 29.6%. The total investment in the services market is expected to exceed US$4 billion in 2026, almost four times the investment in 2021, with significant market growth. The AI services market, as defined by IDC, is mainly dominated by the IT services segment. IDC forecasts that IT services will lead the services market growth at a CAGR of 31.0% over five years.
From the perspective of AI software, China’s AI software market share will increase year by year under the joint promotion of the gradual development of technologies, including machine learning (ML) and computer vision, China’s political environment and gradually diversified customer needs More than 25 % of AI market-related IT investments will go to software in 2026. In terms of growth rate, AI Software Market will become the fastest growing primary market at five-year CAGR of about 30.4% during the five-year forecast period. From the perspective of the technology segment, AI platforms will absorb more than 70% of software-related spending in the next five years and become a major driver of software market growth with a five-year CAGR of 33.1%.
IDC forecasts that user AI-related spending in the top four endpoint industries — professional services, government, finance, and telecom — will continue to lead over the five-year forecast period, collectively exceeding 60% of total spending in China’s AI market . More specifically, local governments. AI spending will lead AI investment growth at a five-year CAGR of 24.3% and is expected to surpass $2.51 billion in 2026; and the central government is expected to have a five-year CAGR of 19.4%, reaching $1.37 billion in 2026. The market size of the financial sector, represented by banks, will continue to grow over the next few years, with the five-year CAGR expected to exceed 21.0%. In addition, the construction, discrete manufacturing and healthcare industries have also achieved high growth rates, jointly driving the development and application of China’s AI. In the future, AI will find application in various industries and expand both in breadth and depth. It will continue to effectively support industries to achieve intelligent marketing and decision-making. At the same time, the deep integration of AI into the industry will stimulate more potential and foster more business opportunities.
Based on research conducted in the aforementioned industries, the IDC Worldwide Artificial Intelligence Spending Guide covers 29 typical key use cases for AI, updated to reflect market dynamics. Three use cases, namely advanced customer service agents, public safety and emergency response, and intelligent business innovation and automation, will continue to dominate. The three combined will account for more than 30% over the five-year forecast period. Currently, there are mature applications of AI in various industry use cases. It completes independent judgment and behavioral learning through technologies such as deep learning, computer vision and image recognition to solve a variety of complex tasks and lay an important foundation for the intelligent transformation of the industry. In use cases, customer service representatives are evolving rapidly, with cases in finance, retail, and other industries. Public security and emergency response are mainly involved in state security, and biometrics are used for fingerprint and face recognition. In the future, with the increasing development of AI chips, 5G and other technologies, AI will also be better implemented in more areas.
About IDC Output Guides
IDC’s Spending Guides provide an in-depth look at key technology markets from a regional, industry vertical, use case, buyer and technology perspective. The spend guides are provided via a pivot table format or a custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
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International Data Corporation (IDC) is the world’s leading provider of market intelligence, consulting services and events for the information technology, telecommunications and consumer technology markets. With more than 1,300 analysts worldwide, IDC provides global, regional and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insights help IT professionals, executives and the investment community make fact-based technology decisions and achieve their key business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading technical media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDCAP and LinkedIn. Subscribe to the IDC blog for industry news and insights.