Spending on AI Systems Will Grow to Nearly $35.8 Billion in 2019

Worldwide spending on AI systems is forecast to reach $35.8 billion in 2019, an increase of 44.0% over the amount spent in 2018, according to IDC. With industries investing aggressively in projects that utilize AI software capabilities, IDC expects spending will more than double to $79.2 billion in 2022 with a compound annual growth rate (CAGR) of 38.0% over the 2018-2022 forecast period.

Global spending on AI systems will be led by the retail industry where companies will invest $5.9 billion this year on solutions such as automated customer service agents and expert shopping advisors & product recommendations. Banking will be the second largest industry with $5.6 billion going toward AI-enabled solutions including automated threat intelligence & prevention systems and fraud analysis & investigation systems. The industries that will experience the fastest growth in AI systems spending over the 2018-2022 forecast are federal/central government (44.3% CAGR), personal and consumer services (43.3%), and education (42.9%).

The AI use cases that will see the most investment this year are automated customer service agents ($4.5 billion worldwide), sales process recommendation and automation ($2.7 billion), and automated threat intelligence and prevention systems ($2.7 billion). Five other use cases will see spending levels greater than $2 billion in 2019: automated preventative maintenance, diagnosis and treatment systems, fraud analysis and investigation, intelligent process automation, and program advisors and recommendation systems.

Software will be the largest area of AI systems spending in 2019 with nearly $13.5 billion going toward AI applications and AI software platforms. AI applications will be the fastest growing category with a five-year CAGR of 47.3%. Hardware spending, dominated by servers, will be $12.7 billion this year as companies continue to build out the infrastructure necessary to support AI systems.

On a geographic basis, the United States will deliver nearly two thirds of all spending on AI systems in 2019, led by the retail and banking industries. Western Europe will be the second largest region in 2019, led by banking, retail, and discrete manufacturing. The strongest spending growth over the five-year forecast will be in Japan (58.9% CAGR) and Asia/Pacific (excluding Japan and China) (51.4% CAGR).