Spending on Cognitive and AI Systems Will Reach $12.5 Billion in 2017

Spending on Cognitive and AI Systems Will Reach $12.5 Billion in 2017

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According to IDC's Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide worldwide revenues for cognitive and artificial intelligence (AI) systems will reach $12.5 billion in 2017, an increase of 59.3% over 2016. Global spending on cognitive and AI solutions will continue to see significant corporate investment over the next several years, achieving a compound annual growth rate (CAGR) of 54.4% through 2020 when revenues will be more than $46 billion.

From a technology perspective, the largest area of spending in 2017 ($4.5 billion) will be cognitive applications, which includes cognitively-enabled process and industry applications that automatically learn, discover, and make recommendations or predictions. Cognitive/AI software platforms, which provide the tools and technologies to analyze, organize, access, and provide advisory services based on a range of structured and unstructured information, will see investments of nearly $2.5 billion this year. Spending on cognitive-related IT and business services will be more than $3.5 billion while dedicated server and storage purchase will total $1.9 billion. Each of these areas will experience strong growth throughout the forecast, led by cognitive applications with a five-year CAGR of 69.6%.

The cognitive/AI use cases that will see the greatest levels of investment this year are: Quality Management Investigation and Recommendation Systems; Diagnosis and Treatment Systems; Automated Customer Service Agents; Automated Threat Intelligence and Prevention Systems; and Fraud Analysis and Investigation. Combined, these five use cases will deliver nearly half of all cognitive/AI systems spending in 2017. By the end of the forecast, slower spending on Diagnosis and Treatment Systems will drop it to the number 5 position. The use cases that will experience the fastest spending growth over the 2015-2020 forecast period are Public Safety and Emergency Response (85.5% CAGR) and Pharmaceutical Research and Discovery (74.2% CAGR).

On a geographic basis, the United States is by far the largest market for cognitive/AI spending with 2017 revenues totaling nearly $9.7 billion. Europe, the Middle East and Africa (EMEA) is currently the second largest region, but strong spending growth from Asia/Pacific (including a 107% CAGR in Japan) will move it ahead of EMEA by 2020.

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