AI global turnover: Global spending on Artificial Intelligence, including enabled applications, infrastructure and related business services, is set to double by 2028 when IDC estimates it will reach a total turnover of $632 billion. According to the analyst firm, the rapid integration of AI, especially generative AI, in a wide range of products will result in an average annual growth of 29% in the period 2024-2028. The integration between man and machine, between needs and new, increasingly automated services, is constantly growing.

Although GenAI has captured the world’s attention in the last 18 months, spending on GenAI solutions will be lower than the combined total of all other AI applications, such as machine learning, deep learning, automatic speech recognition and natural language processing. However, the rapid growth of GenAI spending will allow the category to outpace the overall AI market with a five-year CAGR (average annual growth) of 59.2%. By 2028, IDC expects GenAI spending to reach $202 billion, representing 32% of total AI spending.

Software Leads Spending Category, Then Applications and Platforms

Software will be the largest spending category, accounting for over half of the AI market. Two-thirds of the spending will go to AI-powered applications and AI platforms, with the remainder going to new AI application development and AI systems and infrastructure software. AI hardware spending, including servers, storage, and infrastructure as a Service (IaaS), will be the second-largest technology spending category. IT and business services will grow slightly faster than hardware, with a CAGR of 24.3%. In comparison, AI software will see a five-year CAGR of 33.9%.

The industry is expected to spend the most on AI solutions over the 2024-2028 forecast period for financial services. Led by banking, the financial services industry will account for more than 20% of all AI spending. The following largest industries for AI spending are software and information services and retail. These three industries will account for approximately 45% of all AI spending over the next five years. The industries that will see the fastest growth in AI spending are Business and Personal Services (32.8% CAGR) and Transportation and Leisure (31.7% CAGR). Additionally, 17 of the 27 industries in the Spending Guide are expected to have five-year CAGRs greater than 30%.

AI, global spending +29% per year in the period 2024-2028

AI Infrastructure Provisioning will be the primary use case for AI solutions across most forecasts. However, with the slowest growth rate expected among the use cases included in the Spending Guide (14.7% CAGR) due to early investment by service providers, IDC predicts that several other use cases will meet or exceed it by 2028. These use cases include Augmented Fraud Analysis and Investigation and AI-enabled Customer Service and Self Service. Augmented Claims Processing (35.8% CAGR) and Digital Commerce (33.2% CAGR) are the use cases that will see the fastest spending growth. Thirty of the 42 AI use cases identified in the Spending Guide are expected to have five-year CAGRs more significant than 30%.

AI spending in the U.S. will reach $336 billion in 2028, making it the largest geographic region for AI investment and accounting for more than half of all AI spending during the forecast period. GenAI spending in the U.S. is expected to reach $108 billion in 2028. Western Europe will be the second largest region for AI spending, followed by China and Asia/Pacific (excluding Japan and China).