In 2024, the artificial intelligence (AI) sector is expected to experience exponential spending growth. According to the International Data Corporation (IDC), investments in AI-centric systems are projected to reach $154 billion in 2023, marking a 26.9% increase compared to the previous year. This trend clearly demonstrates the growing significance of AI across various industries and its ability to transform business operations and decision-making.
The digital era is on the rise, and financial forecasts for the year 2024 are more than optimistic. According to the recent report from Forrester, “Global Tech Market Forecast, 2023 To 2027,” global technology spending is expected to surpass the staggering threshold of $4.7 trillion in 2024, signifying significant growth compared to 2023.
The forecasts indicate that by 2027, software and IT services will account for 69% of global technology spending, with a specific focus on generative AI software, where investments are projected to reach $227 billion by 2030, achieving an impressive compound annual growth rate of 36%.
Spending on generative AI solutions (GenAI) is expected to more than double in 2024. These expenditures, which encompass GenAI software, as well as related infrastructure hardware and IT/professional services, are projected to reach $151.1 billion by 2027, with a compound annual growth rate (CAGR) of 85.9% from 2023 to 2027. These figures reveal the increasing significance of generative AI in business transformation and the creation of new market opportunities.
The impact of AI is not limited to a specific sector or region. AI adoption is a global phenomenon, with industries such as banking and retail expected to make the largest AI investments in 2023 and throughout the forecast period. Other sectors, such as professional services, discrete and process manufacturing, will closely follow suit. Together, these industries will account for over half of all spending on AI-centric systems this year..
The rapid growth in AI spending indicates that companies that delay in adopting this technology risk being left behind. The use of AI to enhance human capabilities, automate repetitive tasks, provide personalized recommendations, and make data-driven decisions quickly and accurately is becoming a strategic imperative for businesses of all sizes.
Asia, with countries like India, the Philippines, Vietnam, Indonesia, Malaysia, and China, stands out particularly, anticipating the fastest growth in technology spending in 2024. In Europe, a robust economic recovery is expected in 2024, with estimated growth at 5.1%, nearly double that of 2023. This momentum is supported by increasing digital maturity among European businesses and a more advanced adoption of cybersecurity.
Analysis of the European technology market trends reveals that software spending will experience exponential growth in 2024, accounting for the majority of European technology spending growth. However, a significant challenge is on the horizon: Europe may miss its digital technology adoption targets by 2030 if current trends persist. The EU’s chip law is a step towards controlling chip supply, but it does not ensure a significant technological advantage for Europe.
North America, on the other hand, anticipates a growth of 5.4% in 2024. Software and IT services are expected to dominate technology spending, particularly in the financial services and healthcare sectors, which will experience the fastest growth.
In the Asia-Pacific region, growth is estimated at 5.7%, with India emerging as a significant player in the export of technology services. Michael O’Grady, Senior Forecast Analyst at Forrester, highlights that Asia will benefit from the fastest economic growth, driven by strong demand for Cloud and AI solutions.
AI, with its advanced capabilities and integration into a wide range of products and services, is reshaping the global technology landscape. Companies and industries that invest wisely in AI and adapt their strategies to fully harness its potential will be well-positioned to capitalize on the innovations and improvements it brings.
2024 promises to be a pivotal year for the global technology sector, with massive investments in AI software, cloud computing, and cybersecurity, fueling unprecedented growth worldwide.
