A new forecast from IDC says that enterprise spending on generative AI from now through 2027 will be 13 times greater than the growth rate for overall worldwide IT spending on IT. Credit: Shutterstock Enterprise spending on generative AI services, software and infrastructure will skyrocket over the next four years, jumping from $16 billion this year to $143 billion in 2027, according to technology research and advisory firm IDC. Spending on generative AI over the four year period to 2027 is expected to reach a compound annual growth rate (CAGR) of 73.3%, a figure which IDC says is more than twice the rate of growth in overall AI spending and almost 13 times greater than the CAGR for worldwide spending on IT over the same period. IDC has forecast that by the end of 2027, spending on generative AI will account for 28.1% of overall AI spending, with generative AI infrastructure — which includes hardware, infrastructure as a service (IaaS), and system infrastructure software (SIS) — representing the largest area of investment during the so-called buildout phase of this period. However, despite this initial growth spurt, IDC believes that spending on generative AI services will gradually overtake infrastructure by the end of the forecast period, with a five-year CAGR of 76.8%. Furthermore, the analyst house predicts that generative AI software segments will see the fastest growth during the 2023-2027 forecast period, with platforms and models delivering a CAGR of 96.4%, compared to the 82.7% CAGR it expects to see in the application development and deployment (AD&D) and applications software segment. Companies are currently experimenting with generative AI, but are expected to start aggressively building out targeted business use cases for widespread adoption, including an extension of AI applications to edge networks, IDC said. “Generative AI is more than a fleeting trend or mere hype. It is a transformative technology with far-reaching implications and business impact,” said Ritu Jyoti, group vice president for AI at IDC, in a news release for the new report. “With ethical and responsible implementation, GenAI is poised to reshape industries, changing the way we work, play, and interact with the world.” IDC said it will be publishing more detailed forecasts, including the impact on end devices, network services, and software applications that are enhanced through incorporation of generative AI, in the coming months. Related content news AR/VR headset sales decline is temporary: IDC A steep year-on-year drop in global shipments in Q1 was the result of market in transition. By Paul Barker Jun 18, 2024 4 mins Headsets Technology Industry opinion Apple's cautious AI strategy is absolutely right It is via simple, friendly and optional functions that the great masses will be introduced to — and actually use — AI tools. By Marcus Jerräng Jun 18, 2024 5 mins Apple Generative AI news Varjo wants you to create photorealistic VR ‘scenes’ with your phone The Finnish VR headset firm said its Teleport device will lower the barrier for 3D content creation with an app that lets users create a virtual environment — without any training or special equipment. By Matthew Finnegan Jun 18, 2024 4 mins Augmented Reality Virtual Reality Vendors and Providers news analysis When it comes to AI, Apple is opening up for intelligence Apple is becoming increasingly open as its research teams cook up Apple Intelligence. By Jonny Evans Jun 18, 2024 4 mins Apple Developer Generative AI Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe