By 2027, global investment on GenAI software and solutions is expected to reach $143 billion

A new analysis projects that global investment on generative AI (GenAI) software and solutions will total $143 billion in 2027, growing at a 73.3 percent compound annual growth rate.

This is over 13 times faster than the CAGR for global IT expenditure over the same time period and more than twice as fast as the pace of increase for total AI investment.

According to the International Data Corporation’s (IDC) prediction, businesses would spend close to $16 billion on GenAI solutions globally in 2023.

This expenditure covers hardware and IT/business services as well as GenAI software-related infrastructure.

“Generative AI is not only a passing fad or hype. Ritu Jyoti, group vice president of international AI and automation market research and consulting services, calls it a disruptive technology with broad ramifications and economic effect.

GenAI is prepared to disrupt industries and alter how we work, play, and engage with the outside world with ethical and responsible implementation, she said.

IDC anticipates that as organizations move from early testing to aggressive build out with specific use cases to general adoption across business operations over the next years, investments in GenAI will follow a natural evolution.

“The rate of GenAI spending will be somewhat constrained through 2025 due to turbulence in workload shifts and resource allocation, not just in silicon but also in networking, facilities, model confidence, and AI skills,” said Rick Villars, group vice president, global research at IDC.

investment on GenAI will make up 28.1% of total AI investment by the end of the projected period, up dramatically from 9% in 2023. “GenAI infrastructure, including hardware, Infrastructure as a Service (IaaS), and system infrastructure software (SIS), will represent the largest area of investment during the build out phase,” the research said.