Spending on cognitive and artificial intelligence (AI) systems is expected to reach $57.6 billion in 2021 – with a compound annual growth rate (CAGR) of 50.1 percent.
IDC said spending on cognitive and AI systems will be $12 billion in 2017, an increase of 59.1 percent over 2016.
The use case for cognitive and artificial intelligence solutions are industry specific, such as diagnosis and treatment in healthcare, and in others they are common across multiple industries such as automated customer service agents.
The retail industry is going to invest $1.74 billion in cognitive and artificial intelligence in 2017.
Banking industry will be spending $1.72 billion in cognitive and artificial intelligence solutions this year.
The discrete manufacturing, healthcare, and process manufacturing industries are also forecast to spend more than $1 billion each this year.
These five industries combined investments will represent nearly 55 percent of worldwide spending on cognitive and artificial intelligence.
In addition to spending the most on cognitive and AI systems, retail will deliver the fastest spending growth with a 2016-2021 CAGR of 58.8 percent. Six other industries will see CAGRs greater than 50 percent over the forecast period.
Automated customer service agents will be spending $1.5 billion and diagnostic and treatment systems will spend $1.1 billion. These will remain the largest use cases in terms of spending throughout the forecast.
Expert shopping advisors & product recommendations (96.6 percent CAGR), public safety and emergency response (96.2 percent CAGR), and intelligent processing automation (69.9 percent CAGR) are the fastest spending growth over the 2016-2021.
“This release of the cognitive/AI spending guide illustrates the growth that is happening across the spectrum of enterprise software, services, and hardware to adopt and use intelligent applications based on artificial intelligence,” said David Schubmehl, research director, Cognitive/Artificial Intelligence Systems at IDC.
Roughly half of all spending on cognitive and AI technology will go to software, including cognitive applications and cognitive platforms. Though software spending growth is expected to slow somewhat after 2019, services spending will experience steady growth throughout the forecast, achieving a five-year CAGR of 53.7 percent. Hardware will be the smallest and slowest growing area of spending, despite a robust CAGR of 40.4 percent.
United States will deliver nearly 80 percent of global spending on cognitive and AI systems in 2017 and nearly 75 percent in 2021.
Europe, the Middle East and Africa (EMEA) is the second largest region.
Strong spending growth from Asia Pacific (including a 73.6 percent CAGR in Japan) will move it ahead of EMEA by 2021.