APEJ AI Spending to Top $46B by 2026

Article By : International Data Corp.

APEJ spending on AI will rise from $20.6 billion in 2022 to around $46.6 billion in 2026, according to IDC.

Asia/Pacific (excluding Japan) spending on artificial intelligence (AI) systems—including hardware, software, and services—will rise from $20.6 billion in 2022 to around $46.6 billion in 2026, according to International Data Corp.’s (IDC) latest Worldwide Artificial Intelligence Spending Guide.

AI solutions have become an essential part of process improvement and business decision-making, assisting organizations in keeping up with market viability. IDC forecasts a compound annual growth rate (CAGR) of 23.7 percent for 2021-2026.

“Pre-trained natural language and computer vision models have contributed largely to the 1st wave of adoptions. It’s time for more organizations to tap into their own data asset and start managing the ‘data to intelligence’ lifecycle. This will become one of the differentiating capabilities for companies to compete in the digital-first era,” says Jessie Danqing Cai, Associate Research Director, Artificial Intelligence, IDC Asia/Pacific.

Dependence on online services and their usage, as well as customer assistance enabled by AI, Professional Services has improved in the rankings. Banking will keep investing in AI solutions as market risks and threats increase; AI-enabled apps that boost threat intelligence and fraud analysis will help to reduce the risk. As a result of the current economic volatility and rising resource scarcity, discrete manufacturing will be the next major industry to invest in AI solutions to maintain production quality and minimize errors. State/Local and Federal/central government is the next biggest spender on AI solutions, focusing on public safety and emergency response, Defense, Terrorism, Investigation, and Government Intelligence Systems.

“Companies that have already invested in and plan to increase investment in AI solutions will make the best use of them to outperform the market,” says Vinayaka Venkatesh, Senior Market Analyst, IT Spending Guides, IDC Asia/Pacific. “Resolving skill gaps will be one of the important steps toward leveraging the power of AI solutions,” he added.

By 2026, spending on the top 5 use cases will have doubled, rising from $8.3 billion to $18.5 billion. With the present industrial digitalization, AI adoption across industries has become necessary for a competitive advantage. For example, augmented customer service agents reduce the time and resources required to resolve customer issues. Smart business innovation and automation optimize and streamline complex business tasks, enabling better decisions by incorporating more data into the decision-making process. Sales process recommendations and enhancements will aid in the smooth flow of the sales process and IT optimization to automate time-consuming software maintenance tasks. Augmented threat intelligence and prevention systems help to identify threats for the digital business setup and take preventive measures to avoid critical data threats.

Hardware will be the leading technology, accounting for more than 54.2% of AI spending; the most significant investment areas will be servers, accounting for more than 86% of total expenditure, while the rest will go toward storage. Software is the second leading technology with 29% of AI spending. 52% of total AI spending in software goes towards AI Applications and Artificial Intelligent Platforms. The rest of the AI spending goes to services technology, 77% of the total AI spending in services goes toward IT Services, and the rest is under Business Services.

China is the leading country in AI spending in Asia/Pacific*, expected to reach nearly $26.6 billion by 2026. Enterprises’ demand for AI solutions has increased drastically. Digital transformation and Policies is one of the factors for the rise in the AI-enabled industries.

Australia is the second leading country in AI spending, with $5.7 billion expected by 2026. The use of AI solutions in enterprises is increasing as it is critical in business decision-making and data process improvement.

India is the next leading and fastest growing country, with an expected CAGR of 33.5% in AI spending of $3.4 billion. Digital transformation, government initiatives, customer experience, and cloud adoption are some of the factors that influence enterprise adoption of AI solutions.

South Korea will be the next spender on AI solutions, which is expected to reach $2.9 billion by 2026. The South Korean government is constantly assisting businesses in adopting AI technologies by establishing AI Hubs and education and training programs for developing AI skills.


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