China’s AI market will exceed $26.7 billion by 2026, according to IDC

Singapore, October 4, 2022 – IDC recently released IDC A guide to artificial intelligence spending around the world. Data show that the total global IT investment in artificial intelligence (AI) in 2021 amounted to $92.95 billion, and is expected to rise to $301.43 billion in 2026, and the compound annual growth rate (CAGR) was about 26.5%. As for the China market, IDC expects China’s investment in AI to reach $26.69 billion in 2026, accounting for about 8.9% of global investment, ranking second in the world among other countries. In recent years, more and more companies have entered the era of Digintelligence and begun to deploy digital transformation (DX) and intelligent upgrade, which has increased the demand for artificial intelligence. Driven by policies, technologies, and markets, industries supporting AI are becoming a dominant development trend.

technological dimension

Over the next five years, the hardware market will be the largest primary market in China’s AI market, accounting for more than half of total AI investment. IDC expects that China’s IT investment in the AI ​​device market will exceed 15 billion US dollars in 2026, which is close to the size of the AI ​​device market in the United States. With the gradual improvement of AI infrastructure construction, hardware growth will gradually slow down, with the five-year compound annual growth rate remaining at around 16.5%. The server market, as the main segment of the hardware market, will account for more than 80% over the projected five-year period.

At the same time, the services market will expand at a faster pace, with a five-year compound annual growth rate expected to be around 29.6%. The total investment in the services market is expected to exceed 4 billion US dollars in 2026, nearly four times the investment in 2021, with significant growth in the market. The IT services sector mainly dominates the artificial intelligence services market as defined by IDC. IDC expects IT services to drive the services market growth at a five-year compound annual growth rate of 31.0%.

From the perspective of artificial intelligence software, under the joint promotion of the gradual development of technologies including machine learning (ML) and computer vision, the policy environment in China, and the needs of customers gradually diversified, the share of the artificial intelligence software market in China will increase year by year, and more than 25 % of IT investment related to the artificial intelligence market will flow into software in 2026. In terms of growth rate, the artificial intelligence software market will become the fastest growing primary market during the projected five-year period, with a five-year compound annual growth rate of about 30.4%. From a technology sector perspective, AI platforms will absorb more than 70% of software-related spending over the next five years and will become an important driving force for software market growth with a five-year compound annual growth rate of 33.1%.

industry application

IDC expects AI-related user spending in the four major endpoint industries — professional services, government, finance, and communications — to continue to lead over the five-year forecast period, which together will exceed 60% of total AI market spending in China. Specifically, local governments. AI spending will drive AI investment to grow at a five-year compound annual growth rate of 24.3% and is expected to exceed US$2.51 billion in 2026; The central government is expected to have a five-year compound annual growth rate of 19.4% and reach $1.37 billion in 2026. The market size of the financial sector represented by banks will continue to grow over the next few years, with the growth rate expected to exceed Compound annual 21.0%. In addition, the construction, discrete manufacturing, and healthcare industries have also achieved high growth rates, which jointly promote the development and application of artificial intelligence in China. In the future, AI will be applied in various industries, expanding in width and depth. It will effectively support industries to achieve intelligent marketing and decision making. At the same time, the deep integration of AI with industries will stimulate more potential and foster more business opportunities.

use case

Based on research on the industries mentioned earlier, IDC’s Global AI Expenditure Guide covers 29 typical key AI use cases, which will be updated to reflect market dynamics. Three use cases will remain dominant, namely Enhanced Customer Service Agents, Public Safety and Emergency Response, and Smart Business Automation and Innovation. All three together will account for more than 30% over the five-year forecast period. Currently, there are mature applications of AI in various industrial use cases. It complements independent judgment and behavior learning through technologies, such as deep learning, computer vision and image recognition, to solve a variety of complex tasks, laying an important foundation for the intelligent transformation of the industry. In use cases, customer service agents are rapidly evolving, with cases in finance, retail, and other industries. Public safety and emergency response are mainly involved in government security, using fingerprint biometrics and facial recognition. In the future, with the increasing development of AI chips, 5G and other technologies, AI will also be better implemented in more fields.

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About IDC Spending Guides

IDC’s spending guides provide a detailed view of key technology markets from regional industry, vertical, use case, buyer, and technology perspective. Spending guides are delivered via pivot table format or a custom query tool, allowing the user to easily extract useful information about each market by viewing data trends and relationships.

For more information on IDC spending guides, please contact Vinay Gupta at vgupta@idc.com or Xueqing Zhang at xuqzhang@idc.com

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About IDC

International Data Corporation (IDC) is the premier global provider of market information, advisory services and events for the information and communications technology and consumer technology markets. With more than 1,300 analysts worldwide, IDC provides global, regional and local expertise in technology, industry opportunities, and trends in more than 110 countries. IDC’s analysis and insight helps IT professionals, executives, and the investment community make fact-based technology decisions and achieve their key business goals. Founded in 1964, IDC is a wholly owned subsidiary of the International Data Group (IDC).IDG), the global leader in media, data and technology marketing services. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at IDCAP And the LinkedIn. Subscribe to IDC . Blog For industry news and insights.

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