Spending Spree: AI Spend To Reach $150b By 2027, Become “Lead Motivator of Innovation”

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The best charts tell the whole story.


(Source: Insider Intelligence)

That’s definitely the case with this one Insider Intelligence recently shared, showing how much is (and how much is forecast to be) spent on generative AI solutions. 

Essentially, what had been less than $20 billion in enterprise spending last year will “multiply nearly eightfold in five years” to north of $150 billion by 2027.

Considering the forecast is that we’ll double 2023’s numbers this year, it’s incredible to see how far we’ve come, so quickly. (And almost unimaginable to think how far we’re expected to go.)

That spending forecast, from the International Data Corporation (IDC), factors spending on AI software, infrastructure hardware, and IT/business services. In addition to the $151.1 billion expected to be reached in 2027, the compound annual growth rate from 2023 to 2027 is 86.1%.

“Despite IT headwinds in 2023, businesses accelerated their exploration of GenAI to boost business transformation,” says Rick Villars, IDC’s group vice president of worldwide research. “In 2024, the shift to AI everywhere will enter a critical buildout phase as enterprises make major new investments with the goal of drastically reducing the time and costs associated with customer and employee productivity use cases. From there, the focus will shift to investments that boost revenue and business outcomes.”

IDC forecasts that by 2027, spending on generative AI will account for 29% of overall AI spending (up from 10.8% last year).

“While companies at all levels will experience a shift in their technology investments toward AI implementation and the adoption of AI-enhanced products/services, the IT industry will make much a greater and faster AI pivot during the same period,” the IDC press release says. “This is because every company will race to introduce AI-enhanced products/services and to assist their customers with AI implementations.”

“For most, AI will replace cloud as the lead motivator of innovation.”


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