With the latest forecast from the International Data Corporation (IDC), it’s clear that artificial intelligence (AI) is at the forefront of this transformation. AI Spending to Reach $632 Billion by 2028, Says IDC. IDC’s Worldwide AI and Generative AI Spending Guide reveals that global spending on AI is set to more than double by 2028, reaching an astounding $632 billion. This surge in investment underscores the critical role AI will play in shaping the future of business.
Why This Matters for Your Business
As a business manager or CIO, you’re constantly looking for ways to enhance efficiency, improve customer engagement, and drive innovation. The IDC report makes it clear: AI is no longer a “nice-to-have” but a cornerstone of future business strategy. Whether it’s through AI-enabled applications, infrastructure, or related IT and business services, AI investments are becoming pivotal in gaining a competitive edge.
The forecasted compound annual growth rate (CAGR) of 29% over the 2024-2028 period signals that businesses worldwide are recognizing the value of AI-powered transformations. These transformations are not just theoretical; they are delivering tangible results, from improving employee experience to driving industry-specific innovations.
Generative AI For Businesses
While traditional AI applications such as machine learning and natural language processing continue to grow, generative AI (GenAI) is emerging as a particularly disruptive force. IDC forecasts that spending on GenAI solutions will grow at an impressive CAGR of 59.2%, outpacing the overall AI market. By 2028, GenAI spending is expected to hit $202 billion, accounting for 32% of all AI investments.
For your business, this means exploring GenAI is not just about keeping up—it’s about leading the charge in your industry. From creating new content to automating complex decision-making processes, GenAI offers endless possibilities for innovation. Now is the time to consider how GenAI can be integrated into your operations to unlock new levels of efficiency and creativity.
Key Industries Leading AI Adoption
The IDC report highlights several industries that are expected to lead AI adoption over the next five years. Financial services, particularly banking, will be at the forefront, accounting for more than 20% of all AI spending. This is followed closely by software and information services, and retail—industries that are rapidly transforming through AI-driven customer engagement and operational efficiency.
As a decision-maker, understanding where your industry stands in this landscape can help you make informed investment decisions. Whether you’re in financial services, retail, or another sector, aligning your AI strategy with industry trends is crucial for staying competitive.
Top Use Cases for AI in Business
AI infrastructure provisioning is currently the leading use case for AI solutions, but the report indicates that other use cases are quickly catching up. Augmented fraud analysis, AI-enabled customer service, and digital commerce are expected to see significant growth in AI spending, reflecting the diverse ways AI is being utilized to solve real business challenges.
For CIOs and business managers, this means focusing on AI applications that deliver immediate value. Whether it’s improving customer interactions, enhancing security, or streamlining operations, investing in AI use cases that align with your business goals will be key to maximizing ROI.
Regional Insights: Where the Money Is Going
Geographically, the United States is expected to lead AI spending, reaching $336 billion by 2028—more than half of the global total. Western Europe, China, and the Asia/Pacific region (excluding Japan and China) will also be significant contributors. For businesses operating in these regions, understanding the local AI landscape can provide valuable insights into market opportunities and competitive pressures.
The Road Ahead: Building an AI-Driven Future
The rapid growth in AI spending is a clear indicator that businesses worldwide are betting big on AI as a driver of future success. As you plan your AI strategy, consider the following:
- Start Now: With AI spending set to soar, delaying AI investments could mean missing out on critical opportunities. Begin integrating AI into your operations to stay ahead of the competition.
- Focus on High-Impact Areas: Prioritize AI use cases that offer the most significant business impact, whether that’s in customer service, fraud detection, or digital commerce.
- Invest in GenAI: Generative AI is poised to be a major growth area. Explore how GenAI can be used to innovate within your industry.
- Keep an Eye on Industry Trends: Align your AI strategy with industry-specific trends and regional insights to ensure your investments are targeted and effective.
Conclusion
The IDC forecast underscores the growing importance of AI in the global business landscape. For business managers and CIOs, this presents an unprecedented opportunity to future-proof your operations, drive innovation, and secure a competitive edge. By investing in AI today, you’re not just preparing for the future—you’re shaping it.
Ready to explore how AI can transform your business? Start by aligning your strategy with the latest trends and insights from IDC’s Worldwide AI and Generative AI Spending Guide.