Spending on artificial intelligence increased 20.7% worldwide in 2021, according to IDC

AI software captures the largest share of AI spending with AI platforms delivering 36.6% growth

NEEDHAM, Mass., September 12, 2022 – Worldwide artificial intelligence (AI) market revenue, including software, hardware and services for both AI-centric and non-AI-centric applications*, totaled $383.3 billion in 2021, up 20.7% compared to the previous year, according to the latest International Data Corporation (IDC) Worldwide Semiannual Artificial Intelligence Tracker. IDC expects the AI ​​market value to reach nearly $450 billion by 2022 and maintain a year-over-year growth rate in the high teens throughout the five-year forecast.

“Across all industries and functions, end-user organizations are discovering the benefits of AI technologies as increasingly powerful AI solutions enable better decision-making and higher productivity,” says Rasmus Andsbjerg, associate vice president, Data & Analytics at IDC. “The reality is that AI offers solutions to everything we currently face. AI can be a source of rapid digital transformation journeys, enable cost savings in times of staggering inflation rates, and support automation efforts in times of labor shortages.”

AI Software again accounted for the largest share of the total AI market in 2021. Together, the four AI software categories – AI Applications Delivery & Deployment, AI Applications, AI System Infrastructure Software and Artificial Intelligence Platforms – delivered more than $340 billion in market value in 2021 with AI applications representing almost half of the total. Artificial Intelligence Platforms delivered the strongest year-on-year growth of 36.6%, albeit from a smaller baseline.

Within the AI ​​applications category, AI Customer Relationship Management (CRM) applications and AI Enterprise Resource Management (ERM) applications each provided about 16% of the overall category. The rest was provided by the myriad of other AI applications available on the market. With nearly 300 companies vying for opportunities to gain share, the market for AI applications remains highly competitive.

IDC’s AI Tracker also shows that AI-centric applications, where AI technologies are central and critical to the operation of the application, continued to slowly grow its share of the AI ​​software market. By 2021, AI-centric applications captured 12.9% of the market, up 29.3% year over year. The rest of the market was owned by non-centric AI applications, where AI technologies are integrated into certain workflows in the application, but if these technologies were removed, the application would still be able to function.

Similarly, the deployment of AI software for the cloud continues to show growth. In 2021, 47.3% of AI software purchases were deployed to the public cloud, up four percentage points from 2020 and 8.4 percentage points from 2019. IDC expects the cloud deployment of newly purchased AI -software will surpass local implementations in 2022.

The AI ​​Services market saw its overall value rise 22.4% year-over-year to $24 billion by 2021. Customer demand for expertise in developing production-grade AI solutions helped the AI ​​IT Services category grow 21.9% year-over-year year to USD 18.8 billion. The AI ​​Business Services category grew 24.2% year over year as organizations sought help with AI management, business processes and talent strategies.

AI Hardware was both the smallest ($18.8 billion) and fastest growing (38.9% year-over-year growth) segment of the AI ​​market. Hardware growth was driven by efforts to build dedicated AI systems capable of meeting the increased computational and storage demands of AI models and datasets. While both AI Servers and AI Storage delivered strong growth in 2021 – 39.1% and 32.9% respectively – server purchases were significantly larger at $15.6 billion.

* Taxonomy note: The IDC Worldwide Semiannual Artificial Intelligence Tracker uses a broad definition of AI applications that includes both AI-centric applications and non-AI-centric applications. AI-centric applications are AI applications or modules where AI technologies are central and critical to the operation of the application, and if the AI ​​technologies are eliminated, the application will cease to exist. Non-centric AI applications include those applications where the AI ​​component is non-centric or not fundamental to the application. In other words, the application will work without the inclusion of the AI ​​component. This enables the inclusion of vendors that have incorporated AI capabilities into their software, but the applications are not used exclusively for AI functions. In comparison, the IDC Worldwide Artificial Intelligence Spending Guide uses only the AI-centric definition of what constitutes an AI application. This distinction allows Spending Guide to focus on those software applications that are heavily AI-centric.

The IDC Worldwide Semiannual Artificial Intelligence Tracker provides consumption data and vendor shares for the global AI solutions market on a semiannual basis. The key technology groups—hardware, software, and services—are built on IDC’s comprehensive methodology involving vendor product, market, and workload modeling. AI revenues for over 750 companies are included in the Tracker, ensuring that the competitive landscape is well represented across all three technology groups. Data is available for 27 countries and five other regions.

About IDC Trackers

IDC Tracker products provide accurate and timely market sizes, vendor shares and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semi-annual, quarterly and monthly basis. Tracker results are delivered to clients in easy-to-use Excel deliverables and online inquiry tools.

For more information on IDC’s Worldwide Semiannual Artificial Intelligence Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

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About IDC

International Data Corporation (IDC) is the leading global provider of market intelligence, advisory services and events to the information technology, telecommunications and consumer technology markets. With more than 1,300 analysts worldwide, IDC provides global, regional and local expertise in technology, IT benchmarking and sourcing, as well as industry opportunities and trends in over 110 countries. IDC’s analysis and insights help IT professionals, business leaders and the investment community make fact-based technology decisions and achieve their most important business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading technology media, data and marketing services company. To learn more about IDC, please visit https://www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC blog for industry news and insights.

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