APAC Is Spending Big on AI
- By CDOTrends editors
- October 03, 2022
With the digital-first era well underway, enterprises in Asia-Pacific are turning to artificial intelligence (AI) to enable their digital transformation (DX) initiatives. According to IDC, AI spending in the region will reach USD46.3 billion by 2026, growing at a compound annual growth rate (CAGR) of 23.7% from 2021 to 2026.
Spending in the region's top five use cases for AI is also expected to double by 2026. These use cases are: augmented customer service agents, smart business innovation and automation, sales process recommendation and augmentation, IT optimization, and augmented threat and intelligence systems.
IDC said that companies that pour resources into AI would be best positioned to reap the benefits of DX. From using AI to develop new products and services to automate complex business tasks, AI can help enterprises in Asia-Pacific to gain a competitive edge.
More importantly, one of the key differentiating capabilities for enterprises to compete in the digital-first era is their ability to manage the "data to intelligence" lifecycle, according to IDC Asia-Pacific's Jessie Danqing Cai, associate research director for AI. This involves collecting and curating data, training and deploying AI models, and continuously monitoring and optimizing them.
Key spending trends
In response to the current market circumstances, IDC observed trends in AI spending in Asia-Pacific. Banks will continue investing in AI solutions to address market risks and threats. To decrease risks, they will employ AI-enabled apps that improve threat intelligence and fraud analysis. Furthermore, due to the present economic volatility and growing resource scarcity, discrete manufacturers are increasingly interested in investing in AI technologies.
From the state to the federal/central levels, governments are IDC's next big spender on AI solutions. Their focus is on public safety and emergency response, defense, terrorism, investigation, and government intelligence systems.
Policies will be necessary for the development of the AI ecosystem in Asia-Pacific. In China, for instance, the government has been actively promoting the adoption of AI at the enterprise level and has put in place policies to support the development of its local AI industry.
"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 for IT Spending Guides at IDC Asia/Pacific.
To fully leverage AI, companies must be able to bridge the skills gap, Venkatesh added. In Asia-Pacific, this is one of the most considerable challenges hindering AI adoption and prompting governments to take action. For example, South Korea's spending on AI solutions is expected to reach USD2.9 billion by 2026, thanks to initiatives such as establishing AI Hubs and education and training programs for developing AI skills — a big help in bridging the AI skills gap.