A new forecast from IDC says that enterprise spending on generative AI from now through 2027 will be 13 times greater than the growth rate for overall worldwide IT spending on IT. Credit: Shutterstock Enterprise spending on generative AI services, software and infrastructure will skyrocket over the next four years, jumping from $16 billion this year to $143 billion in 2027, according to technology research and advisory firm IDC. Spending on generative AI over the four year period to 2027 is expected to reach a compound annual growth rate (CAGR) of 73.3%, a figure which IDC says is more than twice the rate of growth in overall AI spending and almost 13 times greater than the CAGR for worldwide spending on IT over the same period. IDC has forecast that by the end of 2027, spending on generative AI will account for 28.1% of overall AI spending, with generative AI infrastructure — which includes hardware, infrastructure as a service (IaaS), and system infrastructure software (SIS) — representing the largest area of investment during the so-called buildout phase of this period. However, despite this initial growth spurt, IDC believes that spending on generative AI services will gradually overtake infrastructure by the end of the forecast period, with a five-year CAGR of 76.8%. Furthermore, the analyst house predicts that generative AI software segments will see the fastest growth during the 2023-2027 forecast period, with platforms and models delivering a CAGR of 96.4%, compared to the 82.7% CAGR it expects to see in the application development and deployment (AD&D) and applications software segment. Companies are currently experimenting with generative AI, but are expected to start aggressively building out targeted business use cases for widespread adoption, including an extension of AI applications to edge networks, IDC said. “Generative AI is more than a fleeting trend or mere hype. It is a transformative technology with far-reaching implications and business impact,” said Ritu Jyoti, group vice president for AI at IDC, in a news release for the new report. “With ethical and responsible implementation, GenAI is poised to reshape industries, changing the way we work, play, and interact with the world.” IDC said it will be publishing more detailed forecasts, including the impact on end devices, network services, and software applications that are enhanced through incorporation of generative AI, in the coming months. Related content feature 8 AI-powered apps that'll actually save you time Most AI apps are buzzword-chasing hype-mongers. These eight off-the-beaten-path supertools are rare exceptions. By JR Raphael Jul 01, 2024 15 mins Generative AI Productivity Software feature Windows 11 Insider Previews: What’s in the latest build? Get the latest info on new preview builds of Windows 11 as they roll out to Windows Insiders. Now updated for Build 26244 for the Canary Channel and Build 22635.3858 for the Beta Channel, both released on June 28, 2024. By Preston Gralla Jul 01, 2024 272 mins Small and Medium Business Microsoft Windows 11 news analysis EU commissioner slams Apple Intelligence delay Margrethe Vestager, Europe's chief gatekeeper, takes a shot at Apple's decision to delay rolling out the company's AI. By Jonny Evans Jun 28, 2024 7 mins Regulation Apple Generative AI how-to Download our unified communications as a service (UCaaS) enterprise buyer’s guide Does your phone system date back to the last century? If so, you’re missing out on new technologies that can increase productivity and support a more distributed workforce. That’s where unified communications as a service, or UCaaS, comes By Andy Patrizio Jun 28, 2024 1 min Unified Communications Enterprise Buyer’s Guides Cloud Computing Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe