Enterprise AI Spending Surges Toward $500 Billion by 2024
Companies are projected to spend $342 billion on artificial intelligence in 2021, with the market expected to break the $500 billion mark by 2024. Software currently dominates the sector, but hardware and services show the fastest growth rates.
Companies spend nearly $342 billion on artificial intelligence software, hardware, and services in 2021, according to the latest IDC Worldwide Semiannual Artificial Intelligence Tracker. The market accelerates with 18.8% growth projected for 2022 and remains on track to break the $500 billion mark by 2024. This surge follows a year of disruption that strengthens the value of enterprise AI across global markets.
AI software accounts for 88% of the overall market, encompassing applications, platforms, and system infrastructure controls. Within this segment, AI lifecycle software grows the most quickly as businesses seek solutions for governance, development, and maintenance. Meanwhile, AI hardware represents only 5% of the market but experiences the fastest growth in 2021 at 29.6% year over year.
The AI services category shows remarkable strength, with IT services and business services reaching $19.4 billion in 2020. Major tech consultancies like IBM, Accenture, and Tata Consultancy Services each notch over $1 billion in AI services revenue that year. IDC forecasts AI services to become the fastest-growing category from 2023 onward, achieving a compound annual growth rate of 21% over the next five years.