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Home Technology Big Data, Analytics & Intelligence

AI opportunities in China

FutureCIO Editors by FutureCIO Editors
October 5, 2022
Photo by Alex Knight from Pexels: https://www.pexels.com/photo/high-angle-photo-of-robot-2599244/

Photo by Alex Knight from Pexels: https://www.pexels.com/photo/high-angle-photo-of-robot-2599244/

The IDC Worldwide Artificial Intelligence Spending Guide shows that total global IT investment in artificial intelligence (AI) in 2021 was US$92.95 billion, expected to increase to US$301.43 billion in 2026, and the compound annual growth rate (CAGR) was about 26.5%.

In recent years, more and more enterprises have become involved in the Digintelligence Era and started the deployment of digital transformation (DX) and intelligent upgrading, which has thus spawned more demand for AI. Driven by policies, technologies, and markets, AI empowering industries is becoming a mainstream development trend.

An expanding divide

Industry observers note a chasm dividing the world when it comes to artificial intelligence. Those on the sidelines are staying on the sidelines looking apprehensive and envying what is happening on the other side of the divide.

Speaking of the other side, companies that have experienced the benefits of AI are continuing to invest in the technology.

The China AI opportunity

Over the next five years, the hardware market will be the largest primary market in China's AI market, accounting for more than half of the total AI investment.

IDC predicts that China's IT investment in the AI hardware market will exceed US$15 billion in 2026, close to that of the AI hardware market size of the United States. With the gradual improvement of AI infrastructure construction, hardware growth will gradually slow down, with the five-year CAGR remaining around 16.5%. The server market, as the main part of the hardware market, will account for over 80% over the five-year forecast period.

At the same time, the services market will expand at a faster pace, with the five-year CAGR expected to be about 29.6%. Total investment in the services market is expected to exceed US$4 billion in 2026, nearly four times the investment in 2021, with significant market growth.

The AI services market as defined by IDC is mainly dominated by the IT services segment. IDC predicts that IT services will lead the services market growth at a five-year CAGR of 31.0%.

From the perspective of AI software, under the joint promotion of the gradual development of technologies including machine learning (ML) and computer vision, China's policy environment, and the gradually diversified customer needs, China's AI software market share will increase year by year, and more than 25% of the AI market–related IT investment will flow to software in 2026.

In terms of growth rate, the AI software market will become the fastest-growing primary market during the five-year forecast period, with a five-year CAGR of about 30.4%.

From the perspective of the technology segment, AI platforms will absorb more than 70% of software-related spending over the next five years and will become an important driving force for software market growth at a five-year CAGR of 33.1%.

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Tags: Artificial IntelligenceDigintelligence Eradigital transformationIDC
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