Asia/Pacific AI Spending Surge to Reach a Projected $78 Billion by 2027
September 19, 2023 | IDCEstimated reading time: 3 minutes
Asia/Pacific spending on Artificial Intelligence (AI) ), including software, services, and hardware for AI-centric systems will grow to $78.4 billion in 2027, according to International Data Corporation's latest Worldwide Artificial Intelligence Spending Guide. The increase in AI spending reflects a shift toward leveraging cutting-edge technology to reimagine operations, improve customer experiences, and maintain a competitive edge in a rapidly changing market. IDC forecasts a compound annual growth rate (CAGR) of 25.5 percent for the period 2022-2027.
With a market share of 28.5 percent in 2023, the professional services industry is one of the leading industries in AI adoption, growing at a CAGR of 22.4 percent from 2022 to 2027. The majority of AI investment in Professional services is spent on AI Infrastructure Provisioning, in which infrastructure service providers create and manage the IT infrastructure for AI systems, and end users gain access to these resources required for computing and storage for AI system development or the provision of AI services. In the banking industry, AI is revolutionizing customer experiences through personalized financial recommendations and efficiently detecting fraudulent activity or the increased risk of fraud.
The industry's investment in AI-driven algorithms ensures secure transactions and anticipates customer needs, assisting in narrowing down the best available option and making a better decision, all of which contribute to a seamless and secure banking environment. Retail industries are harnessing AI to transform the way customers interact with their products and services. AI-enabled customer service agents, personalized recommendations, and dynamic pricing strategies enhance customer engagement.
"In the dynamic landscape of AI evolution, Generative AI has gained a huge momentum. Majority of the organizations in Asia/Pacific* started investing in Generative AI or are navigating its potential in 2023," says Vinayaka Venkatesh, Senior Market Analyst, IT Spending Guides, Customer Insights & Analysis, IDC Asia/Pacific. “Some of the key challenges faced by organizations while exploring AI are trustworthiness, privacy, security, copyright and finding a suitable business partner. However, these hurdles can be overcome as and when the technology matures," he added.
AI infrastructure provisioning is top leading usecase where Infrastructure services providers create and manage IT infrastructure for AI systems. Infrastructure service providers grant access to this infrastructure to users, providing resources needed for computing and storage for AI systems development, or the provision of AI services to end customers. The second fastest growing use-case is augmented customer service agents which focuses on improving customer experiences through instant query resolution, efficient issue escalation, and tailored recommendations. Sales process recommendation and augmentation is the next leading use-case helping business with AI-powered algorithms that analyze customer behavior and historical data to provide real-time insights to sales teams, enabling them to make data-driven decisions, improve customer engagement, and close deals more effectively.
In this cycle, we've incorporated generative AI (GenAI) use cases which are broad and generic in coverage. IDC's forecast that the GenAI market is poised to expand by $3 billion by 2027, with a CAGR of 85% from 2022 to 2027 within the Asia/Pacific region*. This allows us to acknowledge the increased use of GenAI even though spending is currently small. As the field of generative AI continues to evolve, we anticipate that use cases will diversify and become more tailored to specific applications.
China continues to be the leader in AI adoption in Asia/Pacific* in terms of AI spending, accounting for 50 percent of total AI spending in Asia/Pacific*, which is expected to reach nearly $38.4 billion by 2027 at a CAGR of 24.8 percent. China's commitment to AI-driven advancements is reshaping sectors and driving its emergence as a global AI superpower.
The Asia/Pacific region excluding Japan and China (APeJC) is emerging as a vibrant hub of AI innovation, accounting for 34% of total AI spending in Asia/Pacific*. which is expected to grow at a CAGR of 26.8 percent to nearly $28.2 billion by 2027. AI adoption is being led by countries such as India, Australia, and Korea. The region's AI commitment favors economic growth, digital transformation, and technological leadership.
Japan is the third-highest investing region in AI solutions, with a $12 billion investment expected by 2027 growing at a CAGR of 25%. The country's commitment to cutting-edge research is yielding breakthroughs in AI-powered automation and analytics. AI is being adopted by Japanese industries to improve productivity, quality control, risk management and customer experiences, thereby driving economic growth and technological leadership.
"IDC predicts AI systems will grow into an essential IT tool for businesses to improve productivity and better engagement with customers, employees, and stakeholders in Japan. The challenge will be to develop appropriate industrial use cases that have an impact on business while paying attention to security, accuracy, and ethics," says Takashi Manabe, Group Director, Data and Analytics, IDC Japan.
Suggested Items
TRI at SMTA Wisconsin Expo 2025
04/24/2025 | TRITest Research, Inc. (TRI), the leading test and inspection systems provider for the electronics manufacturing industry, will join the SMTA Wisconsin Expo 2025.
Driving Sustainability in PCB Design
04/24/2025 | Marcy LaRont, I-Connect007Filbert (Fil) Arzola is an electrical engineer at Raytheon. He’s smart, entertaining, and passionate about PCB design. As it turns out, he’s also passionate about “Mother Earth,” as he calls her. Born and raised in Southern California, he freely admits that he turns the water off when he brushes his teeth and yells at his brother for throwing batteries in the garbage. But when looking at the issue of sustainability and PCB design, he urges his audiences to ponder what sustainability looks like. Can PCB designers, he asks, make any impact on sustainability at all?
Real Time with... IPC APEX EXPO: Silicon Geometry's Signal Integrity Impact on PCBs
04/24/2025 | Marcy LaRont, I-Connect007At IPC APEX EXPO 2025, Kris Moyer addressed the importance of understanding the impact of silicon geometry reduction on signal integrity and PCB performance. Kris says signal integrity considerations are necessary for so many designs today, regardless of clock frequency. He discusses valuable insights from attendees regarding embedded resistor technology and the effects of radiation on smaller silicon features in aerospace applications.
Recognizing the IPC Committee Volunteer Awards in 2025
04/24/2025 | Patty Goldman, I-Connect007In 2023, IPC created two new awards to honor standards development committee volunteers: The Hillman-Lambert Award for Volunteer of the Year and the Kessler-Goldman Award for Committee Leader of the Year. The awards were named after Hall of Fame members whose service to standards development is well-known and who have demonstrated the skills and principles that the awardees should also have.
Explore Thermal Management Solutions in Latest Podcast Series—New Episode Now Available
04/23/2025 | I-Connect007I-Connect007 is excited to share the latest episode in our new podcast series! In this episode, Ryan returns to discuss practical strategies for managing heat, starting early in the design planning and specification phases. After all, prevention means there’s less to mitigate later.