Publication date: 14 Sep 2023
GenAI Solutions Help European AI Market Thrive in an Uncertain Economic Environment, Says IDC
MILAN, September 14, 2023 — The latest Worldwide Artificial Intelligence Spending Guide (V2 2023) published by International Data Corporation (IDC) shows that artificial intelligence (AI) spending in Europe will reach $34.2 billion in 2023, representing 20.6% of the worldwide AI market. AI spending in Europe will post a 29.6% compound annual growth rate (CAGR) between 2022 and 2027, slightly higher than the worldwide CAGR of 26.9% for the same period, with spending expected to exceed $96.1 billion in 2027.
AI solutions are becoming increasingly widespread, driven by operational efficiency and IT optimization needs, as well as to provide improved customer experiences. IDC indentified augmented threat intelligence and prevention systems, together with augmented fraud analysis and investigation, as prevalent AI use cases, particularly in the finance sector and in more threat-exposed industries such as telecom or central and local government. Improved customer experience and enhanced sales processes are delivered through use cases such as augmented customer service agents and sales process recommendation and augmentation, primarily in the retail space and, to a lesser extent, in banking.
Banking, professional services, retail, manufacturing, and telecom are the biggest AI industries, accounting for more than 60% of total European AI market spending in 2023. While spending in other industries such as healthcare, media, personal and consumer services, and utilities is smaller, it is growing at a higher-than-average pace.
In an uncertain economic environment, where inflation is playing a key role in investment decisions, the AI market is still growing healthily, supported by demand for generative AI (GenAI) technologies.
"GenAI is gaining attention from vendors, consumers, and businesses, raising questions that range from how to embed the technology in products and how to benefit most from its usage to how to ensure responsible usage, given such widespread demand," says Carla La Croce, research manager for Customer Insights and Analysis, IDC.
GenAI uses cases are exploding. IDC’s Spending Guide shows that the fastest-growing GenAI use case is image creation, which is widely used in media and marketing activities, followed by text creation, particularly in the professional services industry.
“Spending on GenAI use cases is still lower than for more well-established AI use cases, but it is growing rapidly. The creation of images, text, and videos are the most common use cases, with the greatest growth over the last year,” says La Croce. “Companies are racing to enhance existing applications with AI features, while more forward-looking and innovative vendors are embedding GenAI in their solutions to meet increasing demand.”
About IDC's Worldwide Artificial Intelligence Spending Guide
IDC's Worldwide Artificial Intelligence Spending Guide (V2 2023) sizes spending for technologies that analyze, organize, access, and provide advisory services based on a range of unstructured information. It quantifies the AI opportunity by providing data for 36 use cases across 19 industries in nine regions and 32 countries. Data is also available for the related hardware, software, and services categories.
IDC's Worldwide Artificial Intelligence Spending Guide uses a precise definition of what constitutes an AI application in which the application must have an AI component that is crucial to the application — without this AI component the application will not function. This distinction enables the guide to focus on those software applications that are strongly AI centric. In comparison, IDC's Worldwide Semiannual Artificial Intelligence Tracker uses a broad definition of AI applications that includes both AI-centric applications and applications where the AI component is non-centric, or not fundamental, to the application. In other words, the application will function without the inclusion of the AI component. This enables the inclusion of vendors that have incorporated AI capabilities into their software, but where the applications are not exclusively used for AI functions only.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight help IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.
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