Spending on artificial intelligence (AI) in the Asia-Pacific region is expected to surge by more than 50 percent on an annual basis to US$6.2 billion this year, market advisory firm International Data Corp (IDC) said.
“Artificial intelligence is having an impact across many industries with widespread utilization, but is still at a nascent stage in the Asia-Pacific,” IDC associate market analyst for Asia-Pacific Ritika Srivastava said in a report on Friday last week.
“From providing chatbots for better customer service to improving the efficiency of operations and tasks for their business models, industries like banking, retail and professional services are spending in this technology at scale,” Srivastava said.
The banking industry would lead the way in spending on AI and contribute about 10.7 percent of overall spending in the Asia-Pacific region, the report said.
Banks would mostly focus on AI/cognitive systems for fraud analysis and investigation, while also investing in automated customer service agents, it said.
The retail industry would become the second-biggest spender on AI with an estimated 10.2 percent contribution through investments in AI-enabled solutions, including expert shopping advisers, product recommendations and merchandising for omni-channel operations, it added.
Although spending on AI is concentrated on hardware, with nearly US$4 billion allocated to servers and storage this year, IDC said that it expects the focus to shift to software over the next four years, with a compound annual growth rate in spending of 71.3 percent.
China has been the largest contributor to spending on AI this year, with 71 percent of overall spending in the Asia-Pacific region, the report said.
“Not surprisingly, China is the primary source of AI investment in Asia, as it remains a priority very much for government and state organizations, as well as a small number of aggressive digital native enterprises like Tencent [Holdings Ltd (騰訊)], Baidu [Inc (百度)] and Alibaba [Group Holding Ltd (阿里巴巴)],” IDC Asia-Pacific associate vice president Christopher Marshall said in a statement.
“Elsewhere in Asia, although experimentation is common, enterprise deployment of AI is still relatively rare, and much remains to be done if Asia-Pacific companies hope to compete with major players in China and the US,” Marshall said.
Nevertheless, South Korea and Australia are slowly gaining momentum in the adoption of AI solutions, the report found.
IDC predicted that overall spending on AI would increase from last year at a compound annual growth rate of 39.6 percent to US$21.4 billion by 2023.