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Strong growth for European AI.

Strong AI growth forecasted for Europe

Artificial intelligence spending in Europe will reach $34.2 billion this year, 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, International Data Corporation (IDC) says in a forecast.

“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”, the forecast says.

“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.”

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“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 at IDC.

The report says 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.”

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