
GenAI adoption going swiftly
Adoption of generative artificial intelligence (GenAI) is going swiftly from testing to more integrated business solutions, according to market research firm International Data Corporation (IDC). The company forecasts that European spending on AI will reach $133 billion by 2028, growing at a compound annual growth rate (CAGR) of 30.3% over 2024–2028.
“While artificial intelligence itself is not new, the acceleration in AI adoption is largely driven by the attention surrounding generative AI,” says Carla La Croce, IDC research manager.
“GenAI adoption is moving swiftly from early testing and experimentation to more integrated business solutions. The CAGR for GenAI is expected to be 55% over the forecast period, significantly higher than that of more established AI technologies.”
According to an IDC survey, approximately 40% of European companies are making significant investments in GenAI, with plans to invest in training, GenAI-enhanced software, and consulting services over the next 18 months.
Additionally, 30% of companies have already deployed GenAI-enhanced applications and services in production environments, IDC says.
“From a technology perspective, software will be the largest category of AI spending, accounting for around 58% of overall investments and continuing to grow throughout the forecast period.”
“Initially, applications and platforms will represent the majority of software spending; however, by 2028, AI platforms will dominate, enabling end users to develop more customised solutions in response to increasing demand for tailored products.”
The forecast says services will be the second-largest and fastest-growing category, followed by hardware.
“European investments in infrastructure-as-a-service (IaaS), servers, and storage are expected to be lower than those in the US, as major infrastructure providers are located outside Europe.”
The financial services sector is expected to lead in AI spending over the forecast period, with banking at the forefront, accounting for more than 23% of total AI investments. Other major industries for AI spending include retail and software/information services.
Media and entertainment will be the fastest-growing sector, with a CAGR exceeding 33%, driven by the adoption of GenAI solutions for customer-centric use cases such as guided selling. Additionally, healthcare, life sciences, and retail will record above-average growth rates, with CAGRs exceeding 30% over the forecast period.
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