IDC Predicts Enterprises to Invest $143 Billion in Generative AI Solutions by 2027

IDC suggests that generative AI solutions are not a fad and big tech companies will invest billions into the technology.

Artificial Intelligence AI

According to a recent report by IDC, enterprises are projected to invest a whopping $143 billion in Generative AI (GenAI) solutions by the year 2027. The report reveals an escalating investment pattern which starts from about $16 billion in 2023 and will experience approximately 73.3% rise annually on average.

IDC, the global market intelligence firm, has maintained that GenAI is not a temporary fad or hype. Rather, it anticipates profound implications of this technology that will bring about a sea change in how we work, engage in leisure activities and interact with our world.

Surge in GenAI Service Spending

A granular examination of GenAI expenditure points towards an anticipated dominance of GenAI service spending over infrastructure by the end of the forecast period. The firm has also highlighted the possibility of the GenAI software segments experiencing the swiftest growth over the forecasted timeline, with a projected compound annual growth (CAGR) of 96.4%. This is closely followed by GenAI application development and deployment and applications software, with an expected 82.7% CAGR.

Challenges Ahead for GenAI Implementation

Rick Villars, the group vice president, Worldwide Research at IDC, noted that the acceleration of GenAI spending will be somewhat hampered until 2025 due to turbulence in workload shifts and resource allocation, including silicon and networking. Model confidence, AI skills, facilities, privacy and security concerns, pricing, and a potential existential crisis that might trigger significant opposition from consumers or regulatory interventions, might further impede the anticipated pace of investment.

In view of the rise predicted by IDC, it implies that the application of could be widespread in numerous products. Major tech companies have already incorporated AI into their search products and various AI apps have emerged along with the introduction of larger language models.

Companies like and GitHub are currently using AI-assisted coding software, and GenAI is making its way into office tools to assist users in refining their work. The coming years will be interesting to watch as more companies outside the traditional tech sector are likely to get involved with this emerging technology.