The International Data Corporation (IDC) forecasts a global surge in artificial intelligence (AI) investments, expecting a total of $423.6 billion by 2027, with a compound annual growth rate (CAGR) of 26.9% from 2022 to 2027.
Focusing on the Chinese market, investments in AI are projected to hit $38.1 billion by 2027, accounting for nearly 9% of the global investment pool.
In recent years, rapid technological advancements and market maturity have spurred Chinese companies to accelerate their intelligent upgrades. The emergence of large AI models at the end of 2022 provided a crucial overtaking opportunity for new entrants to the market.
Previously, the widespread adoption of large models was limited, creating bottlenecks as companies sought to transition AI technologies from pilot trials to full-scale applications, hampered by a fragmented talent and resource landscape.
The introduction of large AI models has significantly lowered the barriers to technology adoption and enhanced AI’s generalization capabilities, fostering the development of innovative applications and solutions. The model-as-a-service business model could potentially reshape the current market dynamics, leading China into a new era of digital business development.
IDC’s recent release, “IDC FutureScape: Worldwide AI and Automation 2024 Predictions – China Implications,” offers vital insights for IT and business decision-makers responsible for leveraging solutions and directing AI and automation expenditures.
The report, outlining ten predictions for the AI and automation markets from 2024 to 2029, assesses each forecast based on its impact and time frame. These predictions are designed to guide strategic planning, adjustments, and resource allocation in the AI and automation spheres for IT and business leaders.
Key Predictions for China’s AI and Automation Market
- GenAI Security and Governance: By 2025, 40% of cloud and software platform providers will integrate GenAI security and governance with their primary services, tripling the reduction in GenAI-related risks.
- Regulatory Divergence: AI regulatory differences across regions will pose significant challenges for multinational companies by 2026, increasing the time and effort required to manage sensitive issues by 20%.
- Digital Assistants Over Software Interfaces: By 2027, GenAI digital assistants will replace 20% of enterprise software interfaces, playing an increased role in business processes.
- Outcome-Focused Automation: Following GenAI technology attention, 50% of enterprises will focus on the outcomes of GenAI rather than the implementation of specific technologies by 2024.
- AI in IT Expenditure: By 2026, China’s top 500 companies will allocate over 30% of their core IT spending to AI, accelerating product innovation and process improvement at a double-digit rate.
- Stabilizing Economic Impact of AI: By 2028, the overall economic impact of AI will stabilize as companies address fundamental issues and refocus resources on innovation and new business opportunities, promoting steady growth.
- Practical Application of Automated Knowledge Retrieval: Two-thirds of enterprises will use a combination of generative AI and RAG for domain-specific automated knowledge retrieval by 2027, improving decision efficiency by 55%.
- Disruptive Business Models: By 2025, 50% of China’s top 500 companies will leverage innovative business models to double the profit potential of generative AI.
- Impact of AGI: By 2027, 25% of China’s top 500 companies will experiment with AGI systems, heralding transformative societal impacts along with significant opportunities and challenges.
- Reversal in Chip Revenue: By 2028, spending on accelerator chips (GPUs, FPGAs, ASICs, or ASSPs) versus traditional CPUs will invert, reaching a 55/45 ratio.
China’s AI Market Booms with Focus on Professional Services, Government, and Finance