Asia’s A1000 Organizations to Channel 50% of IT Budgets into AI: IDC Reports

The International Data Corporation (IDC) anticipates Asia’s top 1000 organizations (A1000) are projected to allocate over half of their core IT expenditure to artificial intelligence (AI) initiatives by 2025. This strategic move is expected to trigger a substantial surge in the rate of product and process innovations.
robots in retail businessOver the last two to three years, the influence of artificial intelligence has catalyzed transformative breakthroughs in both product development and operational processes. This shift is reshaping the fundamental dynamics of how enterprises operate, cater to customer needs, and enhance employee productivity.

Notably, AI’s role in product innovation is underscored by its ability to empower organizations in crafting highly personalized products and solutions, leveraging customer preference data.

According to IDC’s Future Enterprise Resiliency and Spending Survey from March 2023, 46 percent of North American respondents are either investing in or exploring potential use cases for Generative AI (GenAI). In the Asia/Pacific region, this number climbs to an impressive 70 percent, while in EMEA, it stands at 76 percent.

AI security and compliance have taken center stage for technology vendors and users alike. Cloud and software platform providers are integrating GenAI safety measures seamlessly into their offerings, collectively addressing IT risks. Looking ahead, IDC outlines several AI-driven predictions for 2024 and beyond:

Enhanced AI Security: By 2026, 70 percent of cloud and software platform providers in Asia Pacific are expected to include GenAI safety and governance packages with their primary services, reducing GenAI risk scenarios by threefold.

Global AI Rules Challenge: Anticipated for 2027, the divergence in AI regulations across geographies is predicted to pose significant challenges for A2000 companies, potentially increasing implementation time and effort for sensitive use cases by up to 20 percent.

In the pursuit of improved productivity and enhanced employee experience, digital assistants have emerged as pivotal players. As businesses navigate the quest for knowledge, Generative AI and Retrieval Augmented Generation (RAG) are identified as technologies capable of elevating self-service knowledge discovery and decision-making power.

Digital Assistants’ Popularity: Envisaged for 2027, GenAI digital assistants are projected to serve as the user interface for 30 percent of interactions with enterprise software in A1000, spanning from software development to operational business processes like customer engagement.

Smart Knowledge Discovery: By 2026, two-thirds of A1000 businesses are expected to leverage a combination of Generative AI and RAG for domain-specific self-service knowledge discovery, enhancing decision-making by a significant 40 percent.

As AI technologies continue to evolve and permeate diverse industries, they carry the promise of unlocking substantial economic potential and driving societal changes. With the potential to optimize processes, streamline operations, and foster innovation, AI is poised to deliver gains in productivity, create new job opportunities, and stimulate economic growth.

Economic Impacts of AI: By 2028, the overall economic impact of AI is projected to neutralize as A1000 organizations overcome initial disruptions and refocus resources on innovation and new business opportunities, thereby fueling economic expansion.

Outcome-Driven Automation: A shift in focus is anticipated, with 70 percent of A1000 enterprises redirecting their attention towards mandating automation strategies based on outcomes rather than specific technologies by 2025.

Business Revolution: In a groundbreaking prediction, it is foreseen that by 2025, 10 percent of A1000 companies will exploit innovative business models to double their monetization potential of generative AI.

Societal Impacts of AI: By 2028, an anticipated 10 percent of A1000 companies will experiment with Artificial General Intelligence (AGI) systems, currently speculative, that are expected to have a transformative effect on society, presenting both significant opportunities and threats.

Undoubtedly, robust infrastructure and computing power are deemed critical for the optimal functioning of AI. Looking ahead to 2027, a significant inversion in spending patterns on server accelerators compared to server CPUs is forecasted, indicating a transformative shift in the realm of AI hardware.

Silicon Evolution: By 2027, the spending on server accelerators (GPU, FPGA, DPU, and AI ASICs and ASSPs) is projected to invert compared with server CPUs, achieving a 55/45 rate.

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