European AI Market to Reach $47.6 bn by 2024, IDC Report

The AI and generative AI (GenAI) market in Europe will surge to nearly $47.6 billion in 2024, marking a significant compound annual growth rate (CAGR) of 33.7 percent over the forecast period of 2022-2027, IDC said. This announcement underscores Europe’s substantial presence, representing approximately one-fifth of the global AI market.
Spending on GenAI Solutions in Europe IDC reportGenerative AI accounted for 9.6 percent of the total European AI market in 2023. Projections indicate that spending on GenAI will outpace the rest of the artificial intelligence market by more than threefold, propelling GenAI to constitute over a quarter of the total European AI market by 2027.

Software emerges as the dominant technology segment in 2024, surpassing both hardware and services combined in market value. Moreover, it is anticipated to exhibit the swiftest growth during the 2022-2027 period, fueled by the escalating demand for AI applications and platforms.

The report suggests that while the share of hardware technologies will diminish over time in favor of software technologies, exceptions exist, notably within the software and information services industry, where hardware remains prominent due to specific AI infrastructure provisioning use cases.

The adoption of AI is pervasive across various sectors, with a notable inclination towards integrating GenAI solutions.

A survey conducted by IDC in December 2023, titled the EMEA Cross-Industry Acceleration Survey, revealed that one in three companies either presently employs or intends to adopt AI solutions within the subsequent 24 months. The impetus behind this widespread adoption lies in the imperative to streamline business processes with a keen emphasis on customer and employee-centric initiatives.

Noteworthy successes in enhancing customer experience and augmenting employee productivity have underscored the efficacy of AI solutions, albeit challenges remain, particularly concerning the ethical utilization and comprehensive integration of AI within organizational frameworks.

Carla La Croce, Research Manager of Customer Insights and Analysis at IDC, emphasizes the necessity for the full integration of AI and GenAI within businesses, accompanied by responsible practices.

“Realizing the full potential of AI and generative AI requires time. Although it is clear what benefits AI and GenAI solutions bring to companies’ internal organization and processes, effectively realizing these benefits requires long-term planning,” Carla La Croce said.

Among industries, banking, retail, and software and information services emerge as the top three spenders, collectively constituting nearly a third of the European AI market.

In the financial sector, AI applications are instrumental in fortifying cybersecurity measures, bolstering fraud detection, and enhancing customer support services.

Similarly, retailers are leveraging AI to meet evolving customer demands, with applications ranging from augmented customer service agents to personalized product recommendations. Furthermore, GenAI is gaining traction within the retail landscape, particularly in marketing, sales, and customer engagement endeavors.

The software and information services industry, encompassing software vendors and data services companies, exhibit a distinct spending pattern focused on AI infrastructure provision. Notably, while hardware components dominate spending initially, software is anticipated to witness exponential growth, fueled by the proliferation of platform and software-as-a-service solutions.

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