Australian artificial intelligence spending to reach $2 billion in 2022

Australian organisations will spend some $2 billion on artificial intelligence systems by the end of 2022, according to research from IDC.

In the market research firm’s Worldwide Artificial Intelligence Spending Guide, some 52 percent of AI spending will be on software at the end of the year, while services and hardware will be at 30 percent and 18 percent respectively.

IDC also predicted that investments in AI by Australian organisations will continue beyond 2022, and AI spending will reach more than $3.5 billion by 2025.

“In Australia, we continue seeing a rapid adoption of artificial intelligence systems across various industries, indicating strong demands from Australian organisations in modernisation and streamlining of core business processes,” IDC Australia senior market analyst for data and analytics Anastasia Antonova said.

“It is going to be essential for Australian businesses to continue investing in AI capabilities to revamp operational processes, improve customer data analysis and business outcomes, support decision-making and forecasting, and, as a result, ensure flourishing customer experience.”

Across Asia-Pacific (excluding Japan), IDC said spending on AI systems will reach $17.6 billion in 2022, and will balloon to $32 billion by 2025.

IDC said businesses investing in AI “gain a competitive advantage” through improved customer insight, increased employee efficiency, and accelerated decision making.

IDC Asia-Pacific associate research director of cognitive computing and AI Jessie Danqing Cai said, “Many of the changes caused by the pandemic will stay and we expect the adoption momentum of practical AI use cases such as remote or contactless engagement to continue.”

“In the long term, a clear guidance on the management of the associated risk factors of AI solutions will further boost the confidence level of buying organisations.”

Across the region, IDC said the banking industry will spend the most on AI solutions for applications like risk mitigation, using tech like augmented threat intelligence and fraud analysis applications. State and local governments are the next biggest spender, focusing on public safety and emergency response, augmented threat intelligence, and prevention systems.

Professional services however will see the fastest spending growth over the next five years with a compound annual growth rate (CAGR) of 26.6 percent, with investments like augmented customer service agents.

IDC senior market analyst Vinayaka Venkatesh said, "Increasing government regulations and mandates of AI's trust, robustness, and its ethical use will need to be addressed by organisations."

"Customer-facing industries such as financial services, hospitality and tourism will take the lead in addressing these government mandates."