Australian organisations are predicted to spend around $3.6 billion on artificial intelligence systems in 2025, according to research from IDC.
The market research firm said the spending growth represents a compounded annual growth rate (CAGR) of 24.4 percent from 2020 to 2025, as organisations increase their investments to “keep up with the changing digital environment”.
“In Australia, we continue seeing a rapid adoption of artificial intelligence systems across various industries, indicating strong demands from Australian organisations in streamlining of core business processes and maximising the power of their organisational data," IDC Australia senior market analyst for data and analytics Anastasia Antonova said.
"It is going to be very important for Australian businesses to continue investing in AI tools and platforms to support decision-making, become more digitally resilient, innovative and be one step ahead from competitors.”
Banking will lead AI spending growth with a five-year CAGR of 23.1 percent, driven by use cases including fraud prevention, identifying threats in advance and improving custom recommendation systems. Government will be the second-highest spender, followed by professional services and retail.
IDC senior market analyst Vinayaka Venkatesh said, "To keep up with the changes in the digital environment, more than half the organisations surveyed in Australia are planning to increase their AI spend in 2022."
"Organisations have responded more firmly to the changes caused by the pandemic, increasing their use of AI to improve customer service, business processes, and digital assistance."
The top five use cases identified were augmented customer service agents, augmented threat intelligence and prevention systems, digital assistants, program advisors and recommendation systems and smart business innovation and automation. All five are used in the banking, financial services and insurance (BFSI) industry to reduce risk, make better decisions and provide a better customer service experience.
IDC said the five currently account for $750 million, or 40 percent of total AI spending, and the amount is expected to grow to 1.4 billion by 2025.
Software will be the leading technology, accounting for some 52.2 percent of AI spending. Within that, the largest areas of investment will be in AI applications and artificial intelligent platforms, accounting for more than 57.2 percent of total AI software spending, and the remaining will be spent on AI system infrastructure software and AI application development and deployment.
Services is the second most important technology, which will account for 29.5 percent of total AI spending, and the remaining 18.4 percent will go towards hardware.