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IDC Foresees Asia’s Top Companies Allocating Over 50% of IT Budget to AI by 2025

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The landscape of corporate technology investment is poised for a groundbreaking transformation as the latest FutureScape report from IDC unveils compelling insights. Titled “IDC FutureScape: Worldwide Artificial Intelligence and Automation 2024 Predictions—Asia/Pacific (Excluding Japan) Implications,” the report predicts a paradigm shift, indicating that by 2025, the top 1000 organizations in Asia (A1000) will dedicate more than 50% of their core IT expenditure to AI initiatives.

Over the last few years, artificial intelligence has ushered in a wave of transformative innovation, reshaping both product development and operational processes. This shift has fundamentally altered how enterprises operate, meet customer demands, and enhance employee productivity. In the realm of product innovation, AI empowers organizations to create and deliver highly personalized products and solutions based on customer preference data.

According to IDC’s Future Enterprise Resiliency and Spending Survey in March 2023, 46% of respondents in North America are currently investing in or exploring potential Generative AI (GenAI) use cases. This number rises significantly to 70% in Asia/Pacific and 76% in EMEA.

Ensuring AI security and compliance is at the forefront for technology vendors and users. Cloud and software platform providers are proactively incorporating GenAI safety measures into their offerings to collectively mitigate IT risks.

Here are some additional AI-driven predictions for 2024 and beyond:

  • Enhanced AI Security: By 2026, 70% of cloud and software platform providers in Asia Pacific will integrate GenAI safety and governance packages into their primary services, reducing GenAI risk scenarios by threefold.
  • Global AI Rules Challenge: By 2027, regulatory differences across geographies will pose significant challenges for A2000 companies, increasing implementation time and effort for sensitive use cases by up to 20%.

Digital assistants have emerged as pivotal players in efforts to improve productivity and the employee experience. As businesses seek knowledge, generative AI and retrieval-augmented generation (RAG) can enhance self-service knowledge discovery and decision-making.

  • Digital Assistants’ Popularity: By 2027, GenAI digital assistants are expected to be the user interface for 30% of interactions with enterprise software in A1000, covering software development and playing a vital role in operating business processes like customer engagement.
  • Smart Knowledge Discovery: By 2026, two-thirds of A1000 businesses will leverage a combination of generative AI and RAG for domain-specific self-service knowledge discovery, resulting in a 40% improvement in decision-making.

As AI technologies continue to evolve across industries, they promise to unlock vast economic potential and drive societal change. With the ability to optimize processes, streamline operations, and foster innovation, AI is expected to lead to productivity gains, 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 redirect resources toward innovation and new business opportunities.
  • Outcome-Driven Automation: After a temporary focus on GenAI, 70% of A1000 enterprises are expected to shift focus to outcome-based automation strategies rather than specific technologies by 2025.
  • Business Revolution: By 2025, 10% of A1000 companies are anticipated to exploit innovative business models, doubling their monetization potential of generative AI.
  • Societal Impacts of AI: By 2028, 10% of A1000 companies are expected to experiment with AGI (artificial general intelligence) systems, presenting both transformative opportunities and threats to society.

A robust infrastructure and computing power are crucial for AI to thrive. Looking ahead to 2027, a significant shift in spending patterns on server accelerators compared to server CPUs is projected, marking a transformative shift in the AI hardware landscape.

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

Dr. Lily Phan, Research Director, Intelligent Automation at IDC Asia/Pacific, emphasizes, “IDC’s FutureScape predicts that AI and automation technologies will remain central to tech investment initiatives. They are needed to lower operational costs, reduce staffing pressure, revamp the end-user experience, and democratize decision-making power. The adaptability and efficiency offered by AI and automation solutions can provide the technologies that can mitigate staff shortages and economic challenges.”

IDC annually releases its top technology predictions at worldwide, regional, and country levels through its FutureScape Reports, shaping the strategies and business objectives of technology leaders and business executives for the next 1–5 years. All predictions mentioned cover Asia-Pacific implications.

For those eager to delve deeper into IDC’s 2024 predictions, an on-demand replay of the presentation is available as part of a series of FutureScape webinars covering the IT industry, AI and automation, Digital Business, CIO Agenda, and Emerging Technologies. To attend these webinars, register and learn more HERE.

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