China’s spending on AI systems will pass $26.7 billion by 2026, accounting for about 8.9% of the world’s total
Chinese article by 陈兴华
English Editor WM Zhang
09-20 17:05

By Greg Gao

China’s spending on artificial intelligence (AI), including software, hardware, and services for AI-centric systems, will reach nearly $26.7 billion by 2026, accounting for about 8.9% of the world’s total, a new forecast from the market intelligence provider International Data Corporation (IDC) released on September 14. 

The global spending on AI will reach nearly $118 billion in 2022 and surpass $300 billion in 2026. China will be the second largest AI market by country after the U.S., with a growth rate of 21.1%, showed IDC’s Worldwide Artificial Intelligence Spending Guide.

The ongoing incorporation of AI into a wide range of products will drive a compound annual growth rate (CAGR) of 26.5% over the 2022-2026 forecast. This is more than four times greater than the five-year CAGR of 6.3% for worldwide IT spending over the same period.

The report pointed out that in the next five years, the hardware will be the most significant primary sub-market for China’s AI industry, accounting for more than half of the total investment in AI. The scale of IT investment in China’s AI hardware market will exceed $15 billion in 2026, close to the size of the U.S. AI hardware market.

With the improvement of AI infrastructure construction, the growth rate of AI hardware will gradually slow down, and the CAGR of the Chinese market in the next five-year is expected to remain around 16.5%. The server market, a main sector of the hardware market, will account for more than 80%, and the CAGR is expected to be about 29.6%.

In terms of growth rate, AI software will become the fastest growing primary sub-market during the five-year forecast period, with a CAGR of about 30.4%. Artificial intelligence platforms will absorb more than 70% of software-related expenditures, and become an important driver of software market growth with an expected CAGR of 33.1%.

Professional services, government, banking, and telecommunications are the four industries that will deliver the largest AI investments in China over the forecast period. Together, the four industries will account for more than 60% of all AI spending in China, the report showed. 

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