China's top firms to increase AI spending, predicts IDC

International Data Corporation (IDC) predicts that the top 2000 companies in China will dedicate over 50% of their core IT budget to artificial intelligence (AI) initiatives by 2027, potentially causing a double-digit rise in the rate of product and process innovations.

These forecasts were shared during the IDC FutureScape China event in Beijing, where industry leaders were provided with emerging technology predictions to help drive their digital business strategies.

This year's theme, "Mastering AI Everywhere in Digital Business Era", underlined IDC's assertion that international spending on AI solutions is expected to skyrocket to more than $500 billion in 2027, causing fundamental changes to the IT sector and influencing operational decision-making within businesses. Kitty Fok, Managing Director at IDC China, emphasised that this AI focus marks a turning point in technology, business, and society.

Fok also elaborated on how IDC's proprietary data, which covers over 120 technology markets in 100 countries, provides the critical guidance businesses need to win in an increasingly automated world. Much of this potential success hinges on a deeper understanding of customer needs and business models, according to Lianfeng Wu, Vice President and Chief Research Analyst at IDC China. Wu suggested that business leaders must reinforce their brand and AI-driven value delivery mechanisms to meet these evolving demands.

Wu also illustrated three new realities in the Chinese market: the variations of digital application across industries, population growth approaching a decisive turning point, and the impending era of a technological revolution.

Zhenshan Zhong, Vice President, IDC China, further highlighted that the rise in IT spending on AI initiatives will prompt tech providers to allocate 40% of their research and development, staffing, and CAPEX investments towards AI/automation through to 2026.

This increased investment in AI, according to Zhong, might pose difficulties for CIOs trying to reconcile new use cases with their IT operations preferences and vendor selection.

Meanwhile, the current progress of AI technology and intelligent computing power in China, along with the opportunities and challenges for AI utilisation in the finance, government, and manufacturing sectors, were discussed by fellow IDC analysts.

Every year, IDC releases its top technology predictions at global, regional and country levels through the IDCFutureScape reports. The predictions aim to shape the strategies and business objectives of technology leaders and business executives over the next one to five years. In the rapidly changing IT industry, these reports are designed to provide a forward-looking view which equips business leaders with relevant and timely insights.