AI spending to touch $5 billion by 2027AI spending to touch $5 billion by 2027

Virendra Singh Rawat

Riding the global artificial intelligence (AI) boom, the AI spending in India is expected to grow at a compound annual growth rate (CAGR) of 31.5 percent from 2023 and breach the $5 billion mark by 2027.

The projections have emerged in a joint study released on Tuesday by Intel and International Data Corporation (IDC).

The growth in India’s AI spending is set to be the fastest among the eight markets surveyed viz. Australia, India, Indonesia, Japan, South Korea, Malaysia, Singapore and Taiwan.

The AI software sector will be the primary driver of overall market growth, reaching $2.6 billion by 2027.

Per report, entities in India spent almost $1,704 million on AI in 2023, with banking, financial services and insurance (BFSI), manufacturing, healthcare, telecommunications, and retail being the highest spending sectors during the year.

If one looks at the overall AI spending across the globe, 50 percent of it is coming from the US.

The report said India is improving its AI infrastructure, and hence, the highest spending is on AI infrastructure provisioning.

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