New Delhi, Oct 21 (IANS): Global spending on generative AI (GenAI) software and solutions is expected to reach $143 billion in 2027 with a compound annual growth rate (CAGR) of 73.3 per cent, according to a new report.

This is more than twice the rate of growth in overall AI spending and almost 13 times greater than the CAGR for worldwide IT spending over the same period.

The forecast from International Data Corporation (IDC) shows that enterprises will invest nearly $16 billion worldwide on GenAI solutions in 2023.

This spending includes GenAI software as well as related infrastructure hardware and IT/business services.

"Generative AI is more than a fleeting trend or mere hype. It is a transformative technology with far-reaching implications and business impact," says Ritu Jyoti, group vice president, worldwide AI and automation market research and advisory services.

With ethical and responsible implementation, GenAI is poised to reshape industries, changing the way we work, play, and interact with the world,” she added.

IDC expects GenAI investments to follow a natural progression over the next several years as organisations transition from early experimentation to aggressive build out with targeted use cases to widespread adoption across business activities.

"The rate of GenAI spending will be somewhat constrained through 2025 due to turbulence in workload shifts and resource allocation, not just in silicon but also in networking, facilities, model confidence, and AI skills," said Rick Villars, group vice president, worldwide research at IDC.

By the end of the forecast period, GenAI spending will account for 28.1 per cent of overall AI spending, up significantly from 9 per cent in 2023. "GenAI infrastructure, including hardware, Infrastructure as a Service (IaaS), and system infrastructure software (SIS), will represent the largest area of investment during the build out phase," the report noted.