APAC Region Witnessing Massive Surge in GenAI Adoption: Projected to Soar $26bn by 2027


China is projected to maintain its position as the dominant market for GenAI, while Japan and India are set to become the most rapidly expanding markets in the forthcoming years.

A new survey report by global research firm IDC has now revealed that the Asia/Pacific region is witnessing an unprecedented surge in Generative AI (GenAI) adoption, including software, services, and hardware for AI-centric systems with spending projected to soar to $26 billion by 2027, with a compound annual growth rate (CAGR) of 95.4 percent for the period 2022-2027. This surge underscores the region's pivotal role in driving the next wave of AI innovation and technological advancement.

GenAI is a branch of computer science involving unsupervised and semi-supervised algorithms that enable computers to create new content using previously created content, such as text, audio, video, images, and code, in response to short prompts. IDC believes GenAI will be a trigger technology to transition to a new chapter in the move toward automation for both internal and external parties across generic productivity, business function–specific enhancements, or industry-specific tasks.

We anticipate that Asia/Pacific will experience a surge in the adoption of Generative AI, with growth rates expected to match those of North America, largely due to enterprises investing heavily in developing data and infrastructure platforms tailored for GenAI applications. We forecast that this investment in GenAI will reach its zenith within the next two years, followed by a period of stabilization. China is projected to maintain its position as the dominant market for GenAI, while Japan and India are set to become the most rapidly expanding markets in the forthcoming years,” Deepika Giri, Head of Research, Big Data & AI, IDC APJ.

Unlocking the vast potential of GenAI, the Asia/Pacific region is poised for a transformative journey across various sectors. With robust digital infrastructure and growing investments in technology, Asia/Pacific emerges as a pivotal player in this dynamic landscape. Strategic investment in hardware, software, and associated services for GenAI is crucial to sustaining and propelling this progress. From software development to customer service, GenAI is revolutionizing industries, ushering in a new era of innovation in Asia/Pacific.

IT spending in GenAI technology progresses through three distinct stages. Initially, during the GenAI Foundation Build phase, attention is directed towards enhancing core infrastructure, investing in IaaS, and bolstering security software. Subsequently, in the Broad Adoption phase, the focus shifts towards the widespread adoption of open-source AI platforms offered as-a-service, playing a fundamental role in digital business control planes. Finally, the Unified AI Services phase sees a surge in spending as organizations rapidly integrate GenAI to gain a competitive edge, diverging from the typical slower growth observed in new technology markets.

"GenAI isn't a fleeting trend. Its capacity to generate entirely new content, across various mediums, such as images, videos, code, and marketing materials, promises substantial efficiency gains and paves the way for innovative creative opportunities, granting a competitive advantage," says Vinayaka Venkatesh, Senior Market Analyst, IT Spending Guides, Customer Insights & Analysis, IDC Asia/Pacific. "A significant portion of organizations have either already adopted Generative AI or are in the initial stages of experimenting with models," Vinayaka Venkatesh ends.