European AI market will grow by 25% in the next five years, IDC

clock • 2 min read
European AI market will grow by 25% in the next five years, IDC
Image:

European AI market will grow by 25% in the next five years, IDC

Analyst firm expects AI's total addressable market to reach $191bn by 2026

The European AI market is set to carry on the upward trajectory in the upcoming years, says analyst firm IDC, claiming that in the 2022-2026 period the market will see a 25.5% CAGR.

The IDC Worldwide Semi-annual Artificial Intelligence Tracker also reports that other areas of the market such as AI services, non-AI-centric software and AI hardware will log more moderate growth - respectively at 27.2%, 16.7% and 15.2%.

IDC expects AI's total addressable market to reach $191 billion by 2026.

Senior research manager at IDC, Martin Nuska, commented on the results saying: "The next five years will represent a crucial period in the commercial adoption of AI software, as many companies and governments are now investing more to make their processes more agile, efficient, and resilient."  

He spotlighted that innovative AI models will have the potential to drive business value, which include deep learning-based language models, generative adversarial networks (GANs), and various models for digital twins.

AI's 'price premium' and a possible solution to the skills gap

Inflation, recession and labour shortages will take a hit on investments, particularly for AI infrastructure. This is because AI infrastructure usually comes at a price premium. However, IDC claims that the market for AI servers/storage in Europe will show a slow but steady growth pattern during the recast period.

The IDC report shows demand for AI solution from professional services providers to continue growing despite the economic challenges, which IDC claims will be due to the market's resilience shown during the pandemic.

Areas such as AI-enabled analytics computer vision, natural language processing and AI-driven process automation can help businesses to deal with price inflation, labour shortages, and the need to stay competitive.

"Europe faces a potential recession, while the labour market is marked by contradictory forces - a shortage of skilled workers in certain tech areas on one hand, while on the other even the biggest tech companies like Amazon, Google and Microsoft are laying off tens of thousands of workers," continued Nuska.

"We expect the AI market to continue performing strongly nevertheless, because of the technology's potential for long-term cost optimisation and as a possible solution to the skills gap."

This article first appeared on Computing's sister site CRN UK.

You may also like
Lenovo: Liquid cooling means 30% less energy used

Datacentre

Shifting is 'not as complicated as people may believe', says Lenovo UK&I ISG head Ian Jeffs

clock 20 June 2024 • 4 min read
Arm tries to block Copilot+ PC lauch

Law

Part of an ongoing dispute with Qualcomm

clock 18 June 2024 • 2 min read
Ctrl Alt Lead: Computing's new IT leader interview podcast

Leadership

A quick and efficient way to learn from the best

clock 17 June 2024 • 2 min read

Sign up to our newsletter

The best news, stories, features and photos from the day in one perfectly formed email.

More on Strategy

All change? The CIO challenge in the next five years

All change? The CIO challenge in the next five years

The new CIO is one who shapes strategy, rather than having it forced upon them

Ankur Anand
clock 30 April 2024 • 5 min read
How to manage a business during hyper growth

How to manage a business during hyper growth

IT leadership helped double production and sales

Samara Lynn
clock 29 April 2024 • 2 min read
Asian Tech Roundup: Australia's and India's encryption backdoor plans

Asian Tech Roundup: Australia's and India's encryption backdoor plans

Plus, China and Japan in race to put humans on the moon again

clock 19 April 2024 • 4 min read