The Middle East & Africa Will See the World's Fastest AI Spending Growth Through 2026, According to Latest Forecast from IDC

Contact

• Sheila Manek  Email: smanek@idc.com  Phone number: +971 4 446 3154

Dubai – Spending on artificial intelligence in the Middle East and Africa (MEA) — including Israel — will reach $3.0 billion in 2023, according to the latest Worldwide Artificial Intelligence Spending Guide from International Data Corporation (IDC). While this will account for just 2% of the global total for 2023 ($151.4 billion), the region will see the fastest growth rate worldwide over the coming years, with IDC forecasting that AI spending in MEA will increase at a compound annual growth rate (CAGR) of 29.7% over the 2022–2026 period, reaching $6.4 billion in 2026.

"The rapid adoption of cloud and digital transformation in MEA will result in AI being incorporated into many different products and solutions," says Manish Ranjan, senior program manager for software, cloud, and IT services at IDC MEA. "Organizations across the region are investing in AI technologies and related software and services to drive greater efficiency through automation and contribute to a more agile operating environment. The effects of the pandemic have fueled further spending in relation to AI/ML adoption, particularly within the banking and finance, manufacturing, trade, healthcare, and government verticals."

Banking, retail, and federal/central government will be the MEA region's biggest spenders on AI in 2023, followed by discrete manufacturing. Together, these four industries will account for nearly half (44%) of the region's total AI spending in 2023. However, IDC expects professional services and transportation to be the fastest-growing industries over the five-year forecast periods, with respective CAGRs of 36.4% and 33.9%.

"AI growth in the region looks very promising as businesses are increasingly investing in AI- and analytics and business intelligence (ABI)-based solutions in order to strengthen and expand their customer experiences, build digital capabilities, and drive innovation," says Ranjan. "Augmented customer service agents, fraud analysis and investigation, augmented threat intelligence and prevention systems, and sales process recommendation and augmentation are the key business use cases where organizations are investing more in the market.

"Numerous challenges will accompany the region's increasing adoption of AI, with the most critical being the lack of skilled resources such as data scientists, data engineers, and AI modelers. However, the region has multiple initiatives in place aimed at upskilling local talent, with organizations in both the public and private sectors establishing partnerships to foster AI- and ML-specific learning."

IDC's Worldwide Artificial Intelligence Spending Guide  sizes spending for technologies that analyze, organize, access, and provide advisory services based on a range of unstructured information. It quantifies the AI opportunity by providing data for 36 use cases across 19 industries in nine regions and 32 countries. Data is also available for the related hardware, software, and services categories.

Taxonomy Note

IDC's Worldwide Artificial Intelligence Spending Guide uses a precise definition of what constitutes an AI application in which the application must have an AI component that is crucial to the application — without this AI component the application will not function. This distinction enables the guide to focus on those software applications that are strongly AI centric. In comparison, IDC's Worldwide Semiannual Artificial Intelligence Tracker  uses a broad definition of AI applications that includes both AI-centric applications and applications where the AI component is non-centric, or not fundamental, to the application. In other words, the application will function without the inclusion of the AI component. This enables the inclusion of vendors that have incorporated AI capabilities into their software, but where the applications are not exclusively used for AI functions only.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships. To learn about IDC's full suite of data products and how you can leverage them to grow your business, please click here  or contact Sheila Manek at smanek@idc.com  / +971 4 446 3154.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

IDC in the Middle East, Turkey, and Africa

For the Middle East, Turkey, and Africa region, IDC retains a coordinated network of offices in Riyadh, Nairobi, Lagos, Johannesburg, Cairo, and Istanbul, with a regional center in Dubai. Our coverage couples local insights with international perspectives to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 130 analysts, consultants, and conference associates across the region. To learn more about IDC MEA, please visit www.idc.com/mea. You can follow IDC MEA on Twitter at @IDCMEA.

Coverage