Australia’s Spending on Artificial Intelligence (AI) to Double to $3.6 Billion by 2025, Says IDC

AUSTRALIA, Sydney, – According to IDC’s latest Worldwide Artificial Intelligence Spending Guide, Australia’s spending on AI systems will grow to $3.6 billion in 2025, representing a compounded annual growth rate of 24.4% for the period of 2020-25. Organisations have increased their investment in artificial intelligence (AI) to keep up with the changing digital environment, which aids in better business decision-making and customer service.

“In Australia, we continue seeing a rapid adoption of artificial intelligence systems across various industries, indicating strong demands from Australian organisations in streamlining of core business processes and maximise the power of their organisational data,” says Anastasia Antonova, Senior Market Analyst, Data and Analytics, IDC Australia. “It is going to be very importnant for Australian businesses to continue investing in AI tools and platforms to support decision-making, become more digitally resilient, innovative and be one step ahead from competitors”, she added.


With a five-year CAGR of 23.1% banking will be the leading industry in AI spending. The primary goal is to prevent fraud, identify threats advance, and improve the custom recommendation system. The federal/central government is the second-highest spender on AI solutions, with a focus on detecting, monitoring, and responding to personnel and infrastructure threats. Professional Services and retail are the next highest-spending industries. The primary focus area of professional services is to provide better digital assistance by self-regulating and automating mundane software maintenance activities. Retail industries are focusing on improved customer service, expert shopping advisors, and product recommendations, as well as optimized digital supply chain operations.

“To keep up with the changes in the digital environment, more than half the organisations surveyed in Australia are planning to increase their AI spend in 2022,” says Vinayaka Venkatesh, Senior Market Analyst at IDC IT Spending Guides, Customer Insights & Analysis. “Organisations have responded more firmly to the changes caused on by the pandemic, increasing their use of AI to improve customer service, business processes, and digital assistance”, he added.


The top five use-cases currently account for $0.75 billion, or 40% of total AI spending, and are expected to grow to 1.4 billion by 2025. Investments are directed in augmented customer service agents, augmented threat intelligence and prevention systems, digital assistants, program advisors and recommendation systems, and smart business innovation and automation. These solutions are widely used in the BSFI industry to reduce risk, make better decisions, and provide a better customer service experience. State and federal governments are investing more than 30.5% of total AI spending in Augmented Threat Intelligence and Prevention Systems to identify emerging personal and infrastructure threats and improve public safety.

The leading technology will be software, accounting for more than 52.2 % of AI spending; the largest areas of investment will be in AI applications and Artificial Intelligent Platforms, accounting for more than 57.2 % of total spending, while the rest will go toward AI System Infrastructure Software and AI Application Development & Deployment. The second most important technology is services, which will account for 29.5 % of total AI spending; IT services will account for more than 73.5 % of total spending, with the remainder going to business services. The rest of the spending goes towards hardware with a share of 18.4% of total AI Spending.

The Worldwide Artificial Intelligence Spending Guide  sizes spending for technologies that analyze, organise, access, and provide advisory services based on a range of unstructured information. The Spending Guide quantifies the AI opportunity by providing data for 29 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: The IDC Worldwide Artificial Intelligence Spending Guide  uses a very 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 Spending Guide to focus on those software applications that are strongly AI Centric. In comparison, the IDC Worldwide Semiannual Artificial Intelligence Tracker  uses a broad definition of AI Applications that includes applications where the AI component is non-centric, or not fundamental, to the application. This enables the inclusion of vendors that have incorporated AI capabilities into their software, but the applications are not exclusively used for AI functions only. In other words, the application will function without the inclusion of the AI component.

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