China's Artificial Intelligence Market to Surpass $26.7 Billion by 2026, IDC Says

China’s Artificial Intelligence Market to Surpass $26.7 Billion by 2026, IDC Says

SINGAPORE, October 4, 2022 — IDC recently released the IDC Global AI Spending Guide. Data shows that the total global IT investment in artificial intelligence (AI) in 2021 was US$92.95 billion, and is expected to reach US$301.43 billion in 2026, and the growth rate annual compound (CAGR) was approximately 26.5%. Regarding the Chinese market, IDC predicts that Chinese investment in AI is expected to reach US$26.69 billion in 2026, or about 8.9% of global investment, ranking second in the world among other countries. . In recent years, more and more enterprises have embraced the Digintelligence era and started the deployment of digital transformation (DX) and intelligent upgrading, thus creating an increased demand for AI. . Driven by policies, technologies and markets, AI empowerment industries are becoming a mainstream development trend.

Technological dimension

In the next five years, the hardware market will be the largest primary market in China’s AI market, accounting for more than half of total AI investment. IDC predicts that China’s IT investment in the AI ​​hardware market will exceed US$15 billion in 2026, nearly the size of the US AI hardware market. With the gradual improvement of AI infrastructure construction, hardware growth will gradually slow down, with the five-year CAGR remaining around 16.5%. The server market, as the main part of the hardware market, will account for more than 80% over the five-year forecast period.

At the same time, the services market will grow at a faster pace, with a five-year CAGR expected to be around 29.6%. Total investment in the services market is expected to exceed US$4 billion in 2026, almost four times the investment in 2021, with significant market growth. The AI ​​services market as defined by IDC is primarily dominated by the IT services segment. IDC predicts that IT services will lead the services market growth with a five-year CAGR of 31.0%.

From the perspective of AI software, under the joint promotion of the gradual development of technologies such as machine learning (ML) and computer vision, China’s policy environment and gradually diversified needs customers, China’s AI software market share will increase year by year, and more than 25% of IT investment related to the AI ​​market will be devoted to software in 2026. In terms of growth rate , the AI ​​software market will become the fastest growing primary market over the five-year forecast period, with a CAGR of approximately 30.4%. From a technology segment perspective, AI platforms will absorb more than 70% of software spending over the next five years and become a significant driver of software market growth with a CAGR of 33.1% over the next five years. five years.

Industrial application

IDC predicts that user spending on AI across the four major industries – professional services, government, finance, and telecommunications – will continue to lead over the five-year forecast period, which will collectively exceed 60% of the total expenditure of China’s AI market. Specifically, local governments. AI spending will drive AI investment growth with a five-year CAGR of 24.3% and is expected to exceed US$2.51 billion in 2026; and central government is expected to grow at a five-year CAGR of 19.4% and reach US$1.37 billion in 2026. The market size of the financial sector represented by banks will continue to grow during the next few years, with the five-year CAGR expected to exceed 21.0%. In addition, the construction, discrete manufacturing and healthcare industries have also achieved high growth rates, jointly promoting the development and application of Chinese AI. In the future, AI will be applied in various industries, expanding both in breadth and depth. It will further effectively support industries to achieve smart marketing and decision-making. At the same time, the deep integration of AI with industries will stimulate more potential and foster more business opportunities.

Use case

Based on research conducted on the previously mentioned industries, IDC’s Global AI Spending Guide covers 29 key typical AI use cases, which will be updated to reflect market dynamics. Three use cases—augmented customer service agents, public safety and emergency response, and intelligent business innovation and automation—will continue to dominate. The three together will account for more than 30% over the five-year forecast period. Currently, there are mature applications of AI in various industry use cases. It complements independent learning of judgment and behavior through technologies such as deep learning, computer vision and image recognition, to solve a variety of complex tasks, thus laying an important foundation for transformation smart industry. In use cases, customer service agents are growing rapidly, with cases in finance, retail, and other industries. Public safety and emergency response are primarily in the realm of government security, and biometrics are used for fingerprint and face recognition. In the future, with the increasing development of AI chips, 5G and other technologies, AI will also be better implemented in more areas.


About IDC’s Spending Guides

IDC’s Spend Guides provide a granular view of top technology markets from a regional, industry vertical, use case, buyer, and technology perspective. Spend Guides are delivered via a pivot table format or a custom query tool, allowing the user to easily extract meaningful insights into each market by visualizing data trends and relationships.

For more information on IDC’s spending guides, please contact Vinay Gupta at or Xueqing Zhang at

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About IDC

International Data Corporation (IDC) is the world’s leading provider of business information, consulting 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 and industry opportunities and trends in more than 110 countries. IDC’s analysis and insight help IT professionals, business executives, and the investment community make fact-based technology decisions and achieve their key business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world leader in technology media, data and marketing services. To learn more about IDC, visit Follow IDC on Twitter at @IDCAP and LinkedIn. Subscribe to the IDC blog for industry news and insights.


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