European spending on AI systems is forecast to jump from $25,4-billion in 2022 (up 27,8% from 2021) to more than $72,9-billion in 2026, according to the new Worldwide Artificial Intelligence Spending Guide from International Data Corporation (IDC).

The compound annual growth rate (CAGR) for 2021-2026 will be 29,6%. Germany, Spain, and the UK — the fastest-growing markets in Europe — will drive growth in 2021-2022.

The AI market is more resilient to the current macroeconomic events than other technologies. AI technologies and software are helping companies to build efficiency through automation and contribute to a safer operational environment.

“AI is a strategic investment for European companies that are focusing on productivity and automation solutions and looking for new ways to deliver business value,” says Carla La Croce, research manager at IDC Italy. “In addition, the European Union is playing a key role in boosting research and industrial capacity around AI, with the Commission and member states working together on policy and investments that will leverage the Recovery and Resilience Facility.”

Software technologies are driving spending on AI in Europe, with AI applications accounting for the highest share until 2023, which are focused more on longer-term innovation and product/service creation use cases. AI platforms will gain share from 2023; this is the fastest-growing category and includes AI life-cycle software, AI software services, and intelligent knowledge discovery software.

Banking, manufacturing, and retail will spend the most on AI solutions over the five-year forecast period, accounting for almost half of total spending. Professional services, healthcare, and insurance will have fastest growth in the long term.

Banking will invest in fraud analysis and investigation, along with augmented threat intelligence and prevention system, given the increasing cybersecurity risks.

Manufacturing will focus on maintenance by investing in automated preventative maintenance and quality management investigation and recommendation systems.

Retail will focus on customer and automation, investing in augmented customer service agents as well as sales process recommendation and augmentation and smart business innovation and automation.