Retail and banking fueling the growth, according to a new IDC report

The projected spending on AI solutions in the U.S. is expected to jump up to $120 billion, double the current expenditure, by 2025, according to a recent report from the International Data Corporation (IDC). More than half of global AI spending is invested in the U.S.

"The greatest potential benefit for the use of AI remains its use in developing new business, and building new business models," said Mike Glennon, senior research manager with IDC's customer insights and analysis team. "However, existing businesses are hesitant to embrace this potential.”

The Worldwide Artificial Intelligence Spending Guide analyzes information based on metrics across 32 countries, nine regions, and 19 industries.

The largest industry for AI spending is retail while banking lands at a close second. Both industries account for almost 28% of all AI spending in the U.S., adding close to $20 billion to the total increase expected by 2025.

Augmented customer service agents as well as sales process recommendation and augmentation are the two largest AI cases measured in the IDC’s Spending Guide. These uses represent over 20% of the AI spending in the U.S.   

In the retail industry, the trend toward increased online shopping has had a significant impact on AI adoption. The segments focused on boosting customer spending represent almost 40% of AI spending in the sector.

The functional areas that contribute the most to fueling retail spending will receive the most investment. Those segments are expert shopping advisors and product recommendations, as well as the augmented customer service agents.

In the banking industry, there are three main focus areas depending on AI usage. One is security including augmented threat intelligence and prevention systems. Another is operations including fraud analysis and investigation. Lastly, customer service, including recommendations and program advisors, is important.

The three AI use cases experiencing the biggest growth are augmented claims processing, public safety and emergency response, and IT optimization. These segments are forecast to experience a five-year compound annual growth rate (CAGR) around 30%.

“The greatest opportunities to new market entrants that have no fear of change and can adapt easily to new ways of conducting business. The future for business is AI and those companies that can seize this opportunity could easily become the new giants," said Glennon.