Worldwide spending in the artificial intelligence market is set to grow 19.6% year-over-year in 2022 to $432.8 billion on its way to breaching the $500 billion mark by 2023, according to a new IDC report.

Spending on AI software remains dominant at 88.3% for this year, although its share has been slightly declining as hardware and services gain ground. Nearly half of funds spent on software were for applications while 35% were for system infrastructure software.

Within software, platforms will be the fastest growing (34.6% CAGR) while the slowest is system infrastructure software at 14%.

IDC expects AI services to see the fastest spending growth at a compound annual growth rate (CAGR) of 22%. Hardware is set to grow by 20.5%.

Within AI services, IT enjoyed 20.4% year-over-year growth in the first half of 2021 with worldwide spending reaching $18.4 billion. IDC forecasts this to improve to 22% in 2022 and remain there through the end of the forecast period.

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