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IDC: European AI Market will Grow by 25% in the Next Five Years

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IDC: European AI Market will Grow by 25% in the Next Five Years

The European AI market is set to carry on the upward trajectory in the upcoming years, says analyst firm IDC, claiming that in the 2022-2026 period the market will see a 25.5% CAGR.

The IDC Worldwide Semi-annual Artificial Intelligence Tracker also reports that other areas of the market such as AI services, non-AI-centric software and AI hardware will log more moderate growth – respectively at 27.2%, 16.7% and 15.2%.

IDC expects AI’s total addressable market to reach $191 billion by 2026.

“The next five years will represent a crucial period in the commercial adoption of AI software, as many companies and governments are now investing more to make their processes more agile, efficient, and resilient.”

Martin Nuska, Senior Research Manager, IDC

Inflation, recession and labor shortages will take a hit on investments, particularly for AI infrastructure. This is because AI infrastructure usually comes at a price premium. However, IDC claims that the market for AI servers/storage in Europe will show a slow but steady growth pattern during the recast period.

“Europe faces a potential recession, while the labor market is marked by contradictory forces – a shortage of skilled workers in certain tech areas on one hand, while on the other even the biggest tech companies like Amazon, Google and Microsoft are laying off tens of thousands of workers. We expect the AI market to continue performing strongly nevertheless, because of the technology’s potential for long-term cost optimization and as a possible solution to the skills gap.”

Martin Nuska, Senior Research Manager, IDC

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