AI Spending in India Projected to Surge Threefold to USD 5 Billion by 2027

India's AI spending may reach $5 billion by 2027, with current spending at $1.7 billion. Major investments are in AI infrastructure, customer service, digital assistance, threat intelligence, and recommendation systems. Industry experts believe India is poised for AI adoption due to its large data production and skilled workforce.

Spending on Artificial Intelligence (AI) in the country may triple to USD 5 billion by 2027, an Intel-IDC report released on Tuesday said.

According to the report, entities in India spent USD 1,703.8 million on AI in 2023.

''AI spending in India is expected to increase to USD 5 billion with CAGR (compound annual growth rate) of 31.5 per cent between 2023 to 2027. By 2027 AI will be everywhere,'' Sharath Srinivasamurthy, Associate Vice President, IDC said.

He said that in 2023, major spending of USD 209 million was driven by AI infrastructure provisioning and related software.

It was followed by augmented customer service agents at USD 168.8 million, digital assistance USD 113.1 million, augmented threat intelligence USD 100.1 million and program advisors recommendation systems USD 97.1 million.

''The infrastructure provisioning will continue to be the biggest contributor in overall spent,'' Srinivasamurthy said.

Intel India Region Vice President and Managing Director, Santhosh Viswanathan said India is ready for AI as around 20 per cent of the world's data is produced in the country and it is the third biggest global market.

Viswanathan said India leads globally in terms of technical skill availability.