India's AI spending to grow at 30.8% CAGR to $880.5 million in 2023: IDC

India's AI (artificial intelligence) spending is expected to grow at a CAGR of 30.8 per cent to touch $880.5 million (around Rs 6,490.6 cr) in 2023, research firm IDC said on Wednesday

India's AI (artificial intelligence) spending is expected to grow at a CAGR of 30.8 per cent to touch USD 880.5 million (around Rs 6,490.6 cr) in 2023, research firm IDC said on Wednesday.

"Enterprises are relying on AI to maintain business continuity, transform how businesses operate and gain competitive advantage. India's AI spending will grow from USD 300.7 million in 2019 to USD 880.5 million in 2023 at a CAGR (Compound annual growth rate) of 30.8 per cent," as per IDC's Worldwide Artificial Intelligence Spending Guide Forecast.

Rishu Sharma, Principal Analyst (Cloud and AI) at IDC in India, said COVID-19 is pushing the boundaries of organisations' AI lens.

"Businesses are considering investments in intelligent solutions to tackle issues associated with business continuity, labor shortage, and workspace monitoring. Organisations are now realising that their business plans must be closely aligned with their AI strategies," Sharma added.

The report cited IDC's 2019 Cognitive AI Adoption Survey to state that almost 20 per cent of enterprises are still devising AI strategies to explore new businesses and ventures.

Data trustworthiness and difficulty in selecting the right algorithm are some of the top challenges that hold organisations back from implementing AI technology.

"The variety of industry-specific tech solutions supported by emerging technologies like Internet of Things (IoT), Robotics, Blockchain, etc. are getting powered by complex AI algorithms and are cloud-enabled to reach their max potential.

In India, BFSI and manufacturing verticals are the two biggest spenders of AI across different use cases making almost 37 per cent of the AI spending in 2019, Ashutosh Bisht, Senior Research Manager for IDC's Customer Insights and Analysis group, said.

He added that with the fast adoption of cloud technologies in India, more than 60 per cent of AI applications will be migrated to the cloud by 2024.