New Delhi, Countries in the Asia-Pacific region are set to spend $17.6 billion on artificial intelligence (AI) systems in 2022 and this is expected to reach $32 billion in 2025, a new IDC report has shown.

Over the next five years, the banking industry will continue to invest the most in AI solutions.

State/local government is the second-highest spender on AI solutions, focusing on public safety and emergency response, augmented threat intelligence, and prevention systems.

"Many of the changes caused by the pandemic will stay and we expect the adoption momentum of practical AI use cases such as remote or contactless engagement to continue," said Jessie Danqing Cai, Associate Research Director, Cognitive Computing/Artificial Intelligence for IDC Asia/Pacific.

In the long term, a clear guidance on the management of the associated risk factors of AI solutions will further boost the confidence level of buying organisations," Cai added.

Businesses invest in AI to gain a competitive advantage through improved customer insight, increased employee efficiency, and accelerated decision making.

IDC forecasts a compound annual growth rate (CAGR) of 25.2 per cent for the period 2020-2025.

For the next five years, the next top spending industry is professional services, growing fast with 26.6 per cent CAGR.

Smart business innovation and automation will optimise and streamline complex and repetitive business tasks to support organisational decision-making.

"Increasing government regulations and mandates of AI's trust, robustness, and its ethical use will need to be addressed by organisations," said Vinayaka Venkatesh, Senior Market Analyst at IDC IT Spending Guides, Customer Insights & Analysis.

Hardware will be the leading technology, accounting for more than 49.8 per cent of AI spending.

Software is the second leading technology with 31 per cent of AI spending.

Nearly 71 per cent of total AI spending in software goes towards AI applications and artificial intelligent platforms, the report noted.