Asia/Pacific AI Spending to Reach $175 Billion by 2028, Driven by GenAI Boom

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According to the IDC Worldwide AI and Generative AI Spending Guide, the Asia/Pacific region, including China and Japan, is experiencing unprecedented growth in Artificial intelligence (AI) and generative AI (GenAI) investments, spanning software, services, and hardware designed for AI-driven systems. AI and GenAI investments in the region are expected to reach $175 billion by 2028, with a compound annual growth rate (CAGR) of 33.6% from 2023 to 2028. Meanwhile, GenAI investments alone are forecasted to hit $54.5 billion by 2028, with a remarkable CAGR of 59.2%, accounting for approximately 31% of the total AI and GenAI market.

This surge in AI and GenAI investment highlights Asia/Pacific’s growing strategic role in shaping the global AI landscape. As businesses transition from experimentation to operational integration, AI is being embedded across critical functions — from customer engagement and decision-making to automation and cybersecurity. The rapid acceleration reflects the region’s commitment to digital transformation, with GenAI emerging as a catalyst for intelligent automation, innovation at scale, and new revenue models.

“In 2024, there was a notable surge in AI infrastructure spending as companies in the Asia/Pacific region began entering the AI development phase,” Deepika Giri, head of research, Big Data & AI, IDC APJ. “Looking ahead, 2025 will be the year of unified AI platforms that support AI agents — integrated frameworks that support the full lifecycle of AI models, including GenAI, predictive, prescriptive, and other emerging models. These platforms will connect applications, data, infrastructure, and governance, offering a more standardized and scalable approach to AI deployment.”

Industries across Asia/Pacific are rapidly adopting AI and GenAI to enhance efficiency, personalize customer experiences, and gain a competitive edge. The software and information services sector is leading the charge, accounting for over 40% of total AI spending in 2025, driven by demand for AI infrastructure and development platforms. Financial services, especially banking, are leveraging AI to boost operational efficiency, improve fraud detection, and deliver hyper-personalized services. Meanwhile, the telecommunications and retail sectors are accelerating digital transformation with AI and GenAI — enhancing network efficiency, security, customer service, logistics, and inventory management to meet evolving consumer expectations in an increasingly digital-first market.

"AI adoption across Asia/Pacific is fostering smarter and more resilient business environments. Companies are integrating AI to enhance efficiency, reduce costs, and strengthen strategic decision-making," says Vinayaka Venkatesh, senior market analyst, Data & Analytics, IDC Asia/Pacific. "This shift toward AI-driven solutions is laying the foundation for a future centered on intelligent automation and continuous innovation," he further noted.

Key drivers behind AI and GenAI investments in the Asia/Pacific region include an increasing demand for robust digital infrastructure, evolving customer expectations aimed at boosting operational efficiency and reducing costs, and a heightened need for improved security and real-time analytics. These factors are rapidly reshaping industries throughout the region, with leading use cases clearly demonstrating the extensive impact of these technologies.

AI infrastructure provisioning is a foundational use case, encompassing investments in hardware, cloud computing, and data center capabilities to support AI applications. This segment accounts for nearly 37% of the overall market share for AI and GenAI use cases. Additionally, AI-driven chatbots and virtual assistants provide round-the-clock support and self-service options, while AI tools are enhancing call center operations and field service management, thereby improving customer service functions across industries to meet rising expectations.

Furthermore, AI applications in national security, such as surveillance, threat detection, and intelligence gathering, are helping government agencies modernize defense capabilities and ensure national security. Similarly, AI solutions that support emergency response efforts enhance situational awareness through real-time data and improve coordination during crises, contributing significantly to public safety.

The Worldwide AI and Generative AI Spending Guide sizes spending for technologies that analyze, organize, access, and provide advisory services based on a range of unstructured information. The Spending Guide quantifies the AI opportunity by providing data for 42 use cases across 27 industries in nine regions and 31 countries. Data is also available for the related hardware, software, and services categories.