China’s artificial intelligence (AI) market is on a trajectory that few economic forecasters would have predicted even a decade ago — and the numbers are now impossible to ignore. According to a landmark report from International Data Corporation (IDC), China’s AI market value is projected to reach US$26.44 billion (approximately RM114 billion) by 2026, signalling a seismic shift in how the world’s second-largest economy is positioning itself as a global technology powerhouse. For businesses, investors, and policymakers across Southeast Asia — including Malaysia — understanding this growth wave is no longer optional. It is essential.
China’s AI Spending Already Commands 10 Per Cent of Global Market Share
China’s rise in the artificial intelligence sector is not a future projection alone — it is already a present-day reality with measurable momentum. According to IDC’s report, China’s AI market spending was forecast to hit US$14.75 billion in 2023, representing approximately 10 per cent of the global total AI expenditure for that year.
For years, China has been an important presence in global technology development, channelling state-level investment and enterprise-level ambition into AI infrastructure, research, and deployment at scale. The country’s AI ecosystem spans natural language processing, computer vision, autonomous systems, industrial automation, and generative AI platforms — making its market breadth among the widest of any single nation.
IDC’s official certification of these figures through rigorous global market research methodology gives analysts and investors a dependable benchmark for assessing China’s AI trajectory with confidence.
China’s AI Growth Rate Directly Addresses the Global Race for Technology Leadership
The services and capabilities being built within China’s AI sector directly address practical problems long faced by industries worldwide — from healthcare diagnostics and supply chain optimisation to smart city infrastructure and financial risk modelling.
IDC projected the compound annual growth rate (CAGR) of China’s AI market to surpass 20 per cent during the 2021 to 2026 period. To put that in context, a sustained CAGR above 20 per cent over five consecutive years places China’s AI expansion among the fastest-growing technology sectors anywhere in the world during that timeframe.
This growth directly benefits enterprises seeking digital transformation solutions. IDC emphasised that enterprises’ enthusiasm for digital transformation will stimulate diversified demand within the Chinese market, enabling more everyday businesses — from small manufacturers to large financial institutions — to integrate AI-powered tools into their core operations. The community-level impact of this shift is substantial: more efficient logistics, smarter public services, and more accessible technology platforms for organisations of every size.
AI Technology Innovation Makes Advanced Capabilities Accessible Beyond Elite Institutions
It has come to light that the emphasis within China’s AI market is increasingly focused on making its services and innovations accessible to a broader range of users — not only to large corporations or state-backed enterprises.
IDC highlighted the importance of innovation and upgrading of AI technology in promoting better application scenarios across diverse sectors. This inclusive direction means that the benefits of AI development are not confined to a small number of elite technology firms. Manufacturers in second-tier cities, agricultural enterprises, healthcare providers in rural regions, and first-time adopters of digital tools are among the groups that stand to gain from the expanding accessibility of China’s AI ecosystem.
No high barriers to entry exist for enterprises seeking to adopt commercially available AI platforms, and the market’s diversification ensures that underserved industry segments can access practical AI solutions tailored to their operational realities.
IDC’s Independently Verifiable Research Gives Investors and Policymakers Assured Peace of Mind
Safety and accuracy are what community residents — and the broader business community — care about most when evaluating market forecasts of this magnitude. IDC, the International Data Corporation, is a globally recognised market intelligence firm whose research methodology is independently verifiable and widely cited by governments, multinational corporations, and financial institutions.
The figures cited in this report — US$26.44 billion in projected 2026 AI market value, US$14.75 billion in 2023 AI spending, and a CAGR exceeding 20 per cent from 2021 to 2026 — are drawn directly from IDC’s published research and reported by Xinhua, China’s state news agency. These are not estimates derived from speculative modelling; they represent data-backed projections from one of the world’s most established technology research organisations.
IDC’s long-standing service to the global research community, combined with its reputation for rigorous methodology, gives businesses and investors the assured peace of mind needed to make strategic decisions based on these projections.
Here’s What You Need to Know About China’s AI Market Growth
What is China’s projected AI market value by 2026? China’s AI market value is projected to reach US$26.44 billion, equivalent to approximately RM114 billion, by 2026, according to IDC’s market research report.
How much was China spending on AI in 2023? China’s AI market spending was forecast to reach US$14.75 billion in 2023, representing approximately 10 per cent of the total global AI market expenditure for that year.
What is the projected compound annual growth rate of China’s AI market? IDC projected the compound annual growth rate of China’s AI market to surpass 20 per cent during the 2021 to 2026 period, making it one of the fastest-growing technology sectors globally.
What is driving the growth of China’s AI market? Two primary drivers are identified in IDC’s report: the ongoing innovation and upgrading of AI technology that enables better real-world application scenarios, and enterprises’ enthusiasm for digital transformation, which stimulates diversified demand across the Chinese market.
How does China’s AI market compare globally? China’s AI spending accounted for approximately 10 per cent of the global total in 2023, positioning it as one of the dominant players in the worldwide artificial intelligence economy alongside the United States.
Which sectors benefit most from China’s AI expansion? China’s AI growth spans multiple sectors including industrial automation, healthcare, financial services, logistics, smart city infrastructure, and consumer technology platforms, with IDC noting that diversified enterprise demand is a key growth catalyst.
Where does this data come from and how reliable is it? These figures are sourced from a report published by IDC, the International Data Corporation, a globally respected market research firm. The data was reported by Xinhua and is independently verifiable through IDC’s published research outputs.
China’s AI Market Trajectory Demands Attention From Every Regional Stakeholder
China’s artificial intelligence sector is not approaching a tipping point — it has already crossed one. With AI market spending projected to hit US$26.44 billion (RM114 billion) by 2026 and a compound annual growth rate exceeding 20 per cent from 2021 to 2026, the scale and speed of this expansion carry direct implications for trade partners, technology investors, and policymakers across the region, including Malaysia.
For businesses and institutions seeking to understand where global AI investment is flowing, monitoring China’s AI market growth — as documented by IDC — provides an authoritative and data-backed reference point.
Source: IDC Global Market Research Report, as reported by Xinhua (Bernama), April 9, 2023.
