Costly AI Apps Drive up Cloud-Computing Spending

Business spending on cloud computing is rising in double digits as chief information officers and other tech leaders employ advanced features such as artificial intelligence that cost more than regular business applications, according to new market data. 

According to industry analysts, in addition to the inherent cost of the technology itself, which is usually purchased as a subscription, many of these applications tend to consume processing power, increasing cloud usage bills.

Companies around the world are expected to spend an estimated $494.7 billion on cloud computing this year, up 20% from 2021, to reach $600 billion by the end of 2023, according to information technology research and development agencies.

Spending on cloud-based platform services used to build, test, deploy, and update enterprise software applications, such as advanced AI, business intelligence, and Internet of Things capabilities, is expected to increase by 26%.

Gartner expects cloud-based platform services to boost spending with advanced applications, boosting corporate spending from $86.9 billion in 2021 to $109.6 billion this year.

This is especially true since the Covid-19 outbreak started in 2020. At this time, many companies have invested heavily in digital tools and technology to adapt to situations such as remote work, lockdowns, and store closures. According to technology leaders and analysts, many companies want to make sure they get the maximum value from these investments.