Asia-Pacific ICT spending to hit $647Bn by 2026, driven by AI: IDC
BENGALURU, INDIA — Information and Communications Technology (ICT) investment across Asia-Pacific (excluding Japan and China) is set for a major surge, with total spending forecast to reach US$647 billion in 2026, fueled largely by accelerated AI adoption in banking, software, and government sectors.
According to a report from Technology For You, the region is rapidly moving from experimentation to industrial-scale execution, signaling a broader technology overhaul among enterprises.
AI and software drive record ICT investments
According to the latest update from the International Data Corporation (IDC), the Asia-Pacific excluding Japan and China (APEJC) ICT market is expected to grow 5.4% in 2026, outpacing global averages.
“The APEJC region is done with the ‘AI Entrant’ phase,” said Mario Allen Clement, research manager at IDC.
“In 2026, the honeymoon is over. Boards are demanding a hard ROI on every dollar spent. We see a massive reallocation of capital away from ‘pilot projects’ and toward the unglamorous foundation—cleaning up toxic data, securing borders, and hiring the services talent that can actually make the machines work. If you haven’t fixed your data architecture by the end of 2026, you won’t survive the 2029 automation wave,” Clement added.
Software continues to dominate ICT spending, capturing 24% of the regional budget, with priorities shifting from generic cloud migration to data sovereignty and security resilience.
The region’s increasing exposure to cyber-warfare has heightened demand for security software and enterprise resource management applications—critical infrastructure for feeding AI models over the next three years.
Services and hardware expansion close the gap
Services, accounting for over 23% of ICT budgets, are emerging as a key growth pillar. IDC notes that 60% of APEJC enterprises now require professional “health checks” to determine if their legacy infrastructure can handle AI at scale.
Expansion of global capability centers (GCCs) in India and Southeast Asia is driving managed services growth, bridging talent gaps in AI orchestration.
Meanwhile, hardware remains the fastest-growing segment at 3.6% year-over-year, driven by the “China Plus One” manufacturing shift to India, Vietnam, and Thailand.
Demand for non-x86 servers, edge computing, and AI-centric infrastructure is fueling what IDC calls an “infrastructure arms race” for smart factories and high-tech supply chains.
As outsourcing becomes integral to ICT strategy, businesses are increasingly relying on professional services and business process outsourcing (BPOs) to implement AI and maintain competitive edge.
The IDC report underscores how the combination of AI-driven software, scalable services, and resilient hardware will redefine the Asia-Pacific ICT landscape, positioning the region as a hub for next-generation digital transformation.
