Edge computing is changing the way businesses handle real-time data and artificial intelligence (AI). According to IDC, it’s leading to increased investments in AI-driven processors, multi-access edge computing (MEC), content delivery networks (CDNs), and virtual network functions (VNFs).
IDC’s latest report on edge computing spending offers a broad view of the market from 2025 to 2028, covering 22 technology markets and multiple countries like the US, UK, Canada, China, and more. The analysis looks at 1,000 specific enterprise use cases across AI, IoT, augmented reality (AR), virtual reality (VR), drones, and robotics.
By 2025, global spending on edge computing services is expected to hit nearly $261 billion, with a growth rate of 13.8%, reaching about $380 billion by 2028. In the early months of 2025, hardware emerges as the top investment area, driven by the surge in AI-accelerated processors. The push for real-time data processing and a growing number of intelligent endpoints are pushing the need for edge-based computing capabilities.
However, by 2028, spending on various service segments (like provisioned and professional services) is set to eclipse hardware investments, showing a robust growth rate of over 18%. In the realm of provisioned services, infrastructure as a service (IaaS) is the fastest-growing segment, catering to the demand for scalable and cost-effective solutions that meet AI’s increasing computational needs. Service providers are expected to invest nearly $100 billion in infrastructure for delivering MEC, CDNs, and VNFs to enterprises.
AR and AI lead the charge as the fastest-growing areas for investment. AI, in particular, is a significant catalyst, prompting extensive hardware investments, especially in AI-accelerated processors.
When looking at various sectors, retail and services will take the largest share of edge services investments in 2025, accounting for about 28% of total spending. Use cases like video analytics and optimized operations are driving this expenditure. The manufacturing and resources sector follows, contributing about 25% of global spending. Financial services are projected to see the fastest growth over the next five years, with an increase of more than 15%, largely due to investments in augmented fraud analysis within the AI domain.
Geographically, North America will lead edge spending during this period, with Western Europe and China also contributing significantly. Western Europe, China, and Latin America are forecasted to see the fastest growth.
Dave McCarthy from IDC highlighted that edge computing is on the brink of transforming how businesses utilize real-time data. He emphasized the importance of industry-specific solutions and the importance of investments in low-latency networks, AI-driven edge analytics, and partnerships that can deliver robust infrastructure. These initiatives are vital for unlocking the full potential of edge computing, transforming everything from manufacturing to healthcare systems and spurring new innovations across various sectors.