Worldwide IT spending is expected to total $5.61 trillion in 2025, an increase of 9.8% from 2024, according to the latest forecast by Gartner, Inc.

“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” said John-David Lovelock, distinguished VP analyst at Gartner.

“This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.”

While GenAI is set to influence IT spending, IT spending will not necessarily be on GenAI itself.

Segments of spend predicted by Gartner include data centre systems, devices and software, which are all expected to see double-digit growth in 2025, largely due to generative AI hardware upgrades.

However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware.

Worldwide IT Spending Forecast (Millions of US Dollars) 

Source: Gartner (January 2025)

“GenAI is sliding toward the trough of disillusionment [on the Gartner Hype Cycle] which reflects CIOs declining expectations for GenAI, but not their spending on this technology,” said Lovelock.

“For instance, the new AI ready PCs do not yet have ‘must have’ applications that utilise the hardware. While both consumers and businesses will purchase AI-enabled PC, tablets and mobile phones, those purchases will not be overly influenced by the GenAI functionality.”

Spending on AI-optimised servers easily doubles spending on traditional servers in 2025, reaching $202 billion dollars.

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“IT services companies and hyperscalers account for over 70% of spending in 2025,” said Lovelock. “By 2028, hyperscalers will operate $1 trillion dollars’ worth of AI optimised servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market.”