The global IT market is on course for its strongest performance in almost thirty years, according to the latest figures from IDC, following a 14% spike in growth.

Fresh IDC data shows that the emergence of a massive AI investment wave is driving a “supercycle” of tech spending not seen since 1996, when the launch of Windows 95 and rapid internet adoption drove an explosion in IT spending.

According to the data, IT spending will reach $4.25 trillion (£3.2tn) this year, while total ICT spending, which also includes telecom and business services, will hit almost $7 trillion (£5.2tn).

IDC’s forecast was increased for a seventh consecutive month in November, reflecting what the firm characterised as “over-performance and aggressive investments” by service providers in AI infrastructure, with December’s numbers showing strong enterprise software spending as many firms continue with digital transformation and cloud migration projects. 

Software spending is expected to have increased by 14% this year, with AI deployments adding to investments in security, optimisation and analytics, while spending on datacenter infrastructure is expected to have risen by a staggering 86%, reaching almost half a trillion dollars.

Research from Barclays indicates that, overall, the global economy grew by 3.3% over 2025, with a third of this stemming from spending on data centres, chips, power grids, networking equipment and other AI-related capital expenditure.

While speculation is rife about how and when this cycle may unwind, or when the AI bubble will finally pop, IDC said that, so far, there is no evidence of any slowdown taking hold, with surveys continuing to indicate that most businesses plan to increase IT budgets again in 2026.

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However, forecasts are more cautious moving into the new year. IDC said that IT spending will likely increase by 10% in 2026, roughly in line with other estimates, marking a much steadier pace than this year, but still representing one of the strongest for the industry since the 1990s. 

“There are headwinds and downside risks in the 2026 outlook, including an expected memory component shortage, which may drive up PC prices next year,” said Stephen Minton, group VP at IDC. 

“Technology demand has been resilient this year in the face of uncertainty around tariffs and a sluggish global economy, but our baseline forecast calls for a stable economy, supported in part by ongoing AI investment. 

“Even in a moderate recession, most IT spending would continue. The likelihood of a ‘perfect storm’ similar to the IT market crash of 2001 remains low.”