Worldwide IT spending is projected to total $5.1 trillion in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner, Inc.

While generative AI (genAI) has not yet had a material impact on IT spending, investment in AI more broadly is supporting overall spending growth.

“In 2023 and 2024, very little IT spending will be tied to GenAI,” said John-David Lovelock, VP analyst at Gartner. “However, organizations are continuing to invest in AI and automation to increase operational efficiency and bridge IT talent gaps. The hype around GenAI is supporting this trend, as CIOs recognize that today’s AI projects will be instrumental in developing an AI strategy and story before GenAI becomes part of their IT budgets starting in 2025.”

Cloud Price Increases and Cyber Behind Increases 

The software and IT services segments are both set to see double-digit growth in 2024, largely driven by cloud spending.

Global spending on public cloud services is forecast to increase by about a fifth (20.4%) in 2024, and similarly to 2023, the source of growth will be a combination of cloud vendor price increases and increased utilisation.

While inflation’s effect on both consumers and businesses plagued the devices market throughout 2022 and 2023, devices spending is predicted to to rebound modestly in 2024, growing 4.8%.

Cybersecurity spending is also driving growth in the software segment. Gartner found that 80% of CIOs reported that they plan to increase spending on cyber and information security in 2024, the top technology category for increased investment.

“AI has created a new security scare for organizations,” said Lovelock. “Gartner is projecting double-digit growth across all segments of enterprise security spending for 2024.”

As AI is becoming continually integrated into systems, security experts must be proactive in their response to mitigate the potential risks arising from AI, ranging from data protection concerns to advanced phishing techniques made possible my large language models.

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Change Fatigue Among CIOs

CIOs are experience what Gartner dubs ‘change fatigue’, which manifests as a hesitation to invest in new projects and initiatives. This is pushing a portion of 2023’s software investment into 2024, a trend that is expected to continue into 2025.

“Faced with a new wave of pragmatism, capital restrictions or margin concerns, CIOs are delaying some IT spending,” said Lovelock.

“Organizations are shifting the emphasis of IT projects towards cost control, efficiencies and automation, while curtailing IT initiatives that will take longer to deliver returns.”