Global economic uncertainty has emerged as the biggest pressure point on IT budgets across North America and Europe, with companies weighing financial caution against growth, according to research from Bain & Company.

The international consulting firm’s latest B2B IT Decision Maker Survey, which canvassed opinions from chief information officers (CIOs) and other senior tech buyers, reveals that 71% now cite wider macroeconomic uncertainty as the leading source of pressure on IT budgets, up from 59% last September.

Over 40% of respondents said that the impact of tariffs could have an effect on software spending, with more than 10% in the US predicting a major effect from increased taxes.

With these economic headwinds growing, the survey found that most (60%) of CIOs and senior software buyers are more closely scrutinising their tech spending than they were a year ago, with 64% saying that a focus on cost management was another factor affecting IT budgets.

According to Bain’s research, while most firms haven’t yet changed their IT strategies, many have dialled back growth expectations, with 48% of execs saying these lower growth forecasts are adding yet more pressure to IT spending plans.

AI spending, however, is the exception.

Over 80% of executives plan to boost AI investment this year, with 12% reporting the technology has improved operational efficiency and 7% reporting it has enabled a leaner organisation.

Further data from Bain & Company’s recent Generative AI’s Uptake survey found that AI budgets have swelled in the past year, as firms look to make bigger investments in both their tech and talent commitments.

Bain found that annual budgets for AI have doubled since early 2024, now averaging around $10 million (£7.5m), a 102% increase, with 60% of these programmes expected to be funded from standard budget cycles.

For bigger firms, AI spending has increased even more dramatically, with businesses reporting more than $5 billion (£3.7bn) in revenue now spending 405% more on the still-emerging tech, with budgets stretching to $27 million (£20.2m).

Ramping up these investments seems to be having a positive impact, with about 90% of firms that have scaled AI solutions saying it has met or surpassed expectations, with almost 60% of firms reporting measurable business improvements.

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Bain’s findings add to a litany of recent research showing that AI spending is thriving at the expense of other IT projects.

Amazon Web Services’ latest Gen AI Adoption Index found that almost half (45%) of senior IT decision-makers across nine countries, including the UK, chose genAI as their top budget priority, far ahead of planned IT spending in areas like security tools, compute power, storage and physical hardware. 

Meanwhile, recent figures from Gartner forecast that genAI spending is expected to total $644 billion (£500bn) this year, largely driven by the integration of AI capabilities into hardware, such as services, smartphones, and PCs.  

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