Global IT spending is projected to grow significantly in 2025, reaching $5.61 trillion, a 9.8% increase over 2024, according to Gartner, Inc. Despite this substantial growth, CIOs are grappling with the reality that much of their budget increases will be consumed by rising costs in recurrent expenses.
Inflationary pressures and higher-than-expected prices across major IT categories are prompting leaders to reassess their spending priorities.
Generative AI is an important driver of hardware upgrades, such as AI-enabled devices and servers, but its broader adoption remains constrained by the lack of must-have applications. As CIOs navigate these challenges, spending in data center systems, devices, and software is set to experience double-digit growth, albeit with tempered enthusiasm for immediate GenAI returns.
Why It Matters: The 2025 IT spending forecast paints a picture where rising costs and emerging tech collide. Companies are pouring money into infrastructure to stay ahead, but the payoff from innovations like GenAI is still up in the air. It’s a balancing act, making every decision about spending count.
- Global IT Spending Trends: IT spending will rise by 9.8% in 2025, totaling $5.61 trillion, driven by a combination of inflationary pressures and the adoption of AI-related hardware. Key segments like data center systems and software are expected to see substantial growth of 23.2% and 14.2%, respectively.
- Inflation’s Impact on Budgets: A significant portion of budget increases for CIOs will be absorbed by rising prices in recurrent spending. This dynamic skews nominal growth figures, with real IT spending seeing a more modest impact.
- GenAI Hardware Adoption Without Immediate Functionality: Upgrades to AI-ready devices and servers are on the rise, yet current hardware lacks compelling, differentiated applications. Spending on AI-optimized servers will reach $202 billion, surpassing traditional server investments.
- Hyperscalers and AI Oligopolies: By 2028, hyperscalers are projected to operate $1 trillion in AI-optimized servers, signaling a shift in business models away from traditional infrastructure-as-a-service (IaaS) markets to AI-driven ecosystems.
Go Deeper -> Gartner Forecasts Worldwide IT Spending to Grow 9.8% in 2025 – Gartner
