IT spending to grow 7.9% this year amid uncertainty

• Survey reveals that 62% of respondents view AI as the defining technology shaping competitive advantage over the next decade.
• Spending on IT hardware and infrastructure faces particular pressure from rising prices and disrupted supply chains.

The global Information Technology (IT) spending landscape is projected to reach a significant milestone in 2025, with expenditures estimated to total $5.43 trillion, a robust increase of 7.9 per cent from 2024.

The forecast by Gartner, Inc., a leading research and advisory company, underscores a dynamic environment in which technological innovation, particularly in artificial intelligence (AI) and generative AI (GenAI), continues to drive substantial investment despite a backdrop of economic and geopolitical uncertainty.

John-David Lovelock, Distinguished Vice President Analyst at Gartner, highlights a nuanced phenomenon influencing IT spending patterns.

While there is a marked “uncertainty pause” resulting in a strategic suspension of net-new spending across various sectors, the rapid advancement and adoption of AI technologies mitigate the overall slowdown.

This pause is not indicative of budget cuts—budgets remain fully allocated—but rather reflect a cautious approach by enterprises deliberating the timing and nature of new investments.

Profound transformation

The uncertainties stem largely from economic fluctuations and geopolitical tensions, which compel organisations to navigate investments prudently.

Central to this evolving scenario is the accelerating demand for AI-related infrastructure. Lovelock notes that spending on AI-optimised data centre systems is surging, driven by the growth of GenAI applications.

Remarkably, whereas such specialised servers were virtually nonexistent in 2021, projections indicate that by 2027, expenditure on AI-optimised servers will triple that of traditional servers. This trend signals a profound transformation in the hardware sector, aligning infrastructure capabilities with the requirements of advanced AI workloads.

The surge in AI investment is further corroborated by Gartner’s survey of 252 senior leaders from enterprises with revenues exceeding $500 million across North America and Western Europe. The survey reveals that 62 per cent of respondents view AI as the defining technology shaping competitive advantage over the next decade.

This recognition propels enterprises to prioritise innovation and digital transformation as critical strategies to maintain and enhance market position amid an increasingly challenging and eroding economic environment.

A strategic shift

Many Chief Information Officers (CIOs) exhibit caution, gravitating toward simpler, “plug and play” use cases rather than investing heavily in unproven or nascent GenAI functionalities.

This selective approach suggests a maturing market that values demonstrable functionality and incremental integration over speculative or overly ambitious deployments.

Another notable insight from the survey is the disparity between enterprises’ starting positions and year-end expectations. While 61 per cent of organisations entered 2025 in a stronger state than the previous year, only 24 per cent anticipate finishing ahead of their 2025 plans.

This tempered optimism reflects the pervasive impact of external shocks—economic downturns, supply chain disruptions, and geopolitical risks—that continue to challenge strategic execution and operational agility.

Within this complex environment, spending on IT hardware and infrastructure faces particular pressure from rising prices and disrupted supply chains. Conversely, sectors characterised by ongoing financial commitments, such as cloud services and managed services, show greater stability.

These recurring investments underscore a strategic shift toward flexible, scalable solutions that support resilience in uncertain times.