Global IT spending is predicted to increase by 7.9% in 2025, reaching a total of $5.43 trillion, according to Gartner’s latest forecast. This growth is being propelled primarily by heavy investments in generative AI capabilities and the supporting infrastructure. A key driver behind this surge is the expected 42.4% year-over-year growth in spending on data center systems—marking the fastest-growing IT segment—as companies rush to enhance their AI-powered cloud platforms.
Data center systems are exhibiting the most significant growth, with organizations rapidly upgrading infrastructure to support AI workloads. Gartner reports that spending on AI-optimized servers and related technology is accelerating as cloud hyperscalers like Google, Microsoft, and Amazon continue to invest heavily in expanding AI-specific data centers. These infrastructure expansions are reshaping traditional IT models and laying the foundation for more advanced, AI-driven services.
Gartner’s Vice President and Distinguished Analyst John-David Lovelock has emphasized that the scale of investment by hyperscalers is unprecedented. By 2026, the ratio of AI infrastructure to traditional server spending among these major providers is projected to be 3:1. This signals a strategic shift in IT priorities, as businesses begin to favor intelligent, scalable systems over legacy frameworks.
Software spending is also surging, projected to grow 10.5% in 2025. This trend reflects the growing appetite for AI-embedded tools such as Microsoft Copilot and Salesforce’s Einstein GPT, which are rapidly becoming standard components of enterprise applications. Gartner estimates that by 2026, over 80% of software will include AI features, a massive increase from less than 1% in 2023. This transformation is driving a new wave of enterprise productivity and automation, with vendors racing to integrate generative AI functionalities.
However, this enthusiasm is tempered by the mixed results of generative AI deployments in 2024. According to Gartner, many pilot projects failed to deliver tangible business value and have now entered what analysts describe as a “trough of disillusionment.” Numerous organizations canceled or postponed projects that did not meet expectations, raising important questions about the maturity and reliability of current AI models. Still, the long-term outlook remains optimistic, as developers and IT leaders focus on refining their AI strategies to deliver real-world outcomes.
Beyond AI, other IT segments are showing consistent growth. Spending on devices—including computers, tablets, and smartphones—is expected to rise 5.4% next year. IT services spending is projected to grow by 4.4%, and communications services by 2.1%. Device investment is driven partly by upgrade cycles and new hardware with AI capabilities, though most of these tools still lack essential generative AI features. IT services and communications continue to expand at a steady pace, underpinning digital operations across industries.
Cloud and AI infrastructure investment is becoming increasingly concentrated among hyperscalers. Gartner estimates that over 70% of spending on AI-optimized servers in 2025 will be controlled by major providers like Amazon Web Services, Google Cloud, and Microsoft Azure. These companies are not only building infrastructure for their own use but also offering AI services to enterprises seeking scalable solutions. By 2028, it’s projected that hyperscalers will manage around $1 trillion worth of AI infrastructure, demonstrating their central role in shaping the future of digital technology.
Despite macroeconomic pressures such as trade tensions, rising interest rates, and geopolitical uncertainties, AI-related IT investment remains strong. Gartner notes a cautious slowdown in non-essential IT spending as companies reevaluate project portfolios. However, this has not significantly affected investment in AI and cloud infrastructure, which are viewed as essential for long-term competitiveness. Lovelock draws a comparison to swimming, noting that while some companies are hesitant at first, many eventually take the plunge and commit to transformative investments.
The generative AI market is currently navigating a shift from hype to practical implementation. Following an initial wave of enthusiasm in 2023 and early 2024, organizations are beginning to face the realities of AI integration. Gartner suggests that the market has entered a learning phase where businesses reassess their goals and refine their AI strategies. According to the firm, the industry is now progressing down the “slope of enlightenment,” moving toward the “plateau of productivity,” which is expected to be reached by 2029.
Looking forward, CIOs and business leaders will need to make strategic decisions about infrastructure upgrades, software integration, and budget planning. As generative AI becomes a standard feature in business software, companies must weigh the benefits of pre-built solutions versus customized implementations. Moreover, careful management of expectations and return on investment will be critical to avoiding disillusionment and ensuring that AI technologies contribute meaningfully to business objectives. With inflation affecting hardware and service prices, IT leaders must also differentiate between genuine innovation and inflated costs when planning expenditures.
Gartner’s forecast highlights 2025 as a transformative year for the global IT industry. With spending set to exceed $5.4 trillion, driven by robust demand for AI infrastructure and software, businesses have an opportunity to lead the next wave of digital innovation. Success will depend on disciplined planning, a clear understanding of AI capabilities, and a commitment to long-term value creation.
