Spending on IT is forecasted to increase in 2025 according to Gartner, but price increases will absorb the increased CIO budgets
Gartner has predicted a healthy growth in IT spending worldwide next year, but sounded a note of caution about decreasing expectations among CIOs for generative AI (GenAI).
Gartner in its latest worldwide IT spending forecast reveals that global IT spending will reach $5.61 trillion in 2025, a 9.8 percent increase from 2024.
The current prediction of a 9.8 percent increase from 2024 IT spending, is an increase from Gartner’s previous forecast made in October 2024, when it predicted that IT spending would increase 9.3 percent from 2024.
IT spending
Gartner in its latest forecast once again warned that while more money will be spent on GenAI, the reality of what can be accomplished with current GenAI models will not meet today’s lofty expectations.
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” said John-David Lovelock, Distinguished VP Analyst at Gartner.
John-David Lovelock, distinguished VP analyst at Gartner. Image credit Gartner
“This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth,” said Lovelock. “All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.”
According to Gartner, segments including data centre systems, devices and software will see double-digit growth in 2025, largely due to generative AI (GenAI) hardware upgrades.
However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware.
Data centre spending is forecasted to rise 23.2 percent in 2025, after enjoying 39.4 percent growth in 2024.
Device spending is forecast to rise 10.4 percent in 2025, after 6 percent rise in 2024.
Software spending meanwhile is forecast to rise 14.2 percent, up from a 12 percent growth in 2024.
IT services spending is predicted to grow 9 percent, from 5.6 in 2024.
And finally communications services spending is forecasted to rise 3.8 percent in 2025 from 2.3 percent in 2024.
‘Trough of disillusionment’
Gartner’s Lovelock offered a more cautious take on the tech industry’s ongoing optimistic attitude towards all things associated with artificial intelligence.
“GenAI is sliding toward the trough of disillusionment which reflects CIOs declining expectations for GenAI, but not their spending on this technology,” said Lovelock.
“For instance, the new AI ready PCs do not yet have ‘must have’ applications that utilise the hardware. While both consumers and businesses will purchase AI-enabled PC, tablets and mobile phones, those purchases will not be overly influenced by the GenAI functionality.”
Spending on AI-optimised servers easily doubles spending on traditional servers in 2025, reaching $202 billion dollars, Gartner predicted.
“IT services companies and hyperscalers account for over 70 percent of spending in 2025,” said Lovelock. “By 2028, hyperscalers will operate $1 trillion dollars’ worth of AI optimised servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market.”
Gartner is not the only firm sounding some caution about the AI sector.
In August 2024 Expereo’s IDC research found that AI aspirations for over a third of global CIOs are threatened by a lack of skills and expertise.
