Worldwide IT spending is expected to total $5.61 trillion in 2025, an increase of 9.8% from 2024, according to the latest forecast by Gartner, Inc.
“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. “This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.”
GenAI will Influence IT Spending, but IT Spending Won’t Be on GenAI Itself
Segments including data center systems, devices and software will see double-digit growth in 2025, largely due to generative AI (GenAI) hardware upgrades (see Table 1). However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware.
Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)
|
2024 Spending |
2024 Growth (%) |
2025 Spending |
2025 Growth (%) |
|
| Data Center Systems | 329,132 | 39.4 | 405,505 | 23.2 |
| Devices | 734,162 | 6.0 | 810,234 | 10.4 |
| Software | 1,091,569 | 12.0 | 1,246,842 | 14.2 |
| IT Services | 1,588,121 | 5.6 | 1,731,467 | 9.0 |
| Communications Services | 1,371,787 |
2.3 |
1,423,746 |
3.8 |
| Overall IT | 5,114,771 | 7.7 | 5,617,795 | 9.8 |
Source: Gartner (January 2025)
“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 utilize the hardware. While both consumers and enterprises will purchase AI-enabled PC, tablets and mobile phones, those purchases will not be overly influenced by the GenAI functionality.”
Spending on AI-optimized servers easily doubles spending on traditional servers in 2025, reaching $202 billion dollars.
“IT services companies and hyperscalers account for over 70% of spending in 2025,” said Lovelock. “By 2028, hyperscalers will operate $1 trillion dollars’ worth of AI optimized servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market.”
In India, spending on data center systems is expected to increase 19.1% in 2025, nearly doubling its growth rate from 2024 (see Table 2).
Table 2. India IT Spending Forecast, 2024-2025 (Millions of U.S. Dollars)
| 2024 Spending | 2024 Growth (%) | 2025 Spending | 2025 Growth (%) | |
| Data Center Systems | 4,210 | 10.3 | 5,013 | 19.1 |
| Devices | 55,486 | 12.2 | 62,516 | 12.7 |
| Software | 17,893 | 15.6 | 20,909 | 16.9 |
| IT Services | 30,124 | 9.0 | 33,489 | 11.2 |
| Communications
Services |
37,672 | 4.7 | 39,585 | 5.1 |
| Overall IT | 145,386 | 9.8 | 161,511 | 11.1 |
Source: Gartner (January 2025)
“Enterprises are investing in AI-ready infrastructure for targeted use cases,” said Naveen Mishra, VP Analyst at Gartner. “The emphasis on accelerated servers for AI workloads is a significant driver, resulting in increased end-user spending in this segment in 2025 compared to the previous year.”
Software and IT services are major drivers of IT spending growth in India, increasing 16.9% and 11.2% in 2025, respectively. “While software spending is propelled by the price premium of GenAI-enabled solutions, IT services spending is fueled by enterprises’ need for cloudification, digitization, and consulting services,” said Mishra.
“Gartner predicts that by 2026, over 50% of software spend within application software will be influenced by GenAI. As enterprises focus on developing and enhancing technological frameworks for AI, investment in tools and platforms for deployment, management, and scaling will increase.”
