Gartner: Why Global IT Spending Will Hit US$5.61tn in 2025

Enterprise technology spending is facing competing pressures in 2025 as organisations attempt to balance innovation requirements against rising costs.

It’s no surprise that AI is also playing a huge role in enterprise technology, as its capabilities are driving investment in new infrastructure, while inflation impacts technology procurement across sectors.

Meanwhile, price increases across hardware, software and services segments are influencing spending patterns as organisations reassess technology investments - and this impact is extending further than initial purchase costs to affect ongoing operational expenditure, requiring adjusted planning for technology deployments.

In this context, Gartner predicts that global IT spending will reach US$5.61tn in 2025, representing a 9.8% increase from 2024 figures.

Gartner forecasts AI hardware investment surge

Gartner says that data centre systems spending will grow 23.2% to reach US$405bn in 2025, driven by investments in AI infrastructure.

“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” John says.

“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.”

Spending on AI-optimised servers will also reach US$202bn, more than double the expenditure on standard server hardware.

The software segment will see 14.2% growth to US$1.24tn, while IT services spending will increase 9% to US$1.73tn.

Meanwhile, device spending, which includes computers and mobile hardware, will grow 10.4% to US$810bn.

These figures show a shift in enterprise technology priorities as well as growth, with organisations investing in infrastructure to support emerging technologies while managing ongoing operational costs.

For example, UK Chancellor Rachel Reeves announced plans to tackle “slow planning system” in the UK recently, ensuring data centres are built faster to support AI-led innovation.

Enterprise AI adoption shapes technology markets

Gartner says technology service providers and cloud computing companies will dominate AI hardware spending.

"IT services companies and hyperscalers account for over 70% of spending in 2025," says John.

"By 2028, hyperscalers will operate US$1tn' worth of AI optimised servers, but not within their traditional business model or IaaS Market."

Yet despite hardware upgrades to support Gen AI systems that can create content from training data - functionality differences remain limited.

"The new AI ready PCs do not yet have 'must have' applications that utilise the hardware," he notes.

"While both consumers and businesses will purchase AI-enabled PC, tablets and mobile phones, those purchases will not be overly influenced by the Gen AI functionality."

This means that the market for Gen AI technology shows signs of entering what Gartner terms the "trough of disillusionment" – a period where interest wanes as implementations fail to deliver.

However, this reflects changing expectations rather than reduced investment.

Communications services market shows steady growth

The communications services sector, which includes telecommunications and networking services, projects 3.8% growth to reach US$1.42tn in 2025 - which represents the most moderate growth rate across major IT spending categories.

The concentration of AI infrastructure spending among major cloud service providers indicates structural changes in the technology market.

"Hyperscalers are pivoting to be part of the oligopoly AI model market," John says, referring to the consolidation of AI infrastructure among major cloud service providers.

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