Good news for the tech sector: worldwide IT spending will grow by a robust 7.9% in 2025, according to a mid-year forecast by Gartner. Yet the Gartner report includes statistics that reveal significant uncertainty even as the headline is positive.
Put in dollar terms, worldwide IT spending is expected to hit $5.43 trillion in 2025. The biggest winner is data center systems, a category that Gartner expects will rake in the lion’s share, $474.9 billion, for a remarkable 42.4% increase over 2024. Software, a perennial winner, is forecast to benefit from $1.23 trillion in spending, for a 10.5% increase.
Playing a lesser role in IT’s growth in 2025 are expected increases in devices (5.4%), IT services (4.4%), and communication services (2.1%).
Yet 2025’s mid-year forecast is down substantially from the rosy forecast that Gartner issued to start the year. In January, the research firm forecast a 9.8% increase over 2024 IT spending for 2025.
It’s important to note that Gartner partially bases its spending predictions on insights from CIOs and other executives, so the lower mid-year spending forecast reflects a dampening optimism across the industry. To begin the year, Gartner predicted bigger boosts for software (14.2%) and IT services (9.0%). However, the January forecast for data center systems was a much lower 23.2%—so only a limited portion of industry leaders foresaw this year’s torrid pace of data center build-out, driven by the rise of AI.
“While there is a business pause on net-new spending due to a spike in global uncertainty, the effect is subsumed by ongoing AI and generative AI digitization initiatives,” said John-David Lovelock, Distinguished VP Analyst at Gartner. It’s exactly this so-called uncertainty pause that is prompting slowdowns in software and services this year.
This boost in uncertainty started in the second quarter, as the tariff wars were starting. The Gartner survey found that while 61% of companies began 2025 in a better position than at the same time last year, a mere 24% expect to end the year ahead of their 2025 plans. The research firm noted that companies are seeking to “mitigate adverse impacts from these multifaceted challenges.”
In contrast, the surging investment in generative AI has benefitted AI optimized servers—a category that was virtually nonexistent as recently as 2021. Gartner forecasts that spending on AI servers to triple that of traditional servers by 2027.
Clearly, the race to build AI infrastructure is gaining speed. In a recent Gartner survey of senior leaders across various sectors, with revenue of $500 million or more, 62% identified AI as “defining the future of competition for the next 10 years.” Keeping pace with the market is driving big spending, with 64% pointing to the need to remain competitive boosting investment in “technology and business change in an eroding environment.”
Not that spending on AI is seen by executives as a cure-all. In fact, budget-conscious business customers are working to wring more value from their legacy providers.
“With generative AI sliding towards the trough of disillusionment, more time and spending is being focused on delivered functionality from incumbent software providers,” said Lovelock. At the same time, business leader are “looking towards more ‘plug and play’ simple use cases as they are being sold generative AI functionality, but not necessarily buying the functionality.”
