Global IT spending is on track to jump about 11% in 2025, driven by a corporate AI binge that has turned data centers into gold mines and turned every software vendor into a “generative AI” shop, according to Gartner and IDC forecasts that now look like understated first drafts of a tech boom.
The AI Spending Surge
Gartner now expects worldwide IT spending to hit roughly $5.5 trillion in 2025, up about 10–11% from 2024, with the strongest growth in data center systems, software, and devices. The driver is clear: artificial intelligence, especially generative AI, which is pulling forward demand for servers, cloud capacity, and AI-optimized PCs and smartphones. IDC’s Stephen Minton calls this “the strongest IT spending growth since 1996,” a period when every CFO suddenly remembered that IT was a thing worth funding.
Spending on data center systems (servers, storage, and networking gear) is up sharply, with Gartner forecasting 42% growth in that segment for 2025 alone, as companies race to build or lease AI-ready infrastructure. The hyperscalers—Alphabet, Amazon, Meta, and Microsoft—are leading the charge, accounting for roughly two‑thirds of global AI server spending, according to Gartner. For chipmakers like Nvidia , this has turned the data center into a “fantastically expensive” but very profitable line of business, with AI-optimized servers selling as fast as they can be built.
Software Gets an AI Markup
On the software side, vendors are quietly (and sometimes not so quietly) hiking prices to reflect the new “AI tax” baked into their products. Enterprise software companies, from CRM to ERP to analytics suites, are rushing to add generative AI features and then charging more for them, turning what was once a cost center into a growth engine. Gartner expects software spending to grow around 15% in 2026, with AI application software alone more than tripling in two years as companies pay for AI-enhanced productivity tools.
John-David Lovelock, a distinguished VP analyst at Gartner, puts it bluntly: “It will be an extinction-level event for software not to have generative AI feature functionality in their product”. That sentiment has turned every mid-tier software vendor into an AI shop overnight, and it’s why IT budgets are now being reallocated from “keeping the lights on” to “keeping the GPUs humming”.
Devices and the AI Hardware Rush
The AI wave is also lifting device sales, with smartphones and PCs seeing stronger-than-expected demand as businesses and consumers upgrade to AI-enabled models. Gartner notes that the availability of AI devices has boosted overall device spending by more than $30 billion in 2025, with mobile phones leading the surge. However, that pull-forward effect means growth will moderate in 2026, as the initial rush to buy AI PCs and phones subsides.
Meanwhile, the data center boom continues, with Gartner forecasting 19% growth in data center systems spending in 2026 as companies expand their AI-ready infrastructure. Supply constraints on high-end GPUs and AI accelerators remain a bottleneck, but the appetite for capacity is undimmed, especially among cloud providers and large enterprises that see AI as a competitive necessity, not just a nice-to-have.
The Circular Economy of AI Spending
There is, of course, a circularity to all this: AI spending is helping lift the broader economy, which in turn boosts business confidence and justifies more IT and AI investment. That virtuous cycle has made AI tools, software, and security among the categories most immune to budget cuts, even as some executives express anxiety about the pace of spending.
Analysts at IDC and Gartner stress that while this level of growth is not sustainable forever, there are few signs of a bubble about to burst. Instead, they see a structural shift: organizations are moving beyond AI experimentation toward full-scale integration, modernizing infrastructure and services in one of the strongest growth cycles the IT industry has seen in decades. For investors, that means the AI boom is still very much in the “show me the money” phase, where the real test isn’t just how much is being spent, but how much revenue and productivity it actually generates.
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