In a new report from Gartner, worldwide IT spending is forecasted to grow by 9.3 percent in 2025, to $5.72 trillion, compared to spending in 2024. Spending on software and IT services is expected to drive this growth, along with spending on generative AI.
“Current spending on generative AI (GenAI) has been predominantly from technology companies building the supply-side infrastructure for GenAI,” John-David Lovelock, Distinguished VP Analyst at Gartner, said in a press release. “CIOs will begin to spend on GenAI, beyond proof-of-concept work, starting in 2025. More money will be spent, but the expectations that CIOs have for the capabilities of GenAI will drop. The reality of what can be accomplished with current GenAI models, and the state of CIO’s data will not meet today’s lofty expectations.”
While much of the IT spending, according to Gartner, will be driven by data center system upgrades (a 15% increase), spending on software (14%) and IT services (9.4%) make up a large portion of the rest of the forecasted growth.
For software, spending is expected to grow to $1.23 trillion in 2025 while IT services spending is expected to grow to $1.73 trillion – a 5.6% increase compared to 2024.
“Software and IT services are a large driver of IT growth,” Lovelock said in the release. “Spending on these segments is expected to be on AI-related projects, including email and authoring. This was a market that, despite its age and having been consolidated down to a small number of players, will add $6.6 billion to global spending in 2024 and $7.4 billion 2025 due in part to GenAI products and services. Our forecast projects that $500 billion will be added in spending every year in terms of growth rates. With this in mind, IT spending should cross the $7 trillion mark in 2028.”
AI Continues to Drive IT Innovation
While it’s unsurprising that AI is predicted to affect IT spend in 2025 and beyond, Forrester argues there’s a shift starting to happen when it comes to AI strategies within IT.
“According to Forrester’s State Of AI Survey, 2024, two-thirds of the respondents believe that their organizations would require less than 50% return on investments to consider their AI investments successful, which points to a reality check,” Analyst Jayesh Chaurasia and VP, Research Director Sudha Maheshwari, write in a blog on Forrester.
Maheshwari and Chaurasia predict that 2025 will be dominated by the “critical realization” that there are no shortcuts to AI success, “This year’s AI Predictions report highlights the importance of marrying data and AI strategies, bringing business and technical expertise together, and leveraging partners for excellence.”
Their three predictions for AI in 2025 are as follows:
- Most enterprises that are focused on AI ROI (return on investment) will scale back prematurely – “The expectation for immediate returns on AI investments will see many enterprises scaling back their efforts sooner than they should. This retreat risks stifling long-term growth and innovation as leaders realize that the ROI from AI will unfold over a more extended period than initially anticipated.”
- Forty percent of highly regulated enterprises will combine data and AI governance – “The complexity of AI governance, already intense due to rapid technological innovation and the absence of universal templates, standards, or certifications, is set to increase further. With stringent AI regulations coming into force…along with a growing demand for transparent AI operations, highly regulated enterprises will unify their data and AI governance frameworks.”
- Three out of four firms that build aspirational agentic architecture on their own will fail. – Agentic AI is the newest emerging tech and refers to AI systems that can autonomously plan and take actions to meet user-defined goals without direct human intervention. Maheshwari and Chaurasia write, “Enterprises with ambitions to build advanced agentic architectures themselves will meet significant hurdles. The challenge is that these architectures are convoluted, requiring diverse and multiple models, sophisticated retrieval-augmented generation stacks, advanced data architectures, and niche expertise.”
To read the full blog, check out: Predictions 2025 – An AI Reality Check Paves the Path For Long-Term Success.
To learn more about the Gartner 2025 IT spending forecast, read: Gartner Forecasts Worldwide IT Spending to Grow 9.3% in 2025