With the constant adoption of artificial intelligence (AI), some reports suggest that AI can boost the IT sector. The reason? Automation and time-saving ability of AI to enhance productivity.
According to the latest forecast by Gartner, Inc. the Worldwide IT spending is expected to total $5.61 trillion in 2025, an increase of 9.8% from 2024. Here's why and how!
AI in the IT industry
Segments including data center systems, devices and software will see double-digit growth in 2025, largely due to generative AI (GenAI) hardware upgrades. However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware.
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” John-David Lovelock, Distinguished VP Analyst at Gartner, said.
He further highlighted that “This means that, in 2025, nominal spending versus real IT spending will be skewed." One can expect price hikes absorbing some or all of budget growth. Also major categories could be reflecting higher-than-expected prices. Thus, "prompting CIOs to defer and scale back their true budget expectations," Lovelock pointed out.
Software and IT services are major drivers of IT spending growth in India. They contribute in increase of about 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,” Naveen Mishra, VP Analyst at Gartner, concluded.
Looking ahead, 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 also increase.
Worldwide IT spending | Gartner
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.
