Of particular interest to IT solution providers is IT spending should increase each year thereafter and cross the $7 trillion mark in 2028
Current spending on generative AI (GenAI) has been predominantly from technology companies building the supply-side infrastructure for GenAI,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “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.”
Server Sales Continue to Drive the Data Center Systems Segment
Data center systems spending grew by nearly 35% in 2024. While the segment will not see a jump equal to that in 2025, it is still set to grow by almost $50 billion in 2025. This is led by server sales, which are set to almost triple from more than $134 billion in 2023 to $332 billion by 2028, including more than $257 billion in 2025.
"GenAI will easily eclipse the effects that cloud and outsourcing vendors had on previous years regarding data center systems," said Lovelock. “It took 20 years for the cloud and outsourcing vendors to build up spending to $67 billion a year on servers. The demand of GenAI will help nearly triple server sales from 2023 to 2028.”
Software and IT Services Drive Growth
Spending on software is expected to increase 14% to $1.23 trillion in 2025, up from 11.7% growth in 2024. Meanwhile, IT services is expected to grow 9.4% to $1.73 trillion in 2025, up from 5.6% in 2024.
“Software and IT services are a large driver of IT growth,” said Lovelock. “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.”
The full announcement can be accessed here.
