Global IT spending is projected to reach $5.61 trillion in 2025, reflecting a 9.8% increase from 2024, according to Gartner. In India, IT spending is expected to grow by 11.1%, totalling $161 billion during the same period.

John-David Lovelock, Distinguished VP Analyst at Gartner, stated that while CIO budgets are rising, much of this growth will offset price increases in ongoing spending. The gap between nominal and real IT spending is evident, as price hikes will absorb part of the budget growth. Major spending categories are expected to remain affected by these higher costs, leading CIOs to adjust their financial plans.

Segments such as data centre systems, devices, and software are anticipated to see double-digit growth in 2025. This is attributed to hardware upgrades driven by generative AI (GenAI). However, the functionality of these upgraded systems is not expected to stand out significantly, despite the advancements. Lovelock noted that while AI-ready devices are entering the market, they currently lack essential applications that utilise their full capabilities. Consumers and enterprises may adopt these devices, but their decisions are unlikely to hinge on GenAI features alone.

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AI-Optimised Servers on the Rise

Spending on AI-optimised servers is set to double that of traditional servers in 2025, reaching $202 billion. IT services companies and hyperscalers will account for over 70% of this expenditure. By 2028, hyperscalers are expected to manage $1 trillion worth of AI-optimised servers, operating outside traditional business models and focusing on the AI model market.

In India, data centre systems spending is forecasted to grow by 19.1% in 2025, nearly doubling the growth rate seen in 2024. Naveen Mishra, VP Analyst at Gartner, pointed out that enterprises are prioritising AI-ready infrastructure for specific use cases, with accelerated servers for AI workloads driving spending in this segment.

Software and IT services will play a key role in driving India’s IT spending growth, with increases of 16.9% and 11.2%, respectively, in 2025. Mishra added that software spending is being boosted by the premium pricing of GenAI-enabled solutions, while IT services are benefiting from demand for cloud adoption, digitisation, and consulting.

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