Despite geopolitical and macroeconomic uncertainties, the projected global technology and IT spending for 2025 shows an acceleration compared to 2024. The digital economy will also continue to grow strongly in the following years, with artificial intelligence, software, and cybersecurity as significant drivers.
Without question, the bulk of the growth is for software. Generative AI drives much indirect spending, for example, in data centers. The replacement of legacy applications and cloud computing solutions is also key. Digital transformation remains essential in a world where the digital economy represents an increasing share of GDP (see below), and cybersecurity and cyber resilience remain challenges and priorities to keep that economy going.
The digital economy: on its way to 17 percent of global GDP
Forrester expects technology spending to rise to $4.9 trillion in 2025. That’s a 5.6 percent year-on-year increase. In 2024, technology spending accounted for $4.7 trillion.
The company cites spending on, among others, mentioned categories, such as security, cloud, AI, software, data centers, and the digital economy, as drivers of that growth, along with IT services. There is not really a region where tech spending is growing significantly faster. However, there are significant differences between regions regarding priorities and share of the global market.
The finance and insurance, government, and media and information sectors combined currently account for 46% of global tech spend (Michael O’Grady, Forrester)
The technology spend data and trends projected by Forrester were released on Feb. 12. But of course, they were calculated earlier and thus do not consider the impact of the whirlwind of geopolitical evolutions since then. What is certain, however, is that the technology sector will play a role in many of these evolutions and is even partly the focus of geopolitical discussions. Artificial intelligence is one example that is often mentioned in this geopolitical context, as we could already see in early 2025 with, for instance, the debates after the launch of DeepSeek.
According to Forrester’s Michael O’Grady, the growing digital economy should account for 17 percent of global GDP by 2028. That means a CAGR (compound annual growth rate) of 7 percent through 2028.
The increasing size of this digital economy will further raise the economic importance of the technology sector and thus also strengthen the power of large technology players. And that, in turn, will impact geopolitical evolutions too. Right at the start of 2025, it became immediately apparent how the agenda of large tech companies became even more important in some leading countries, followed by a somewhat ‘softer’ approach towards the industry in other regions.
Earlier in 2025, on Jan. 21, Gartner announced that it expects global IT spending to grow by 9.8 percent this year. This means that, in total, IT spending should exceed $5.61 trillion by the end of 2025.
Of course, you can’t simply compare the numbers from Gartner, Forrester, and others, but you can look at the underlying trends. By the way, Gartner points out that nominal spending in 2025 will be skewed against real IT spending since prices are higher than expected in most categories, forcing CIOs to take action.
Gartner also sees GenAI influencing IT spending but notes that the spending will not be on GenAI itself. Here as well, data center systems should benefit. Time to look at one more of the drivers of robust projected growth in tech spending and IT spending in 2025 (in addition to the growing digital economy) we just mentioned: generative AI.
Looking at the various main segments (data center systems, devices, software, IT services, communications services), it’s clear that growth is highest in the data center system segment, followed by software, as the Gartner data indicate.
Per Forrester, software alone (without IT services) will grow at a rate of 10.5% and is expected to capture 60 percent of global tech spending growth by 2029, making it the fastest-growing tech sector.
Generative AI: sector-specific and indirect growth
It is evident that companies will continue their spending on artificial intelligence. However, there will be significant differences depending on the sector, and many investments will be indirect, as just mentioned. Also note the rise of agentic AI, although, for most, that is still a matter of a few years. And, of course, AI is more than GenAI.
Yet, as for the big evolution of the last few years that Generative AI is, Forrester says that it will mainly provide sector-specific growth where you can think of sectors such as financial services, retail, and media, among others.
GenAI is sliding toward the trough of disillusionment which reflects CIOs declining expectations for GenAI, but not their spending on this technology (John-David Lovelock, Gartner)
According to Forrester, increased investment in GenAI goes hand in hand with challenges for companies adopting it. Consider workforce changes, reducing tech debt, and competing to bring the right (technical) talent on board. That, too, requires investment.
Research firm Gartner also points to the importance of generative AI for global IT spending. However, as mentioned, this is not so much about investment in GenAI itself. According to Gartner, some segments, including data center systems, devices, and software will record double-digit growth by 2025, largely due to generative AI hardware upgrades. But even with new hardware, these upgraded segments will not yet differentiate themselves in terms of functionality.
John-David Lovelock of Gartner explains: “GenAI is sliding toward the trough of disillusionment, which reflects CIOs declining expectations for GenAI, but not their spending on this technology. For instance, the new AI-ready PCs do not yet have ‘must-have’ applications that utilize the hardware. While both consumers and enterprises will purchase AI-enabled PCs, tablets and mobile phones, those purchases will not be overly influenced by the GenAI functionality.”
We further note that spending on AI-optimized servers should easily exceed that on traditional servers by 2025 and reach a total of USD 202 billion.
The role of hyperscalers and U.S. dominance
Also according to Gartners, hyperscalers are transforming themselves to be part of the oligopolistic AI modeling market.
Accordingly, hyperscalers and IT services companies will account for more than 70 percent of spending by 2025. And by 2028, hyperscalers would manage $1 trillion worth of AI-optimized servers. However, this is not within their traditional business model or the IaaS market.
As cited earlier, the growth rates of most regions are more or less the same. But if we look at the absolute numbers and certainly at generative AI, we see the dominance of the U.S.
According to Forrester, U.S. tech spend, excluding staffing, would reach the $2 trillion mark for the first time by 2025. Regarding AI software spending, the U.S. accounts for 46 percent of projected spending. Per Forrester, this confirms the dominance of the U.S. in generative AI and cloud computing adoption.
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