IT spend set for strongest year since 1996
AI, cloud transformation and the PC refresh cycle contribute to cash infusion
AI infrastructure, cloud and PC refreshes will drive 2025’s global IT spend to a level of growth not seen for 30 years.
Worldwide spending on IT – including hardware, software and services – will rise 14% this year to $4.25 trillion, according to IDC’s latest report.
That would make 2025 IT’s fastest year of growth since 1996, when the launch of Windows 95 and rising PC and internet adoption drove spending.
The new forecast is the latest update to IDC's Worldwide Black Book report, which it releases at the end of every month – and the seventh straight increase in the company’s IT spending prediction.
As well as "continued over-performance and aggressive investments by service providers in AI infrastructure,” the increase is down to “strong enterprise software spending” driven by digital transformation and cloud migration projects.
Stephen Minton, group VP at IDC, referenced AI's circular investment, currently raising eyebrows and stress levels around the world. However, he more positively characterised it as “a virtuous cycle of tech-driven macroeconomic growth.”
Minton doesn’t seem to think the wheels will come off this particular cycle any time soon, and neither does IDC. The company acknowledged the speculation around the AI investment bubble, but wrote that “there is so far no evidence of any slowdown taking hold, and surveys continue to indicate that most businesses plan to increase IT budgets again in 2026, despite lingering anxiety around the overall economy.”
Growth will slow but continue in 2026
IT spend has been strong through 2025, starting with a 16% YoY rise in Q1 – the fastest quarterly market growth since the mid-90s – as people raced to buy PCs ahead of anticipated US tariffs.
Though service providers drove some of this market growth, enterprise IT spending increased 11% in Q1 and 10% in Q2. However, the rise in service provider spending on datacentre infrastructure eclipsed all others: it is set to climb 86% this year to $500 billion.
Next year IDC is predicting a 10% YoY increase in IT spend: slower than the last 12 months, but still one of the strongest years since the 1990s.
The research firm sounded a warning note about the developing memory component shortage, which could drive up PC prices in 2026. However, technology demand tends to be resilient even in the face of macroeconomic pressures.
“Even in a moderate recession, most IT spending would continue. The likelihood of a ‘perfect storm’ similar to the IT market crash of 2001 remains low,” said Minton.