Gartner predicts 14.2% increase in IT spending: How to prepare

Worldwide IT spending is set to hit $6.37 trillion this year, according to a new forecast from Gartner. That spending -- up 14.2% from 2025 -- is being driven by increased demand for AI infrastructure and growing AI workloads. Gartner finds that spending is up across six categories: data center systems, devices, software, services, IaaS and communication services.

CIOs are at the forefront of technology spending conversations, but budgeting isn't as simple as throwing more money into the IT bucket. Enterprises are also grappling with budgetary pressures, the uncertainty around AI pricing and shifting priorities.

The Gartner forecast can offer CIOs insight into the current IT spending landscape as they consider budget allocation for their own enterprises and build the foundation for a competitive future.

Understanding the 2026 IT spending landscape

The Gartner forecast draws on market share data from more than 1,000 vendors, economic data and data from technology buyers, John-David Lovelock, a distinguished vice president analyst and chief forecaster at Gartner, told TechTarget.

"We balance all three of these very different effects on spending to get to an overall global IT spending forecast. It ends up being about 742,000 individual data points that come together to make that top-level number," he said.

In July 2025, Gartner forecast $5.43 trillion in worldwide IT spending for the year. Macroeconomic uncertainty dampened net-new spending, according to the forecast. Uncertainty remains a theme this year -- particularly around AI pricing -- but spending is surging as hyperscalers and enterprises build massive amounts of AI infrastructure.

"AI is becoming part of the foundation as opposed to just another technology project within organizations," Moe Asgharnia, CIO of tax, advisory and accounting firm BPM, said.

Just because IT spending is rising does not mean CIOs have carte blanche. They are still facing budgeting pressure from multiple angles. Gartner's 2026 forecast calls out inflation, supply shortages and the rising hardware and memory costs. CIOs must figure out how to allocate funds with those pressures in mind.

"There is certainly a higher amount of spend for enabling the AI-related capability. But on the other side, there is an equally strong push to say, 'Hey, what that needs to translate into is a reduction in staff or a reduction in other software spend," Krishna Prasad, CIO and chief strategy officer of UST, a digital transformation company, said.

The next few years are going to be the most intense for cost control and efficiency optimization the CIO has ever faced.

Spending growth by segment

The Gartner forecast breaks down worldwide IT spending into six categories and highlights the 2026 spending growth in each.

Data centers (62.5% growth) and IaaS (29.3% growth)

Data centers and IaaS are by far the largest spending growth categories.

"We are in a situation right now where the AI infrastructure buildout is the largest infrastructure project ever attempted by humanity. This is going to be bigger than the U.S. highway system, the European rail, the Great Wall of China and the International Space Center combined," Lovelock said. "That's the amount of money that is going into building out the data centers, the power, the cooling, the responsible use of it required for the AI that we will see come in the next two years."

CIOs considering this part of their IT budgets must answer the build-versus-buy question. And there isn't necessarily a right answer.

CIOs may guide their organizations down the build path to maintain more control over their AI costs.

"CIOs will start to lose control over the number of tokens that they use as the use of AI goes across the corporation [and] the cost of licensing the models that they're getting through their partners," Lovelock said. "And, of course, the overall cost of tokens used times token price plus licensing equals their spend."

Other companies will opt to work with partners to handle their AI workloads because they do not want to take on all the work involved in building.

"Are we in the line of business of maintaining data centers, or are we in the line of business of doing a specific product or service for our clients or customers?" Justice Erolin, CTO of software development company BairesDev, asked. "I think everybody wants to be a tech company, but I don't think everybody should."

Both paths and the hybrid approach come with different cost considerations and strategic decisions.

Software (15.5% growth)

Organizations are spending more on AI-ready software, according to the Gartner forecast. Software spending isn't just about finding new AI-ready software; it is also being driven by existing vendors incorporating AI capabilities into their products.

"Software spend, on average, every time any contract comes up, seems to go up by 10%, 15%. And that type of increase is unsustainable," Prasad said.

This could drive CIOs to reevaluate their tools and vendor relationships. 

"We're going through, finding duplicate platforms, finding redundant functions or services that we're paying for, [remove] that redundancy and then [reinvest] those dollars in more meaningful business value that in many cases layers AI on top of our business process," Asgharnia shared.

Enterprises may also look for opportunities to build their own software solutions internally.

Devices (9.8% growth)

Device spending is rising in part due to the demand for AI workloads.

"As individual productivity increases, the tier of device is also getting more complicated or more complex," Erolin said. "I have folks who generally wouldn't even need more than a ThinkPad. And now they're looking for the latest, greatest chip because they're running multiple AI loads even in their own local system."

Additionally, the war in Iran is impacting supply chains and hardware costs, Asgharnia noted.

"We've been looking at our budget for next year and even considering increasing the end-of-life term for our laptops from three years to four years just to give us some runway until hopefully the prices stabilize a little bit," Asgharnia shared.

IT services (5.3% growth)

IT services remain an important piece of the overall budget. Enterprises need vendors to support software and infrastructure implementation.

While Gartner forecasts increased spending in this category, there may also be a shift in enterprise expectations.

"Customers are expecting that the contracts themselves are shifted in a way that: I'm going to pay you is much less for the build phase, and I'm going to pay you much more centered on the outcomes that you deliver," Prasad said.

Communication services (4.4% growth)

Communication services have the smallest price increase of the categories covered in Gartner's forecast. But this category remains a foundational investment for enterprises.

CIOs can evaluate their enterprises' bandwidth requirements and look for opportunities to consolidate. Communication services have become much more commoditized, according to Prasad.  

"You should be able to get more capacity without having to spend proportionately more," he said.

The CIO budget framework

The Gartner forecast offers useful insights into IT spending trends, but CIOs must approach budget allocation with their organizations' individual goals and needs in mind. Budget frameworks are specific to each enterprise, but CIOs will be working through shared challenges and opportunities in IT spending.

Cost control

IT spending is rising, and more spending means greater scrutiny. Costs related to AI are, for the time being, variable and unpredictable. CIOs will be tasked with managing and optimizing those costs as the technology is implemented.

"The next few years are going to be the most intense for cost control and efficiency optimization the CIO has ever faced," Lovelock said.

That might mean CIOs will want to build more flexibility into the IT budgets and have more frequent conversations about their enterprise's spending and priorities.

"I would probably consider going from an annual budget to a quarterly budget," Erolin said. "It might make more sense because things are shifting so quickly that I don't know if anybody can forecast the next year."

Business outcomes

As AI becomes part of the enterprise foundation, its accompanying IT spending can no longer be in a single, ill-defined bucket.

"We shouldn't be budgeting for AI. We should be budgeting for business outcomes," Asgharnia said.

CIOs need close alignment with other business leaders to understand target business outcomes and how to allocate spending to support them.

"We start talking through what those opportunities or what those priorities translate to…whether that's infrastructure, whether that's applications, whether that's security tools, anything that we need to have in place to make sure that we're not a roadblock to the success of those priorities," Asgharnia said.

Leadership collaboration

Mapping budgets to business outcomes requires close collaboration among enterprise leaders. CIOs are often looked to as the leaders who understand AI and have all the answers. But in reality, no one has all the answers.

"The communication has to embrace the uncertainty around costs and outcomes and timelines," Lovelock said. "There's no company that can say: I've done this 100 times. I know how long it takes and how much it costs and what you'll get for it."

CIOs have a role to play in shaping strategic IT spending and setting their enterprises up for long-term success, which can mean taking a new approach to the AI-driven reality. 

"We tend to set our budget based on what we're already spending and just figuring out what that spend is going to look like," Asgharnia said. "I would say, question every single one of those line items."

Carrie Pallardy is a freelance journalist with experience writing in cybersecurity, technology and healthcare. She currently covers a wide range of issues relevant to today's CIOs and IT leaders.