Gartner’s latest spending forecast shows a huge shift toward AI-optimised servers. By 2025, spending on these servers is set to reach $202 billion, more than double what we see for traditional servers. In 2022, server spending was around $130 billion, creeping up to $134 billion in 2023 as GPU servers hit the market.
Datacentre spending, which includes servers, skyrocketed to $329 billion in 2024, and this year, Gartner expects a more than 23% jump, bringing total spending on servers to $405 billion in 2025. John-David Lovelock from Gartner emphasizes that IT spending won’t be dominated by enterprise IT. By 2028, hyperscalers will manage servers worth a staggering $1 trillion. “IT services firms and hyperscalers will account for over 70% of server spending in 2025,” he says.
Hyperscalers are integrating AI-optimised servers into their infrastructure offerings like IaaS and PaaS, mainly to power generative AI services for businesses and consumers. On a different note, Gartner predicts IT buyers will boost software spending by 14.2% this year, partly due to rising prices as vendors incorporate AI into their products. The IT services market is also set to grow by 9%.
As Lovelock points out, “Tech companies are embedding GenAI into their products and increasing the prices.” In the device market, spending is expected to rise by 10.4%. A lot of this is tied to the PC refresh cycle, with businesses needing to upgrade their devices and migrate to Windows 11 before October 14th. Still, manufacturers are hiking prices, making AI PCs luxury items.
These AI-enabled devices aim to enhance GenAI and AI applications, offering on-device AI capabilities. They can potentially allow businesses to deploy GenAI on local machines, reducing the risk of data leaks that come with cloud solutions. However, IT leaders don’t yet see a strong reason to pay more for these devices.
Lovelock notes that “GenAI is headed toward a trough of disillusionment,” reflecting a dip in CIOs’ expectations for the technology without reducing their spending. The new AI-ready PCs lack compelling applications that truly utilize their capabilities. While consumers and enterprises will buy AI-enabled PCs, tablets, and phones, the GenAI features won’t be the main drivers of these purchases.
Overall, Gartner projects worldwide IT spending to hit $5.61 trillion in 2025, marking a 9.8% increase from 2024.