Uncertainty: CIOs Pausing On Net-New Spending

Gartner Forecasts Worldwide IT Spending to Grow 7.9% in 2025

John-David Lovelock, Distinguished VP Analyst at Gartner

FinTech BizNews Service 

Mumbai, July 17, 2025: Worldwide IT spending is expected to total $5.43 trillion in 2025, an increase of 7.9% from 2024, according to the latest forecast by Gartner, Inc.

“While there is a business pause on net-new spending due to a spike in global uncertainty, the effect is subsumed by ongoing AI and generative AI (GenAI) digitization initiatives,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “For instance, both software and services spending growth in 2025 is expected to slow down due to this ‘uncertainty pause,’ but spending in AI-related infrastructure, such as data center systems, continues to surge.”

Worldwide IT Spending Forecast (Millions of U.S. Dollars) 

Source: Gartner (July 2025)

"Data centers are experiencing a surge driven by GenAI, with spending on AI optimized servers, which was virtually nonexistent in 2021, expected to triple that of traditional servers by 2027,” said Lovelock

This aligns with a Gartner survey of 252 senior leaders across various industries in North America and Western Europe with enterprise-wide revenue of $500 million or more from March to May of 2025, where 62% of respondents identified AI as defining the future of competition for the next 10 years. Competitiveness is a primary reason why enterprises will invest in technology and business change (64%) in an eroding environment.

“With GenAI sliding towards the trough of disillusionment, more time and spending is being focused on delivered functionality from incumbent software providers,” said Lovelock. “CIOs are looking towards more ‘plug and play’ simple use cases as they are being sold GenAI functionality, but not necessarily buying the functionality.”

Uncertainty Pause Fallout

Starting early in the second quarter of 2025, there has been an “uncertainty pause,” encompassing a strategic suspension of net-new initiatives across a breadth of departments, including IT. This pause is driven by heightened uncertainty and geopolitical risks. In response, the global corporate sector is exercising increased caution, as organizations seek to mitigate adverse impacts from these multifaceted challenges.

The same Gartner survey found that 61% of enterprises started 2025 in a better position than at the same time last year, but only 24% expect to end the year ahead of their 2025 plans. This sentiment was consistent across all sectors to varying degrees (see Figure 1).

 Enterprise Executive Economic Sentiment

Source: Gartner (July 2025)

“This pause does not stem from budget cuts, as budgets remain fully allocated,” said Lovelock. “Rather, it is a strategic decision to delay new expenditures. The IT hardware and infrastructure sectors are particularly affected due to price increases and supply chain disruptions. In contrast, ongoing or recurring spending, such as cloud and managed services, is maintaining greater stability.”

Economic (41%) and geopolitical (32%) shocks present the greatest risk according to business leaders. Leaders believe they can handle pressure from customers, competition and regulation successfully.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in Gartner Market Databook, 2Q25 Update.