Companies continue to splash out on AI, despite disillusionment with the technology
AI investment is precipitating colossal revenue increases in the semiconductor industry
Worldwide spending on AI will hit $2.5 trillion in 2026 according to analysts at Gartner, a 44% increase from 2025, and is expected to increase to $3.3 trillion in 2027.
This projected increase comes in spite of enterprises wallowing in the Trough of Disillusionment stage of Gartner’s own hype cycle, defined as a period where “interest wanes as experiments and implementations fail to deliver”, this year.
“[AI] will most often be sold to companies by their encumberment software provider rather than bought as part of a new moonshot project,” said David-John Lovelock, distinguished VP analyst at the firm.
“The improved predictability of ROI must occur before AI can truly be scaled up by the business,” Lovelock added.
This issue of ROI – or lack thereof – plus the failure of many AI projects were repeated refrains throughout 2024 and 2025. Research from MIT showed that, in 2025, 95% of organizations reported zero return on investment in generative AI projects.
In terms of where 2026’s AI investment will be made, AI infrastructure gets the lion’s share with an anticipated $1.3 billion of cash being poured into this area, according to Gartner.
This is almost 50% of the total 2026 uplift and nearly twice as much as the next target for investment, AI services ($588.6 million), with AI software coming in a close third place ($452.5 million).
This increasing investment in what Gartner describes as the foundations of AI has already been reflected in the revenue growth among semiconductor manufacturers in 2025.
In separate research, the analyst firm found that semiconductor revenue increased 21% year-over-year in 2025, reaching $793 billion.
The big AI investment winners
Leading the pack was Nvidia, a company that has firmly tied its fortunes to the AI wave, with an estimated $125.7 million in revenue and 15.8% market share.
This was followed by Samsung Electronics ($72.5 million and 9.1% market share) and SK Hynix ($60.6 million and 7.6% market share).
Of the top 10 vendors by revenue, all experienced double-digit growth except Intel, which fell by 3.9%, or just under $2 million.
This pattern is expected to continue in the coming year, according to Rajeev Rajput, senior principal analyst at Gartner.
"AI semiconductors – including processors, high-bandwidth memory (HBM), and networking components continued to drive unprecedented growth in the semiconductor market, accounting for nearly one-third of total sales in 2025.
“This domination is set to rise as AI infrastructure spending is forecast to surpass $1.3 trillion in 2026."
FOLLOW US ON SOCIAL MEDIA
Make sure to follow ITPro on Google News to keep tabs on all our latest news, analysis, and reviews.
You can also follow ITPro on LinkedIn, X, Facebook, and BlueSky.
-
The NCSC wants to build an AI-powered 'Cyber Shield' to protect the UK from hackersNews The aim is to create a national, sovereign defence capability to protect government agencies and critical infrastructure
-
IBM targets data center efficiency gains with new z17 and LinuxONE offeringsNews Cost, data center footprint, and performance improvements are coming for IBM Z and LinuxONE customers
-
AI projects are stalling at mid-market firms – Google Cloud and Accenture want to solve thatNews The new scheme aims to help mid-market companies move from pilot to production faster than ever before
-
FCA recommends expanded powers to boost financial services AI regulationNews The regulator has called for another review about whether AI needs to be regulated
-
UK business leaders have a 'limited understanding' of AI usage costs – and it's coming back to bite themNews Companies where CEOs are accountable for AI decisions report higher confidence in their strategy
-
What are the minimum skills for AI use?We're all talking about AI but do we all have the right skills to maximize its potential in our roles, departments, and organizations?
-
Forget tokenomics – agents are a personnel costLooking at AI agents as an IT cost is to misunderstand what they are, says HPE chief
-
Sluggish AI returns ignored as ‘fear of missing out’ continues driving investmentNews Poor returns on investment aren’t stopping the sharp increase in AI investment
-
Dell raises annual forecasts as AI boom continues to reward hardware vendorsNews Supply chain adjustments and shrewd management of the memory chip shortage help Dell capitalize on increased demand for AI
-
Samsung averts strike action with AI-funded bonuses for chip workersNews Deal with unions, mediated by the South Korean government, ends long-running dispute over bonus cap
