Global IT spending set to hit a 30-year high by end of 2025

Global IT spending has grown at the fastest rate in nearly 30 years, according to IDC, largely thanks to the boom in AI and cloud services and PC refresh cycles.

Figures from IDC's latest Worldwide Black Book show that spending on hardware, software, and IT services is on course to rise by 14%. That's the fastest year of growth since 1996, when the launch of Windows 95, expanding PC usage, and internet adoption were the primary drivers of IT spending.

Now it's all about the massive AI infrastructure investment wave driving another ‘supercycle’ of tech spending, IDC noted, with the figure set to reach $4.25 trillion.

Total ICT spending, which includes telecom and business services, as well as IT spending, will reach almost $7 trillion this year, the consultancy found.

The report marks seven consecutive months in which spending has risen - reflecting continued over-performance and aggressive investments by service providers in AI infrastructure.

This month’s figures were also boosted by strong enterprise software spending, with many organizations continuing with digital transformation and cloud migration projects.

IDC said it now expects software spending to increase by 14% in the year ahead, with AI deployments adding to investments in security, optimization and analytics.

“AI is the headline of IT market performance in 2025, but most of the actual AI investment this year is concentrated in service provider infrastructure,” said Stephen Minton, group vice president at IDC.

“This AI investment is partly supported by enterprise spending on core IT products and services, which make up the strong revenue streams of the service providers investing heavily in AI deployment."

With this AI investment supporting economic growth and stability, businesses can more easily maintain their investments in cloud services and enterprise software, Minton added.

"As a result, we’re currently experiencing a virtuous cycle of tech-driven macroeconomic growth,” he said.

IT spending boom shows no signs of slowing

According to IDC, IT spending increased by 16% in the first quarter of this year, partly due to front-loading of PC shipments ahead of anticipated tariffs in the second quarter.

Spending across Q1 marked the fastest quarterly IT market growth in 29 years, the consultancy noted.

Elsewhere, enterprise IT spending increased by 11% in Q1 and 10% in Q2. But it's service provider spending on data center infrastructure – spanning servers, storage, and network equipment – that's set to skyrocket.

Indeed, IDC projects an overall increase of 86% in 2025, reaching almost half a trillion dollars.

There's no sign of any slowdown, either. With most businesses planning to increase IT budgets again in 2026, IDC reckons the figure will rise by 10% in 2026, slower than 2025 but still representing one of the strongest years for the industry since the 1990s.

“There are headwinds and downside risks in the 2026 outlook, including an expected memory component shortage which may drive up PC prices next year,” said Minton.

"Technology demand has been resilient this year in the face of uncertainty around tariffs and a sluggish global economy, but our baseline forecast calls for a stable economy, supported in part by ongoing AI investment," he added.

"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.”

Make sure to follow ITPro on Google News to keep tabs on all our latest news, analysis, and reviews.

MORE FROM ITPRO

• Global AI spending is set to hit $2 trillion next year
• Why cybersecurity spending is skyrocketing
• Increased IT spending marred by industry price hikes