Global IT Spending to Reach $5.26 Trillion in 2024, Driven by Generative AI

Worldwide IT spending is projected to total $5.26 trillion in 2024, marking a 7.5% increase from 2023, according to the latest forecast by Gartner, Inc. Although this growth rate is slightly lower than the previous quarter's forecast of 8%, the overall spend forecast has increased from $5.06 trillion.

“Generative AI (GenAI) is impacting all technology segments and subsegments, though not universally beneficial,” said John-David Lovelock, distinguished VP analyst at Gartner. “While some software spending increases can be attributed to GenAI, for software companies, GenAI often acts as a tax. Revenue gains from the sale of GenAI add-ons or tokens typically flow back to their AI model provider partners.”

Data Center Systems Spending Surges
One of the most significant shifts in IT spending is seen in data center systems, where spending is expected to surge by 24% in 2024, up from a previous forecast of 10% growth. This increase is largely driven by the heightened demand for computing power necessary to support GenAI.

“The compute power needs of GenAI are being felt across the data center, and spending in that segment reflects this ravenous demand,” Lovelock explained.

IT Services Spending Growth Adjusts
IT services spending, now projected to grow by 7.1% in 2024, has been revised down from the previous forecast of 9.7%. This adjustment is partly due to slower spending across subsegments, including consulting and business process services.

“The change fatigue in CIOs that we saw at the start of the year has now abated, and the contract backlogs from the third quarter of 2023 are being cleared. We expect to see a larger rush towards the end of the year to make up for the slow start,” added Lovelock.

Gartner’s IT spending forecast is based on rigorous analysis of sales data from over a thousand vendors across the entire range of IT products and services.