Gartner warns that IT spending growth may not be as strong as expected – and AI is to blame
Experts warn that global IT spending will be slightly lower than expected in 2024 as businesses around the world grapple with the costs of investing in generative AI tools.
a report Gartner argues that global IT spending will be impacted by the widespread desire to jump on the AI bandwagon, but also by the disappearance of a widespread general unease around technology.
This “change fatigue” that was apparently affecting CIO spending earlier in 2024 appears to have dissipated, with companies now looking to spend again, the firm predicted.
Gen AI Costs
Gartner expects worldwide IT spending to reach $5.26 trillion in 2024, an increase of 7.5% from 2023.
However, this is down from the 8% growth forecast in the previous quarter. Investment in generative AI is a large part of the costs, particularly in terms of data center spending, which is expected to grow by 24% through 2024.
“Generative AI (GenAI) is being felt across all technology segments and subsegments, but not to everyone’s advantage,” said John-David Lovelock, Distinguished VP Analyst at Gartner.
“Some software spending increases can be attributed to GenAI, but for a software company, GenAI most closely resembles a tax. Revenue gains from the sale of GenAI add-ons or tokens flow back to their AI model supplier partner.”
Elsewhere, spending on software is forecast to rise 12.6% and spending on devices 5.4%. Investment in IT services is expected to grow 7.1%, down significantly from 9.7% in the previous forecast, but Gartner says this was to be expected.
“The change fatigue among CIOs we saw at the beginning of the year has now subsided, and contract backlogs dating back to Q3 2023 are being cleared. We expect a larger rush toward the end of the year to make up for the slow start,” Lovelock said.
