Gartner warns IT spending growth may not be as strong as expected

IT spending across the world will be slightly lower than expected in 2024 as the cost of investing in generative AI tools begins to hit businesses everywhere, experts have warned.

A report from Gartner has claimed global IT spending will be affected by the widespread desire to jump on the AI bandwagon, but also the lifting of a widespread general malaise around technology.

This “change fatigue” which apparently affected CIO spending earlier in 2024, has apparently lifted, with companies now keen to spend again, the firm’s forecast claimed.

Gen AI costs

Overall, Gartner says it expects worldwide IT spending to hit $5.26 trillion in 2024, an increase of 7.5% from 2023.

However, this is a decrease from the 8% growth predicted in the previous quarter – with generative AI investment making up much of the costs, particularly in data center spending, which is expected to increase 24% in 2024.

“Generative AI (GenAI) is being felt across all technology segments and subsegments, but not to everyone’s benefit,” said John-David Lovelock, Distinguished VP Analyst at Gartner.

“Some software spending increases are attributable to GenAI, but to 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 provider partner.”

Elsewhere, spending on software is predicted to rise 12.6%, and device spending rising 5.4%. Investment on IT services is estimated to increase by 7.1%, a significant decrease on the 9.7% in the previous forecast, but one Gartner says was to be expected.

“The change fatigue in CIOs that we saw at the start of the year has now abated and the contract backlogs going back to 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,” said Lovelock.