Gartner warns IT spending growth may not be as strong as expected — and AI is to blame
Gen AI investment is affecting other areas of spending, Gartner says
When you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.
IT spending across the world will be slightly lower than expected in 2024 as the cost of investing in generativeAI toolsbegins to hit businesses everywhere, experts have warned.
Areportfrom 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.”
Are you a pro? Subscribe to our newsletter
Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features and guidance your business needs to succeed!
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.
More from TechRadar Pro
Mike Moore is Deputy Editor at TechRadar Pro. He has worked as a B2B and B2C tech journalist for nearly a decade, including at one of the UK’s leading national newspapers and fellow Future title ITProPortal, and when he’s not keeping track of all the latest enterprise and workplace trends, can most likely be found watching, following or taking part in some kind of sport.
New fanless cooling technology enhances energy efficiency for AI workloads by achieving a 90% reduction in cooling power consumption
Samsung plans record-breaking 400-layer NAND chip that could be key to breaking 200TB barrier for ultra large capacity AI hyperscaler SSDs
NYT Strands today — hints, answers and spangram for Sunday, November 10 (game #252)
