GenAI initiatives drive IT spending in 2024 and beyond - Gartner

Stamford, Connecticut – Worldwide IT spending is expected to total $5.06 trillion in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner, Inc. This is an increase from the previous quarter’s forecast of 6.8% growth and puts worldwide IT spending on track to surpass $8 trillion well before the end of the decade. 

“With spending on IT services on track to grow by 9.7% to eclipse $1.52 trillion, this category is on pace to become the largest market that Gartner tracks,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Enterprises are quickly falling behind IT service firms in terms of attracting talent with key IT skill sets. This creates a greater need for investment in consulting spend compared to internal staff. We are at an inflection year for this trend, with more money being spent on consulting than internal staff for the first time.” 

Data Center Systems Investment Illustrates Shift in Focus to GenAI Spending

Spending on data center systems is expected to see a notable jump in growth from 2023 (4%) to 2024 (10%), in large part due to planning for generative AI (GenAI) (See Table 1). 

“We are seeing a cycle of story, plan, execution when it comes to GenAI. In 2023, enterprises were telling the story of GenAI and in 2024 we are seeing most of them planning for eventual execution in 2025,” said Lovelock. “Technology providers are required to be a step ahead of this cycle and are already in the execution phase. They are bringing GenAI capabilities to existing products and services, as well as to use cases being identified by their enterprise clients. 

“There is also gold rush level spending by service providers in markets supporting large scale GenAI projects, such as servers and semiconductors,” said Lovelock. “In 2024, AI servers will account for close to 60% of hyperscalers total server spending.”

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars) 

_{Source: Gartner (April 2024)}

Devices Expected to Bounce Back in 2024

The average lifespan for mobile phones is shortening and consumers and enterprises are replacing mobile phones earlier. This change allows device spending to achieve $688 billion during 2024, up from 2023 spending lows of $664 billion, which will represent a 3.6% growth rate. The integration of GenAI capabilities in premium and basic phones sustains, more than drives, this change.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 1Q24 Update.” 

Learn more in the complimentary Gartner webinar IT Spending Forecast, 1Q24 Update: GenAI - Where is All the Money? taking place April 18th at 11am EDT.