- AI could push up IT spending in 2026, but geopolitical influences inflate this
- Rising costs also force businesses to pay more for the same services
- Data center systems are the fastest growing category
IT spending will increase by 11.1% in 2026 to $1.43 trillion – and it comes as no surprise that continued AI deployment will drive much of this growth.
The latest Gartner forecasts claim that spending on Generative AI models is one of the largest categories in Europe, especially with an expected increase of 78.2%.
Gartner explained that investments in cloud and cybersecurity, along with AI tools, will continue despite tight industry-wide budgets and limited headcount.
IT expenses are increasing despite headwinds
Although companies are set to plow more money into technology, there is a clear evolution at play with a greater focus on smarter, more efficient and more personalized options.
A breakdown across five key categories shows that the biggest growth comes from data center systems, up 18.8% year-over-year, but this remains the smallest overall spend in terms of dollar value.
The largest is attributed to IT services, followed by software, communication services and devices.
But the increase in spending is not necessarily because companies want to expand what they have.
“Europe faces regulatory pressures, competition between countries, geopolitical tensions and national security concerns – all focused on ensuring that Europe can develop and manage AI systems on its own, without relying on foreign platforms or providers,” explained VP Analyst John-David Lovelock.
Separately, Garner expects 35% of countries to be locked into region-specific AI platforms, up from 5% today. This shift toward regionally hosted cloud services is also expected to drive 24% growth in public cloud spending by 2026.
Even worse, analysts at Gartner explain that price increases artificially inflate the number, suggesting that growth may not be as high as projections indicate.
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