ISG’s forecast corresponds with Gartner’s worldwide IT spending projection, which is expected to total US$5.43 trillion in 2025, an increase of 7.9 per cent from 2024, largely attributed to ongoing AI and generative AI digitisation initiatives 

Gartner noted there is a business pause on net-new spending due to a spike in global uncertainty, this is subsumed by ongoing AI initiatives, said Gartner distinguished vp analyst John-David Lovelock.  

“For instance, both software and services spending growth in 2025 is expected to slow down due to this ‘uncertainty pause,’ but spending in AI-related infrastructure, such as data centre systems, continues to surge,” he said. 

“Data centers are experiencing a surge driven by GenAI, with spending on AI optimised servers, which was virtually nonexistent in 2021, expected to triple that of traditional servers by 2027,” said Lovelock. 

Much like ISG’s research, Gartner belives starting early in the second quarter of 2025, there has been an “uncertainty pause,” encompassing a strategic suspension of net-new spending across various sectors, including IT.  

This pause is driven by heightened economic uncertainty and geopolitical risks. In response, the global corporate sector is exercising increased caution, as organizations seek to mitigate adverse impacts from these multifaceted challenges. 

The same Gartner survey found that 61 per cent of enterprises started 2025 in a better position than at the same time last year, but only 24 per cent expect to end the year ahead of their 2025 plans. This sentiment was consistent across all sectors to varying degrees 

“This pause does not stem from budget cuts, as budgets remain fully allocated,” said Lovelock. “Rather, it is a strategic decision to delay new expenditures.  

The IT hardware and infrastructure sectors are particularly affected due to price increases and supply chain disruptions. In contrast, ongoing or recurring spending, such as cloud and managed services, is maintaining greater stability.” 

Economic (41 per cent) and geopolitical (32 per cent) shocks present the greatest risk according to business leaders.  

Gartner said leaders believe they can handle pressure from customers, competition and regulation successfully.