- AI could increase IT spending in 2026, but geopolitical influences are inflating that number
- Rising costs also force businesses to pay more for the same services.
- Data center systems are the fastest growing category
IT spending is expected to grow 11.1% in 2026 to $1.43 trillion – and it’s no surprise that the continued deployment of AI is driving much of this growth.
Gartner’s latest projections claim that spending on generative AI models is one of the largest categories in Europe, with an expected increase of 78.2%.
Gartner explained that investments in cloud and cybersecurity, as well as AI tools, will continue despite tight industry-wide budgets and limited headcount growth.
IT spending soars despite headwinds
Although businesses are ready to invest more money in technology, a clear evolution is underway, with an increased focus on smarter, more efficient and more personalized options.
A look at five key categories shows the biggest growth coming from data center systems, up 18.8% year-over-year, but it remains the lowest overall spend in terms of dollar value.
The largest share is attributed to IT services, followed by software, services and communication devices.
But the increase in spending isn’t necessarily because companies want to expand what they have.
“Europe faces regulatory pressures, competition between countries, geopolitical tensions and national security concerns, all aimed at ensuring that Europe can develop and manage AI systems on its own, without relying on foreign platforms or suppliers,” explained John-David Lovelock, distinguished vice president analyst.
Additionally, 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 in 2026.
Worse, Gartner analysts say price increases artificially inflate the number, suggesting growth may not be as high as projections indicate.
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