- AI could be driving up IT spending in 2026, but geopolitical influences are inflating it
- Rising costs are also forcing companies to shell out more for the same services.
- Data center systems are the fastest growing category
IT spending is expected to increase 11.1% in 2026 to reach $1.43 trillion, and it’s no surprise that the continued deployment of AI is driving much of that growth.
Gartner’s latest projections claim that spending on generative AI models is one of the largest categories, especially in Europe, with an expected increase of 78.2%.
Gartner explained that investments in cloud and cybersecurity, along with artificial intelligence tools, will continue despite tight budgets across the industry and limited workforce growth.
IT spending soars despite headwinds
Although companies are willing to invest more money in technology, there is a clear evolution at play with a greater focus on smarter, more efficient and more personalized options.
An overview of five key categories shows that the biggest growth is coming from data center systems, up 18.8% year over year; however, this is still the smallest overall expense in terms of dollar value.
The highest percentage is attributed to IT services, followed by software, communication services and devices.
But the increase in spending is not necessarily due to companies wanting 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 suppliers,” explained distinguished vice president and analyst John-David Lovelock.
Furthermore, Garner expects 35% of countries to be locked into region-specific AI platforms, up from 5% currently. This shift toward regionally hosted cloud services is also expected to drive 24% growth in public cloud spending in 2026.
Worse yet, Gartner analysts explain that price increases are artificially inflating the figure, suggesting growth may not be as high as projections indicate.
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