📚 Gartner: AI to drive 10% jump in spending on data center systems

Global IT spending is forecast to hit $5.06 trillion in 2024, an increase of 8% from 2023, according to new data from Gartner. The hike puts worldwide IT spending on track to surpass $8 trillion well before the end of the decade, the research firm projects.

Spending on data center systems, in particular, is expected to see a notable jump in growth. In 2023, worldwide spending on data center systems grew 4%. In 2024, Gartner is forecasting 10% growth, in large part due to planning for generative AI, according to John-David Lovelock, distinguished vice president analyst at Gartner.

“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,” Lovelock said in a published statement. “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.”

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

Beyond AI’s impact, Gartner found software and IT services spending to be on the uptick as well, with 13.9% and 9.7% growth expected, respectively.

“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,” Lovelock stated. 

He drew a link between spending on IT services and enterprise hiring challenges: “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.” 

Dell’Oro: AI workloads drive enterprise data center investments

Gartner’s IT spending forecast notes the impact of genAI initiatives. Likewise, recent research from the Dell’Oro Group found that mission-critical AI workloads will drive investments in accelerated computing for private data centers.

“Dell’Oro Group predicts that in 2027, over a quarter of data center switch ports shipped to large enterprises will be 400 Gbps or higher, compared to 9% in 2022. The adoption of higher speed interfaces will be driven by AI and High-Performance Compute (HPC) applications,” the research group stated.