Denys Rudyi - Fotolia
Global IT spending to soar in 2025
S&P Global Ratings expects a 9% surge in global IT spending for 2025, fuelled by demand for AI and cloud technologies, despite potential trade headwinds and a slowing global economy
The global IT industry is set to grow by 9% in 2025, outpacing the expected global GDP growth of 3% despite lingering global economic uncertainties and potential disruptions stemming from US trade policies, according to a report from S&P Global Ratings.
The credit ratings agency attributed this to the growing momentum in artificial intelligence (AI) and cloud computing. Hyperscale cloud providers, leading the charge in AI infrastructure investment, are expected to see continued revenue growth exceeding 20% in 2025. This growth is being fuelled by the ongoing enterprise migration to the cloud and the growing monetisation of AI technologies.
“While significant uncertainties remain around global trade, we believe the global IT spending will see robust growth in 2025,” the agency noted in a recent report. “The demand for AI and cloud computing is proving resilient, driving growth across various segments of the industry.”
The report also highlighted the critical role of software in digital transformation initiatives. Software spending is expected to accelerate to around 10% growth in 2025, driven by the increasing integration of AI into business applications and workflows.
However, the current pace of AI investment is unlikely to be sustained beyond 2025, suggesting potential shifts in the industry landscape in the years to come.
Spending on hardware is also expected to grow in 2025. After a relatively subdued performance in recent years, server shipments are set to grow by 4%, driven by hyperscaler investments and a gradual recovery in enterprise spending.
Network equipment, after facing a downturn in 2024, is predicted to rebound with 7% growth, thanks to the increasing demand for robust and secure network infrastructure to support complex AI projects.
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- VMware customers in India and the Asia-Pacific region are concerned about higher costs even as they see the benefits of subscription-based pricing and product bundling in the longer term.
The semiconductor industry, which has benefitted from the ongoing AI boom, is expected to continue to grow, albeit at a moderated pace compared with the breakneck speed of 2024. While memory revenue growth is projected to slow down, all other segments, including logic, microcontrollers and analogue, are expected to see healthy growth in 2025.
However, the report noted the looming uncertainty surrounding China, a major player in the global technology landscape. China accounts for about 10% of global IT spending and plays a crucial role in the hardware and semiconductor supply chains. Any disruption in US-China relations or the global supply chain could significantly impact global IT spending.
While the overall outlook for the IT industry remains positive, the agency cautioned that certain segments, such as PCs and smartphones, face a more uncertain future. Although both markets are expected to see modest growth in unit shipments, profitability remains a challenge due to intense competition and fluctuating demand.
“We maintain a positive long-term view of the technology industry,” the report noted. “Industries from healthcare to energy will increase their investments in IT, and AI in particular, to increase sales, hasten R&D, and achieve operational efficiency.”
In addition, the increasing adoption of “as-a-service” models, which IDC predicts will account for over 50% of enterprise technology spending by 2025, will make the sector more resilient to economic downturns.
