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Home » Gartner Forecasts Worldwide GenAI Spending to Reach $644 Billion in 2025
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Gartner Forecasts Worldwide GenAI Spending to Reach $644 Billion in 2025

By dailyguardian.aeApril 2, 20253 Mins Read
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Gartner Forecasts Worldwide GenAI Spending to Reach $644 Billion in 2025

CIOs Must Prepare for Rising GenAI Spending in 2025, Fueled by Better Foundational Models and Growing Demand for AI Products

Dubai, United Arab Emirates, April 2, 2025 — Worldwide generative AI (GenAI) spending is expected to total $644 billion in 2025, an increase of 76.4% from 2024, according to a forecast by Gartner, Inc.

“Expectations for GenAI’s capabilities are declining due to high failure rates in initial proof-of-concept (POC) work and dissatisfaction with current GenAI results,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Despite this, foundational model providers are investing billions annually to enhance GenAI models’ size, performance, and reliability. This paradox will persist through 2025 and 2026.

“Ambitious internal projects from 2024 will face scrutiny in 2025, as CIOs opt for commercial off-the-shelf solutions for more predictable implementation and business value. Despite model improvements, CIOs will reduce POC and self-development efforts, focusing instead on GenAI features from existing software providers.” said Lovelock.

GenAI spending is poised for significant growth across all core markets and submarkets in 2025 (see Table 1). GenAI will have a transformative impact across all aspects of IT spending markets, suggesting a future where AI technologies become increasingly integral to business operations and consumer products.

Table 1. Worldwide GenAI Spending Forecast (Millions of U.S. Dollars) 

   2024 Spending  2024 Growth (%)  2025 Spending  2025 Growth (%)
Services  10,569 177.0 27,760 162.6
Software 19,164 255.1 37,157 93.9
Devices 199,595 845.5 398,323 99.5
Servers 135,636 154.7 180,620 33.1
Overall GenAI 364,964 336.7 643,860 76.4

Source: Gartner (March 2025)

AI Capable Consumer Devices to Drive GenAI Spending

GenAI spending in 2025 will be driven largely by the integration of AI capabilities into hardware, such as servers, smartphones and PCs, with 80% of GenAI spending going towards hardware.

“The market’s growth trajectory is heavily influenced by the increasing prevalence of AI-enabled devices, which are expected to comprise almost the entire consumer device market by 2028,” said Lovelock. “However, consumers are not chasing these features. As the manufacturers embed AI as a standard feature in consumer devices, consumers will be forced to purchase them.”

Gartner’s GenAI spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of GenAI products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner GenAI spending forecast delivers a unique perspective on GenAI spending across the hardware, software and IT services segments. These reports help Gartner clients understand market opportunities and challenges. The most recent GenAI spending forecast research is available to Gartner clients in “Forecast Alert: GenAI IT Spending, 2023-2028, Worldwide.”

Gartner CIO & IT Executive Conference 

Gartner analysts will provide additional analysis on insights and trends shaping the future of IT and business, including accelerating business transformation, application modernization, infrastructure and operations at the Gartner CIO & IT Executive Conference, taking place September 22-24 in São Paulo and October 6-8 in Dubai. Follow news and updates from the conference on X using #GartnerCIO.

About Gartner for High Tech
Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech.

Follow news and updates from Gartner for High Tech onX and LinkedIn using #GartnerHT. 

About Gartner

Gartner, Inc. (NYSE: IT) delivers actionable, objective insight to executives and their teams. Our expert guidance and tools enable faster, smarter decisions and stronger performance on an organization’s mission-critical priorities. To learn more, visit gartner.com.

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