Worldwide tech spending is ready to defy economic uncertainty and trade risks, and rise 9% this year because of artificial intelligence (AI) and cloud investments.
The bumper year is a testament to robust AI spending, especially among the industry’s biggest names who are going all in despite a volatile economy and DeepSeek’s efficiency breakthrough, according to the S&P Global Ratings report.
Market researcher Gartner is even more bullish: It pegs worldwide IT spending at $5.62 trillion in 2025, up about 10% from 2024.
Data centers, devices and software will drive double-digit growth, largely because of generative AI (GenAI) hardware upgrades. However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware, according to Gartner.
“Hyperscalers will continue their aggressive AI infrastructure investments,” S&P Global analysts said in their report, pointing to projected massive capital expenditures from Meta Platforms Inc., Microsoft Corp., Alphabet Inc.’s Google, and Amazon.com Inc.
The Fab Four of the so-called magnificent seven stocks have committed to invest $325 billion in 2025 as capital expenditure for AI infrastructure, a whopping 46% year-over-year increase.
The companies said in their latest earnings conference call that huge investments are necessary to remain competitive as demand for AI space grows exponentially. Bloomberg Intelligence estimates GenAI spending will mushroom to $1.3 trillion in 2032 from $67 billion in 2023.
Data center growth is so enormous, the quartet is collaborating with nuclear energy producers to meet massive electricity demands.
Profligate spending comes at a time when DeepSeek’s recent low-cost, high-performance R1 model debuted, prompting murmurs that the Chinese AI startup’s impact might curtail spending.
But hyperscalers interpret the success of DeepSeek and improved efficiency as a catalyst for broader AI adoption. Though the memory market braces for a temporary slowdown in early 2025, S&P Global analysts predict a strong second half fueled by continued AI adoption of genAI and agentic AI, as well as the transition from Windows 10 PCs, whose support ends in October, to those powered by AI.
“Recent trade policy developments are accelerating hardware purchases as customers seek to get ahead of potential tariffs,” S&P Global analysts wrote. “While we don’t anticipate tariff-related rating changes for global tech companies, any escalation could increase economic uncertainty and create downside risk.”
Growing demand for AI technology was highlighted in a recent Futurum Group survey of 852 IT decision makers this year: 62% said AI PC adoption in the enterprise is being influenced by IT departments’ laser focus on “future-proofing” their organizations’ push into AI.
The results illustrate the essential role AI PCs are expected to play in the expanding ecosystem of AI tools and solutions. It also makes clear the impact the introduction of AI PCs is already having on the personal computer refresh cycle as well as the shifting competitive dynamics of the PC semiconductor vendor ecosystem, according to the report.
