IT spending set to hit $1.4 trillion in 2026 - but what exactly are we spending it on?

• AI could be pushing IT spend up in 2026, but geopolitical influences are inflating this
• Rising costs are also forcing companies to fork out more for the same services
• Data center systems are the quickest growing category

IT spending is set to rise 11.1% in 2026 to hit $1.43 trillion - and it comes as no surprise that continued AI deployment will drive much of that growth.

The latest Gartner projections claim Generative AI model spending is one of the biggest categories in Europe especially, with a 78.2% rise expected.

Gartner explained cloud and cybersecurity investments, together with AI tools, will continue despite industry-wide tight budgets and limited headcount growth.

IT spending soars despite headwinds

Although enterprises are set to plough more money into tech, there's a clear evolution at play with a bigger focus on smarter, more efficient and more personalized options.

An overview across five key categories shows the biggest growth coming from data center systems, up 18.8% year-over-year, however this remains the smallest overall expense in terms of dollar value.

The biggest is attributed to IT services, followed by software, communication services and devices.

But the rise in spend isn't necessarily because companies want to expand what they have.

"Europe is facing regulatory pressure, competition between countries, geopolitical tensions, and national security concerns-all focused on making sure Europe can develop and manage AI systems on its own, without depending on foreign platforms or providers," Distinguished VP Analyst John-David Lovelock explained.

Separately, Garner expects 35% of countries to be locked into region-specific AI platforms, up from 5% today. This shift towards regionally hosted cloud services is also expected to drive a 24% growth in public cloud spending in 2026.

Worse still, analysts at Gartner explain that price increases are artificially inflating the figure, which suggests growth might not be as high as projections indicate.

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