A third upward revision in less than a year
Gartner's newest worldwide IT spending forecast, published July 27, puts 2026 spending at $6.37 trillion, a 14.2% increase over 2025. That is the third time in less than a year that Gartner has revised the number upward, having moved from an initial call of 9.8% growth exceeding $6 trillion, to 13.5% growth, and now to 14.2%, each revision arriving within months of the last. For CIOs building 2027 budgets off Gartner's numbers as a benchmark, the pattern itself is the signal: every quarter this cycle, actual enterprise spend has come in ahead of the analyst firm's prior estimate, which should make any CIO treating the current number as a ceiling rather than a floor think twice before finalizing next year's ask.
John-David Lovelock, Distinguished VP Analyst at Gartner, frames the scale in blunt terms, calling the AI compute build-out 'the largest infrastructure project ever attempted by humanity.' That is marketing-adjacent language for an analyst note, but the underlying category data backs up the scale claim. Data center systems spending alone is now forecast at $822 billion for 2026, a 62.5% jump that dwarfs growth in every other IT category Gartner tracks.
Where the money is actually going
Breaking down the $6.37 trillion by category tells the real budget story. Data center systems lead at 62.5% growth to $822 billion, by far the standout figure in the entire forecast. Infrastructure as a service follows at 29.3% growth to $287 billion, and software spending reaches $1.468 trillion, up 15.5% year over year. Devices spending grows a comparatively modest 9.8% to $868 billion, while communications services, the slowest growing major category Gartner tracks, is up just 4.4% to $1.354 trillion, roughly a third of the overall growth rate.
The category enterprise leaders should pay closest attention to is IT services, still the single largest line item at $1.57 trillion but growing at only 5.3%, well below the overall average and less than half the software growth rate. That gap between infrastructure growth and services growth suggests enterprises are increasingly buying compute and software capacity directly rather than routing incremental AI spend through systems integrators and consultancies, a shift with real implications for how CIOs structure vendor relationships and staffing decisions over the next full budget cycle.
Budgets are strained even as spending rises
Lovelock is careful to note that rising spend does not mean rising comfort. 'Technology budgets are strained by inflation, supply shortages, rising hardware and memory costs, and shifting priorities,' he said in the release. That framing matters because it separates two things CIOs often conflate: total spend growth and budget health. A 14.2% increase in total IT spend can coexist with individual CIOs feeling squeezed, particularly when memory and hardware price inflation is eating into the same dollars that were supposed to fund new AI initiatives rather than simply cover the rising cost of existing infrastructure commitments already on the books.
This tension is showing up concretely in procurement conversations. GPU and high bandwidth memory shortages have pushed data center hardware costs up sharply this year, meaning a chunk of the incremental spend Gartner is tracking is inflation, not incremental capacity. CIOs reconciling their own budget requests against this forecast should separate the volume story from the price story before using Gartner's growth rate as justification for a bigger ask internally.
What the services slowdown signals for delivery models
The relatively soft 5.3% growth in IT services spending, against double digit growth almost everywhere else, is worth sitting with. It suggests two possible dynamics running in parallel: enterprises building more AI capability in-house rather than outsourcing it, and AI coding and automation tools themselves compressing the labor hours that traditionally justified services line items. Either way, the era of routing AI initiatives primarily through large system integrator contracts appears to be giving way to direct infrastructure and platform purchasing.
For CIOs, this reinforces a build versus buy conversation that has been simmering all year. If services growth continues to lag infrastructure and software growth into 2027, expect procurement teams to push harder for platform level deals with cloud and AI infrastructure vendors directly, with integration work increasingly handled by smaller specialist shops or in-house platform teams rather than the large consultancies that dominated the last decade of enterprise transformation spend.
The planning takeaway for 2027 budgets
Gartner's forecast is not a prediction CIOs should take at face value for their own organization, but it is a useful external anchor when justifying budget requests to finance and the board. The headline number worth leading with in that conversation is the 62.5% growth in data center systems spend rather than the 14.2% overall figure, because that narrower category is where competitors are most likely making capacity commitments that create real capability gaps if an organization matches them too slowly.
The more actionable number for procurement teams is the IT services slowdown. CIOs currently locked into large multi-year systems integrator contracts for AI transformation work should use this data point to push for renegotiated scope and pricing, given that the market broadly is shifting spend away from services toward direct infrastructure and software purchasing. Budget conversations for 2027 should start now, while this data is fresh and before the next Gartner revision moves the target again, as it has three times already this cycle.
