Global IT spending is on track to hit a historic milestone, reaching its fastest growth rate in nearly three decades.

According to IDC’s latest Worldwide Black Book, spending on hardware, software and IT services is projected to rise by 14% by the end of 2025.

Total ICT spending, which includes telecom and business services, as well as IT spending will reach almost $7 trillion this year, the consultancy found.

The surge is being driven by a massive wave of AI infrastructure investment with the figure set to reach $4.25 trillion, alongside ongoing cloud migration projections and enterprise digital transformation initiatives.

IDC forecasts software spending to increase by 14% in the year ahead, with AI deployments adding to investments in security, optimisation and analytics.

Stephen Minton, Group Vice President of IDC, said: “AI is the headline of IT market performance in 2025, but most of the actual AI investment this year is concentrated in service provider infrastructure.

This AI investment is partly supported by enterprise spending on core IT products and services, which make up the strong revenue streams of the service providers investing heavily in AI deployment.”

He added: “With this AI investment supporting economic growth and stability, businesses can more easily maintain their investments in cloud services and enterprise software. As a result, we’re currently experiencing a virtuous cycle of tech-driven macroeconomic growth.”

Spending across Q1 marked the fastest IT market growth since 1996, driven partly by front-loading of PC shipments ahead of anticipated tariffs. Enterprise IT spending rose 11% in Q1 and 10% in Q2, while service provider investment in data centre infrastructure is expected to surge.

IDC projects this category to grow by 86% in 2025, reaching almost half a trillion dollars.

Andy Ward, SVP International of Absolute Security, commented: “Gen AI has ramped up the sophistication and scale of cyber risks facing businesses, creating new attack vectors to exploit both software and people.

Our research shows that almost half of CISOs admit that their teams are not prepared to handle AI-driven threats such as those posed by tools like DeepSeek, and as each new risk emerges, the strain on resilience grows.”

These risks will remain heading into 2026, requiring businesses to follow NCSC warnings and guidance, as well as implement robust cyber resilience strategies to ensure they are best prepared for when, not if, a cyber-attack occurs. Providing centralised security teams with the capability to identify suspicious behaviour and freeze, or shut off, potentially compromised devices to isolate security incidents and protect the wider business network.

By taking an approach combining regulatory guidance, organisation-wide cyber awareness training, and having clear cyber resilience protocols in place, businesses can mitigate the risk of downtime and stay operational for longer.”

Despite global economic uncertainties, IDC emphasises that technology demand has remained resilient and that most businesses are planning to increase IT budgets again in 2026, with spending projected to rise by 10%