The IT sector had its best year since 1996 — thanks to AI

According to research firm IDC, 2025 was the IT sector’s best year in nearly three decades. The reason — unsurprisingly — is the massive investment in AI infrastructure.

The research firm predicts that global spending on IT (hardware, software, and IT services) will reach $4.25 trillion this year, which  represents a 14% increase — the largest growth since 1996, when the introduction of Windows 95, along with increasing PC usage and internet penetration, significantly boosted IT spending.

All told, according to IDC, total ICT spending, including telecommunications and services, is expected to reach nearly $7 trillion dollars for 2025.

Data center spending is exploding

“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,” explained Stephen Minton, group vice president at IDC, in a statement about the report. “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.” 

IDC expects investments in data center infrastructure to reach almost half a trillion dollars for 2025, an 86% increase compared to the year prior.

AI narrative still intact in 2026

The forecast for the IT sector remains positive for next year as well. While there is much speculation about how and when this cycle might weaken, the research firm contends that there are currently no signs of an economic slowdown, and surveys continue to show that most companies intend to increase their IT budgets again in 2026 despite ongoing economic uncertainty.

“Our baseline forecast calls for a stable economy, supported in part by ongoing AI investment,” Minton added in the statement. “Even in a moderate recession, most IT spending would continue. The likelihood of a ‘perfect storm’ similar to the IT market crash of 2001 remains low.”