The data is leaking out on how companies plan to integrate artificial intelligence into their overall technology budgets in 2024 and beyond.
Right now, business spending on AI may not be as much as companies and investors think.
All told, global information technology spending is estimated to crest $5.1 trillion in 2024, according to a new Gartner report.
AI-based spending currently seems to be in a holding pattern, although the technology is clearly on the minds of chief technology and chief financial officers in the last quarter of 2023.
“The impact of generative artificial intelligence will not be felt until 2025,” Gartner says. That would constitute an 8% increase from 2023, with Gen AI to comprise “very little IT spending”, in 2023 and 2024, with a significant uptick in 2025.
“However, organizations are continuing to invest in AI and automation to increase operational efficiency and bridge IT talent gaps,” said Gartner analyst John-David Lovelock. “The hype around generative AI is supporting this trend, as chief information officers recognize that today’s AI projects will be instrumental in developing an AI strategy and story before generative AI becomes part of their IT budgets starting in 2025.”
Down the Road, a Big Expansion With AI Spending
Senior executives tasked with IT budget management in the next three years or so are making some big – and interesting – decisions right now.
First off, companies have little or no inclination to curb technology spending in 2024, according to a new report from Sandy, Utah-based Telarus, a leading technology services distributor.
In fact, only 6% of CXOs rank cost-cutting as one of their top business issues driving technology buying decisions, Telarus reports. A big part of that equation is C-level executives’ unwillingness to make the same mistakes made in 2020 when companies stalled technology spending during the pandemic lockdowns.
Curbing technology spending – even in down economic cycles – makes it much more difficult to stay one step ahead of competitors, the report notes.
“The findings in this report illuminate many of the most vital trends in IT this year. The de-emphasis on cost-cutting represents a major shift from January and shows a resurgence of economic confidence,” says Constellation Research analyst Dion Hinchcliffe “Consequently, as IT decision-makers prioritize digital innovation, cybersecurity, and AI over the next few years, our survey data shows that most IT buyers today want and need expert advisory identifying and managing the right solutions in these uncharted areas for their businesses.”
On the subject of AI (non-generative and generative), cloud, and cybersecurity top future IT spending, Telarus says that, right now at least, AI experimentation currently represents a small portion of overall IT spending.
Yet over the next five years, CXOs envision the evolution of AI impacting virtually all areas of an organization.
“They also plan on widespread next-gen cybersecurity implementation to protect virtualized and AI-powered environments,” the report says. “Technology advisors ranked cybersecurity (80%), cloud (56%), and AI-enabled tech (46%) as the top areas they are seeing an increased interest among their customers.”
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
