From The Next Platform, September 25:
When we try to predict the weather, we use ensembles of the initial conditions on the ground, in the oceans, and throughout the air to create a kind of probabilistic average forecast and then we take ensembles of models, which often have very different answers for extreme weather conditions like hurricanes and typhoons, to get a better sense of what might happen wherever and whenever we are concerned.
Trying to figure out markets is no different. More data is better, and you have to look at ensembles of data and their underlying assumptions to try to reckon what might happen. There is a certain amount of gut instinct about human behavior and economic vectors as well, which is not precisely scientific but that’s people for you. And so we try to look at as much data as we can in sussing out a market, fill in gaps where we see them, inform this with what we know about underlying component and system suppliers, and give you a likely scenario so you can plan your IT spending, your own compensation, and therefore your own life. (That’s also why we keep track of things, to be honest.)
With that, we turn our attention to the latest AI spending forecast from the market researchers at Gartner, which you can see a bit of in the public statement it made about a much deeper report it has done. The upshot is that Gartner has updated its forecast for a more ebullient AI spending environment. A day doesn’t seem to go by when someone isn’t throwing a few billion, or tens of billions, or even hundreds of billions of dollars around over the next four or five years.
Where all of this money is supposed to be coming from is still not clear, and that is either hope or deliberate obfuscation. It is hard to say because companies like OpenAI and Anthropic and xAI, which are driving a lot of spending on AI hardware and software, are privately held and have no obligation to talk about where they anticipate their funds for massive AI installations – often in multi-gigawatt capacity chunks – will come from. Thus far, none of their services generates anything close to the revenue streams necessary to support the kinds of investments we are chronicling here at The Next Platform. For their part, Nvidia, Oracle, and the neoclouds that are involved are talking about their investments and their orders, which for OpenAI in particular are stunning in their magnitude.
Like us, and like you, companies like Gartner have to look at all that is being announced and try make sense of it – in Gartner’s case by jamming it into a global IT spending model. Here is the AI spending Gartner thinks happened in 2024 and will happen in 2025 (which is nearly three-fourths over) and in 2026 (which everyone is absolutely salivating over):
The spending data from both IDC and Gartner always includes datacenter gear – the five Ss of servers, switching, storage, software, and services – and end user device gear – meaning desktop PCs, laptop PCs, tablets, and smartphones. They don’t agree on whether or not to count telecom services in the IT spending pie – IDC does, Gartner doesn’t – and that skews the numbers between the two quite a bit.
As you can see from the table above, we are talking about a lot of AI spending in 2024 and being forecast for 2025 and 2026. Gartner reckons that AI spending across all categories amounted to an absolutely huge $987.9 billion last year, and believes that based on current trends and the eight months under our belts here in 2025 will grow by 49.7 percent to a stunning $1.48 trillion in 2025. But the bucks do not stop there. Gartner is forecasting that AI spending will keep motoring with 36.8 percent growth in 2026 to crest above $2 trillion.
It sure does look like a bunch of people are going to get rich....
....MUCH MORE
