Agentic AI dominating budget expansion
The focus on AI will likely divert funding in other tech areas. Spending on IT, such as servers and storage, which are not related to AI, will be driven by efficiency and consolidation, limiting growth, market research firm International Data Corporation (DC) says in a forecast. The prediction comes shortly after big tech companies’ shares slid after fears of an AI bubble. IDC says year-over-year spending 2025 and 2029 for AI will grow by 31.9%. This investment, driven by the growth of agentic AI-enabled applications and systems to manage agentic fleets, will reach $1.3 trillion in 2029.
Another market research firm, Gartner, says that AI investment remains strong with a gradual change of focus from generative AI (GenAI) toward AI-ready data and AI agents.
“A sharper emphasis is being placed on using AI for operational scalability and real-time intelligence. This has led to a gradual pivot from GenAI as a central focus, toward the foundational enablers that support sustainable AI delivery, such as AI-ready data and AI agents”, says Haritha Khandabattu, Gartner senior director analyst.
40 per cent of enterprise applications will have task-specific AI agents by 2026, up from less than 5% today, according to Gartner.
“As organisations accelerate digital transformation, agentic AI in enterprise applications will move beyond individual productivity, setting new standards for teamwork and workflow through smarter human-agent interactions.”
Gartner forecasts agentic AI will drive approximately 30% of enterprise application software revenue by 2035, surpassing $450 billion, up from 2% in 2025.
“AI agents are evolving rapidly, progressing from basic assistants embedded in enterprise applications today to task-specific agents by 2026 and ultimately multiagent ecosystems by 2029,” says Anushree Verma, Sr Director Analyst at Gartner.
The IDC forecast talks about an “unprecedented surge in Agentic AI spending and signals a transformation within enterprise IT budgets—especially when it comes to software—to investment strategies led by products and services based on an agentic AI foundation.”
“This conversion is further supported by anticipated growth in platform solutions that enable companies to build, manage, and operate their agents more securely and efficiently.”
“An important takeaway from this forecast is the clear alignment between the growth in (AI) spending and IT leaders’ trust that effective use of AI can boost future business success,” says Rick Villars, group vice president at IDC.
“Application and Services providers that are behind in putting AI into their products and not extending them with agents are risking market share losses to companies that made the decision to put AI at the centre of their product development roadmap.”
The forecast also indicates that the adoption of agents and agentic AI will accelerate innovation in how companies use technology and code to transform their business.
“These investments and the evolution of related products will increasingly determine the success or failure of the business and tech leaders who put them in place, and the businesses that use them. For this reason, informed leadership will be critical to success during these next several years”, the IDC forecast says.
“This research reveals several important issues for businesses to consider about the interconnection between labour and AI investment,” says Crawford Del Prete, president at IDC.
“As an example, business leaders will need to pay particular attention to employee roles in an enterprise, and how roles change as agents become more commonplace in business. Agents will change the nature of work, making some roles highly productive, and others obsolete. Workers and enterprises will need to be more agile than ever before to keep pace.”
Another sign of trust in AI is AI chip maker Nvidia’s record sales: Second quarter revenue USD 46.7 billion and up 56% compared to the same period last year.
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