AI investments growing despite investors being worried
Investors have reacted negatively to big tech companies plans to spend still more on AI with stocks sliding despite positive reports. A new global CEO survey by consultancy PwC shows that despite widespread experimentation, only 12% CEOs say that AI has delivered both cost and revenue benefits. Overall, 33% report gains in either cost or revenue, while 56% say they have seen no significant financial benefit to date. Worldwide IT spending is expected to reach $6.15 trillion in 2026, up 10.8% from 2025, according to market research firm Gartner.
“AI infrastructure growth remains rapid despite concerns about an AI bubble, with spending rising across AI‑related hardware and software,” says John-David Lovelock, VP Analyst at Gartner. “Demand from hyperscale cloud providers continues to drive investment in servers optimized for AI workloads.”
“Worldwide spending on AI infrastructure reached a record $86 billion in Q3 2025, marking a sustained investment cycle as platform providers scale capacity for training and inference workloads”, says market research firm IDC in a worldwide quarterly report.
“The record performance in Q3 2025 signals a shift from initial pilot phases into a multi-year expansion, with full-year 2025 spending projected to reach $334 billion and more than $902 billion by 2029. Growth is expected to remain above 30% annually through 2027, before moderating into the mid-20% range in the latter years of the forecast.”
“The results highlight the central role of accelerated computing as enterprises and cloud providers move to support increasingly complex AI workloads.”
IDC estimates that the US remains the largest AI infrastructure market in 2025, accounting for approximately 76% of global spending with investment projected to grow from $254 billion in 2025 to nearly $708 billion by 2029. Growth is driven by hyperscalers and AI platform leaders expanding large-scale data cent capacity.
China (PRC) is the second fastest growing major region over the forecast period, with spending projected to increase from $39.1 billion in 2025 to more than $139 billion by 2029, supported by continued investment in domestic AI platforms and sovereign AI initiatives.
The report notes that risks for the market include power generation capacity that is becoming the main bottleneck for deploying GPU servers on a scale. Increasing costs and scarcity of parts such as disks and memory could also negatively impact infrastructure demand as IT budgets may be closed to a limit on expansion terms.
“Regulatory and data-sovereignty requirements (where workloads can run) will determine compliance and localization and could reshape where capacity is built and who wins enterprise deals (and can add cost/complexity). Export controls can determine rules and licensing across the globe and create uncertainty.”
Gartner says server spending is projected to accelerate in 2026, growing 36.9% year-over-year. Total data centre spending is expected to increase 31.7%, surpassing $650 billion in 2026, up from nearly $500 billion the previous year.
Software spending growth for 2026 has been slightly revised downward to 14.7%, from 15.2% for both application and infrastructure software.
“Despite the modest revision, total software spending will remain above $1.4 trillion. Projections for generative AI model spending in 2026 remain unchanged, with growth expected at 80.8%. GenAI models continue to experience strong growth, and their share of the software market is expected to rise by 1.8% in 2026”, says Lovelock.
The PwC global CEO survey shows:
- Only 30% are confident about revenue growth in 2026 as most struggle to turn AI investment into tangible returns.
- 12% say AI has delivered both cost and revenue benefits, while companies that have scaled AI with strong foundations are pulling ahead.
- Rising concerns about tariffs and cyber risk add to pressure, as CEOs question whether they are transforming fast enough.
- The US remains the top destination for global investment, with interest in India doubling year-on-year.
“The biggest question on CEOs’ minds is whether they are transforming fast enough to keep pace with technological change, including AI. Forty-two percent cite this as their top concern—well ahead of worries about innovation capability or medium to long-term viability (both 29%).”
“The survey points to a growing divide between companies piloting AI and those deploying it at scale. CEOs reporting both cost and revenue gains are two to three times more likely to say they have embedded AI extensively across products and services, demand generation, and strategic decision-making.”
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