CIOs pause net-new IT investments as global tariff jitters bite
(2025/07/15)
- Reference: 1752575290
- News link: https://www.theregister.co.uk/2025/07/15/gartner_it_spending_forecast/
- Source link:
World War Fee Gartner has trimmed its growth forecast for worldwide IT spending in 2025 as an "uncertainty pause" hits net new spending, caused in part by the unpredctability of US President Donald Trump's trade tariff policy.
In January, the tech analyst [1]estimated growth in global IT spending this calendar year would hit $5.61 trillion, up 9.8 percent versus the prior twelve months. Now it expects expenditure to rise 7.9 percent.
The adjusted figure is related to changes in exchange rates and CIOs pausing net-new spending, which began to show itself from April when Trump ratcheted up his threats of imposing higher taxes on US imports.
[2]
John-David Lovelock, distinguished vice president and analyst at Gartner, said the US was in the middle of "a reboot of its global trade policy" in reference to the tariffs proposed by Trump, many of which are still in negotiation, notably with the EU.
[3]
[4]
"The rest of the world is taking a pause," Lovelock said. "It's not fair to say that the geopolitical situation is causing it. It's not even really fair to say that it's a macroeconomic condition, although you will hear that often. It's not about GDP or interest rates or inflation or unemployment. It's about 'we're not sure where this reboot is going to land, and we're going to pause until we do figure it out'."
As a result, many organizations have halted expansion, delaying product purchases and hiring. "They're pausing new IT spending," Lovelock said. "Budgets aren't affected yet, they're still fully enforced. They're just pausing new spending."
[5]
Investment bank Jefferies noted some months back that [6]CIOs had frozen projects as they take stock of how tariffs may impact them. An incoming wave of tariffs scheduled for [7]August 1 are expected to result in tech prices becoming more expensive.
IT hardware and infrastructure are likely to be most affected by changes to US trade policy, Gartner says, and they may see price increases and supply chain disruptions as a result. Recurring spending, for example on cloud and managed services, is likely to be more stable. However, the growth in AI-optimized servers is helping to drive spending. Next year, investment in them is expected to triple spending on conventional servers, which are still seeing growth.
[8]Trump administration announces tariffs that may make plenty of tech more expensive from August 1
[9]Tariffs and trade turmoil driving up cost and build times for datacenters
[10]Gone in 40 days: US drops ban on export of chip design tools to China
[11]Trump tariff turmoil hurting global smartphone market, but hitting US hardest
"This is from a market that didn't exist in 2022," Lovelock explained. "It's taken us 20 years to get to this level of traditional server spending, and that includes when we started going through globalization, when we went through that managed services phase, all of the servers that have been bought drive all the cloud around the world. All the services that run all the business, we see no change, no deflection in any amount of spending on that, but we will spend triple that number on GenAI servers."
Cloud vendors and the largest AI companies are behind this demand as they try to ensure they are among the last standing in the market, which is expected to [12]go through an extinction phase , after which there will be two or three mainstream players, alongside a handful of niche vendors with much lower market share.
However, there is no investment bubble in AI, Lovelock claimed. "We are in a normal emerging market situation where there are many new players in the market. Some of them are not going to make it, some are going to transform into something new, and some are going to get bought. But no, there is no GenAI bubble." ®
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[1] https://www.theregister.com/2025/01/22/business_value_genai_elusive/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/04/14/trump_trade_war_jefferies/
[7] https://www.theregister.com/2025/07/08/trump_administration_reciprocal_tariffs/
[8] https://www.theregister.com/2025/07/08/trump_administration_reciprocal_tariffs/
[9] https://www.theregister.com/2025/07/03/tariffs_and_trade_turmoil_driving/
[10] https://www.theregister.com/2025/07/03/us_eda_export_ban_lifted/
[11] https://www.theregister.com/2025/06/04/trump_tariff_turmoil_affecting_global/
[12] https://www.theregister.com/2025/03/31/llm_providers_extinction/
[13] https://whitepapers.theregister.com/
In January, the tech analyst [1]estimated growth in global IT spending this calendar year would hit $5.61 trillion, up 9.8 percent versus the prior twelve months. Now it expects expenditure to rise 7.9 percent.
The adjusted figure is related to changes in exchange rates and CIOs pausing net-new spending, which began to show itself from April when Trump ratcheted up his threats of imposing higher taxes on US imports.
[2]
John-David Lovelock, distinguished vice president and analyst at Gartner, said the US was in the middle of "a reboot of its global trade policy" in reference to the tariffs proposed by Trump, many of which are still in negotiation, notably with the EU.
[3]
[4]
"The rest of the world is taking a pause," Lovelock said. "It's not fair to say that the geopolitical situation is causing it. It's not even really fair to say that it's a macroeconomic condition, although you will hear that often. It's not about GDP or interest rates or inflation or unemployment. It's about 'we're not sure where this reboot is going to land, and we're going to pause until we do figure it out'."
As a result, many organizations have halted expansion, delaying product purchases and hiring. "They're pausing new IT spending," Lovelock said. "Budgets aren't affected yet, they're still fully enforced. They're just pausing new spending."
[5]
Investment bank Jefferies noted some months back that [6]CIOs had frozen projects as they take stock of how tariffs may impact them. An incoming wave of tariffs scheduled for [7]August 1 are expected to result in tech prices becoming more expensive.
IT hardware and infrastructure are likely to be most affected by changes to US trade policy, Gartner says, and they may see price increases and supply chain disruptions as a result. Recurring spending, for example on cloud and managed services, is likely to be more stable. However, the growth in AI-optimized servers is helping to drive spending. Next year, investment in them is expected to triple spending on conventional servers, which are still seeing growth.
[8]Trump administration announces tariffs that may make plenty of tech more expensive from August 1
[9]Tariffs and trade turmoil driving up cost and build times for datacenters
[10]Gone in 40 days: US drops ban on export of chip design tools to China
[11]Trump tariff turmoil hurting global smartphone market, but hitting US hardest
"This is from a market that didn't exist in 2022," Lovelock explained. "It's taken us 20 years to get to this level of traditional server spending, and that includes when we started going through globalization, when we went through that managed services phase, all of the servers that have been bought drive all the cloud around the world. All the services that run all the business, we see no change, no deflection in any amount of spending on that, but we will spend triple that number on GenAI servers."
Cloud vendors and the largest AI companies are behind this demand as they try to ensure they are among the last standing in the market, which is expected to [12]go through an extinction phase , after which there will be two or three mainstream players, alongside a handful of niche vendors with much lower market share.
However, there is no investment bubble in AI, Lovelock claimed. "We are in a normal emerging market situation where there are many new players in the market. Some of them are not going to make it, some are going to transform into something new, and some are going to get bought. But no, there is no GenAI bubble." ®
Get our [13]Tech Resources
[1] https://www.theregister.com/2025/01/22/business_value_genai_elusive/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aHZ7FYsJymEIiDBgnz4AhQAAAhE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/04/14/trump_trade_war_jefferies/
[7] https://www.theregister.com/2025/07/08/trump_administration_reciprocal_tariffs/
[8] https://www.theregister.com/2025/07/08/trump_administration_reciprocal_tariffs/
[9] https://www.theregister.com/2025/07/03/tariffs_and_trade_turmoil_driving/
[10] https://www.theregister.com/2025/07/03/us_eda_export_ban_lifted/
[11] https://www.theregister.com/2025/06/04/trump_tariff_turmoil_affecting_global/
[12] https://www.theregister.com/2025/03/31/llm_providers_extinction/
[13] https://whitepapers.theregister.com/
Groo The Wanderer - A Canuck
Trump will do what he always does: chicken out when playing the bully with former trade partners just leads them to seek out more reliable partners.
Carney has been spending a large amount of his time dealing with Europe and has signed several agreements with them.
The US used to be a reliable trade partner for Canada; now we've got the Pumpkin Fuhrer claiming that the free trade deal he negotiated and signed is "bad for America" and that Canada is a "threat."
You damned straight we're a threat: we're busy proving to the world that nobody "needs" to give in to bullies.
Filippo
It's hard to say what Trump will actually get out of Europe. He might even actually get something, and if he does he's sure to parade it around like an emperor's triumph.
However, there's a cost to erosion of trust. It's not even that much of a hidden cost. Whatever he gets now, the USA will lose ten times over later, as trading partners start hedging their bets, find different sources, look elsewhere.
His policy is: get something now, and leave the hot mess for someone else to deal with. You see it in CEOs that gut the company to get a profit boost, leave it while the options are good, and then the company folds. Problem is, when it's nations that do it, the results are much uglier.
There is no GenAI bubble
Well, if Gartner says so we know what to conclude.