Server spending alone will rocket up 36.9% year-over-year, Gartner found, driven almost entirely by AI-optimized hardware. The hyperscalers, including AWS, Microsoft Azure, Google Cloud, and others, are in an arms race to build out the infrastructure needed to train and run increasingly large AI models.
It’s not just about more servers, either. These are specialized machines packed with high-end GPUs and custom silicon designed specifically for AI workloads, which explains the eye-watering price tags.
Software growth cools slightly, but GenAI stays hot
The software market is expected to continue growing nicely in 2026, although Gartner has slightly trimmed its forecast. Software spending growth is now projected at 14.7%, down from an earlier estimate of 15.2%, encompassing both application and infrastructure software.
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