Analyst firm Gartner forecasts that global spending on generative AI will reach $644 billion in 2025, representing a 76.4% increase from 2024. According to the report detailed by Sean Michael Kerner in VentureBeat, hardware will account for approximately 80% of this spending, with devices alone claiming $398.3 billion.
John Lovelock, distinguished VP analyst at Gartner, explained that device manufacturers are driving much of this growth by incorporating AI capabilities into their products. “By 2027, it will be almost impossible to buy a PC that is not AI enabled,” Lovelock told VentureBeat.
The spending breakdown shows servers will reach $180.6 billion (33.1% growth), while software and services will account for $37.2 billion and $27.8 billion respectively. Contrary to expectations, the ratio of hardware spending is projected to increase over time as AI features become embedded in standard software.
Gartner’s analysis revealed that many internal generative AI proof-of-concept projects are failing due to three key factors: insufficient data quality or quantity, user resistance to new technology, and inadequate return on investment.
The report indicates a strategic shift away from custom AI development toward commercial off-the-shelf solutions. This trend reflects growing recognition that integrating existing AI capabilities into workflows often yields better results than building custom applications from scratch.
For enterprise leaders, the forecast suggests focusing on vendor solutions that incorporate AI into existing systems rather than pursuing ambitious internal development projects.