Gartner just updated its 2026 IT spending forecast, and the headline numbers are even bigger than what we covered back in the fall. Total worldwide IT spending is now projected to hit $6.15 trillion in 2026, up 10.8% year-over-year. That’s revised up from the $6.08 trillion and 9.8% growth Gartner was projecting just a few months ago.
The AI spending boom isn’t cooling off. It’s accelerating.
But the number I want you to pay attention to is the software line. Software spending will grow 14.7% in 2026 to more than $1.4 trillion. Yes, that’s slightly revised down from the 15.2% Gartner projected in October. But it’s still accelerating from 11.5% growth in 2025. And it’s still the second-fastest growing category in all of IT.
Software is being outpaced only by data center systems, which are growing a staggering 31.7% as hyperscalers keep pouring capital into AI infrastructure.
So the real question for every B2B founder reading this: are you actually capturing any of this growth?
Software Spend Is Accelerating. Even As AI Expectations Reset.
This is the part that matters most for B2B founders.
Gartner is telling us that even though we’re now firmly in what they call the “trough of disillusionment” for GenAI, software spending growth is actually accelerating from 2025 to 2026. It went from 11.5% to 14.7%.
How does that work? Because GenAI features are now baked into the software enterprises already own. They don’t need to believe in the hype anymore. They’re already paying for it. Every renewal comes with AI features. Every new module costs more. The pricing paradigm has shifted, and there’s no going back.
GenAI model spending alone is expected to grow 80.8% in 2026. And GenAI’s share of the total software market is climbing another 1.8 percentage points this year. We are rapidly approaching the point — if we haven’t already crossed it — where more software spending goes to AI-enhanced products than products without AI.
The Overall IT Number Went Up, Not Down
Worth noting: Gartner revised the total IT spending number upward. From $6.08 trillion to $6.15 trillion. From 9.8% growth to 10.8%.
That almost never happens between the October and February updates. Usually forecasts drift downward as reality sets in. Not this time.
The reason? AI infrastructure spend is accelerating even faster than expected. Server spending is now projected to grow 36.9% year-over-year. Total data center spending will surpass $650 billion, up from roughly $500 billion the prior year. That’s $150+ billion in incremental data center spend in a single year.
Hyperscale cloud providers are the primary driver. They’re building AI infrastructure at a pace that keeps surprising even the analysts tracking it quarter by quarter.
The Software Revision Downward Is Actually Good News
Gartner trimmed the software growth forecast from 15.2% to 14.7%. That sounds like bad news. It’s not.
Here’s why: the October forecast was built during the Q4 2025 budget flush, when enterprises were racing to deploy capital before year-end. Some of that demand got pulled forward into late 2025. The revised 14.7% reflects a more sustainable growth trajectory, not a softening market.
And $1.4 trillion in software spend growing at 14.7% still means roughly $180 billion in net new software spending in 2026 alone. That’s nearly the entire software market from 15 years ago showing up as incremental spend in a single year.
If your B2B company isn’t growing at least 14.7% this year, you’re losing share to someone who is.
Where the Money Is Actually Going
Let’s break down the IT spending categories so you can see where the dollars flow:
- Data Center Systems: $650B+ (up 31.7%) — This is the AI infrastructure build-out. Servers, networking, storage. Hyperscalers are driving most of it, but enterprise on-prem AI infrastructure is growing too.
- Software: $1.4T+ (up 14.7%) — The biggest single category in IT spending and still accelerating. Application software plus infrastructure software. This is where B2B companies live.
- IT Services: growing steadily — Consulting, implementation, managed services. Growth is solid but slower than software and data center.
- Devices: $836B (up 6.1%) — Phones, PCs, tablets. Growth is decelerating from 2025 due to rising memory prices and pulled-forward demand.
- Telecom: modest growth — The slowest-growing category, as usual.
The story here is straightforward: infrastructure and software are eating everything. If you sell B2B software, the total addressable market just got bigger. Again.
The Uncertainty Pause Is Over. But the Reallocation Continues.
Remember the “uncertainty pause” from Q2-Q3 2025? Enterprises froze net-new spending as tariff concerns and geopolitical risks spiked. That pause started to lift in Q3 and the Q4 budget flush was massive.
Now in 2026, the freeze is fully thawed. Budgets are flowing again.
But here’s the thing we covered in the last Gartner piece that’s still true: this isn’t all new money. A significant portion of the growth is still reallocation. Companies are cutting low-ROI software to fund AI-enhanced software. They’re consolidating point solutions. They’re reducing external contractors.
The 9% “price increase tax” we identified in October hasn’t gone away. CIOs are still allocating roughly 9% of their IT budget just to cover price increases on existing software. So the real net-new discretionary spending is a fraction of that 14.7% headline number.
That means the competitive dynamics are brutal. If you’re not the software getting funded, you might be the software getting cut.
Five Practical Takeaways for B2B Founders
- If you’re growing below 14.7%, you’re ceding ground. The overall market is growing at 14.7%. If your growth rate is below that, you’re losing market share by definition. In a market this hot, underperformance is a strategic problem, not just a financial one.
- AI features are no longer optional — they’re the price of admission. GenAI’s share of the software market is rising 1.8 points this year alone. Buyers expect AI capabilities. If your product doesn’t have them, you’re in the “low ROI software getting cut” bucket we talked about last fall. That risk is only getting more real.
- The infrastructure spending creates downstream opportunity. $650 billion+ in data center spending means massive new compute capacity coming online. That capacity needs software to manage it, optimize it, and secure it. If you’re in the infrastructure software layer, this is your moment.
- The “buy” cycle for AI is fully underway. Enterprises tried to build their own AI in 2024. Most of those projects failed or stalled. Now they’re buying from vendors. Gartner projects 80.8% growth in GenAI model spending alone. If you have AI capabilities that work, enterprise buyers are ready to pay.
- Pricing power is real, but it has limits. Software vendors have been raising prices and getting away with it because AI features provide cover. But Gartner’s slight downward revision on software growth hints that we’re approaching the ceiling. Price strategically. Don’t get greedy. The 9% inflation tax is already straining budgets.
$1.4 Trillion in Software Spend, Growing 14.7%. Don’t Call It a Downturn.
$1.4 trillion in software spending. Growing 14.7%. In a $6.15 trillion IT market growing 10.8%.
These are the biggest numbers we’ve ever seen in enterprise technology. And the acceleration from 11.5% software growth in 2025 to 14.7% in 2026 tells you the AI spending wave has real staying power.
But the money isn’t distributed evenly. It’s flowing to AI-enhanced software, infrastructure, and platforms that can demonstrate real ROI. Everyone else is getting their budgets reallocated.
The $180 billion in net new software spend this year is there for the taking. The question is whether your product, your pricing, and your go-to-market are positioned to grab it.
Are you?
