IT spending in Australia is expected to cross $A172 billion in 2026, as investments in the AI sector continue to ramp up worldwide, an increase of 8.9% from 2025.
A Garner report has forecasted that the growth will come from new technologies as the sector undergoes a transformation to allow for new services and products. Particularly, the business and insights company has said that a majority of the growth will come from investments in data center systems, expected to represent a growth of 22.5% to A$10.1 billion.
“Despite an uncertain environment, investments in AI, cybersecurity and cloud will continue to drive new IT spending in Australia next year,” said Gartner VP analyst Andy Rowsell Jones.
“With AI firmly in the spotlight, Australian organizations are widening their focus from generative AI (GenAI) towards investments in other related AI technologies for real-time intelligence and operational scalability, helping ensure long-term success,” he also said.
“The rapid expansion of hyperscale data centers for GenAI is driving huge demand for power, which utility providers struggle to keep up with,” said Gartner VP Analyst John-David Lovelock.
Software to be the largest category for IT spending
While the report says data centre systems will give the largest growth, the largest category in terms of spending is projected to be software, overtaking IT services in 2026.