Gartner’s latest forecast shows that IT spending in Europe will rise from $1.29 trillion in 2025 to $1.43 trillion in 2026, representing an 11.1 percent growth.
Data Center Systems spending will grow from $83.6 billion in 2025 to $99.3 billion in 2026, up 18.8 percent.
Devices spending will increase from $143.7 billion in 2025 to $158.2 billion in 2026, a growth of 10.1 percent.
Software spending will rise from $290.2 billion in 2025 to $335.4 billion in 2026, up 15.6 percent.
IT Services spending will climb from $490.4 billion in 2025 to $539.9 billion in 2026, growing 10.1 percent.
Communications Services spending will grow from $277.8 billion in 2025 to $295.0 billion in 2026, up 6.2 percent.
John-David Lovelock, Distinguished VP Analyst at Gartner, said AI, cloud, and cybersecurity will be the main drivers of this growth. “Despite IT budget constraints and minimal headcount growth, CIOs in Europe will be spending heavily on software to access new AI features from their current providers,” Lovelock said.
Gartner expects end-user spending on generative AI models in Europe to grow by 78.2 percent in 2026.
Cloud investment in Europe is also set to expand, though Gartner noted it will become more complex as CIOs pursue digital sovereignty and bring cloud services closer to home. End-user public cloud services spending in Europe is projected to grow by 24 percent in 2026.
Software will remain a key spending area for European organizations, as businesses aim to build more intelligent, efficient, and personalized applications. Rising software prices across categories are expected to further boost overall software spending.
The devices market will also see a lift as manufacturers integrate AI features into their products and adjust prices to cover the higher cost of new hardware.
AI Infrastructure Development to Accelerate
Investment in AI infrastructure will continue to expand across Europe in 2026, with strong demand for AI-optimized servers. End-user spending on AI servers in Europe is forecast to reach $46.8 billion in 2026, up from $39.3 billion in 2025. However, this remains well behind North America’s projected $170 billion and China’s $67 billion spending.
“Europe is facing regulatory pressure, competition between countries, geopolitical tensions, and national security concerns—all focused on ensuring the region can develop and manage AI systems independently,” Lovelock said.
While global software vendors are adding generative AI capabilities to promote adoption, new AI platforms tailored for Europe are emerging as key elements of national digital infrastructure.
Gartner predicts that by 2027, 35 percent of countries will rely on region-specific AI platforms using proprietary contextual data — up from just 5 percent today. Governments are expected to push major cloud providers to collaborate with local partners to make platforms more regional, aligning with data sovereignty, regulatory compliance, and national security objectives.
Rajani Baburajan
