IT spending in Australia is expected to reach A$172.3 billion by 2026, which is an increase of 8.9% from 2025, according to Gartner, a business and technology insights company.
Andy Rowsell-Jones, a senior analyst at Gartner, said, “Even though the economy is uncertain, spending on AI (artificial intelligence), cybersecurity, and cloud technology will keep growing in Australia next year.”
He noted that Australian companies are not just focusing on generative AI (GenAI) but are also looking at other AI technologies that can help with real-time data and make operations more efficient for long-term success.
This week, Gartner analysts are sharing the latest trends in IT spending at the Gartner IT Symposium/Xpo on the Gold Coast, which will continue until Wednesday.
The investment in AI-related infrastructure is expected to rise significantly in 2026. Gartner predicts that spending on data center systems will see the biggest growth, increasing by 22.5% to A$10.1 billion. Within this area, spending on servers will grow by 30%, reaching A$7.7 billion in 2026. This growth is due to the demand for AI-optimised servers to support the use of GenAI.
John-David Lovelock, another senior analyst at Gartner, pointed out, “The fast growth of large data centers for GenAI is creating a huge demand for electricity, which utility companies are struggling to keep up with.”
He added that it is good to see strong spending on data centers as businesses and service providers work together to support the rapid growth of GenAI. Software Will Get the Most Spending Software will become the largest area of IT spending in Australia by 2026, surpassing IT services. Gartner forecasts that software spending in Australia will reach nearly A$60 billion in 2026, an increase of 13.6% from 2025.
Rowsell-Jones explained, “Australian companies are quickly moving to AI-enabled software and cybersecurity tools to improve their work processes, manage compliance, and protect against threats. These tools are often provided as software services.”
He added that GenAI is changing the software industry by enabling more intelligent, efficient, and personalized applications.
Technology companies are quickly adding GenAI features to their products to take advantage of new business opportunities. Gartner predicts that by 2028, 75% of software spending will be on products that include GenAI features, as new use cases create improved efficiencies and capabilities.
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