Gartner: Data Centers Take Half of 2027’s $961B IT Rise

Gartner forecasts worldwide IT spending of $7.35 trillion in 2027, up 15% from 2026, according to a press release it published on 21 October 2026. Spending on data center systems is forecast to rise 55.5% to $1,366 billion, and by our arithmetic on Gartner’s table that $487 billion increase is about half of the $961 billion that all IT spending adds in 2027.

In plain words, “data center systems” is the hardware that fills data centers: servers, storage and networking gear. “Infrastructure as a service”, or IaaS, is computing power rented from cloud providers rather than owned.

Business Pill · CAPEX AND DEPRECIATION

A short Business Engineer explainer on capital spending and depreciation. It teaches the general idea only and says nothing about Gartner’s forecast.

What Gartner Forecasts

• The total. Worldwide IT spending is expected to reach $7.35 trillion in 2027, up 15% from 2026, crossing $7 trillion for the first time, Gartner said. Its table puts 2026 at $6,391 billion, up 14.5%.
• Data centers lead. Data center systems are forecast at $879 billion in 2026, up 73.8%, and $1,366 billion in 2027, up 55.5%, the fastest growth of any segment in both years.
• Rented compute next. IaaS is forecast to grow 25.7% to $367 billion in 2027, after 31.3% growth in 2026.
• Other segments. Software is forecast to grow 14.6%, devices 8.1%, services 4.9% and communications services 2.9% in 2027, according to the table.

Source: Gartner, “Gartner Forecasts Worldwide IT Spending to Grow 15% in 2027, Totaling $7.35 Trillion”, 21 October 2026, Table 1 (billions of US dollars). Spending and growth rates are Gartner’s. The last two columns are our arithmetic: 2027 spending minus 2026 spending, divided by the $961 billion overall rise. Rows are sorted by the amount added.

By our arithmetic, data center systems were about 13.8% of all IT spending in 2026 and rise to about 18.6% in 2027.

Memflation

Over the past 12 months, Gartner said, demand from data center systems has driven memory prices to more than double, with cost increases cascading through storage, server, networking, PC and device supply chains.

“This ‘memflation’ effect is expected to persist through 2027 before hardware pricing begins to stabilize,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “While higher average selling prices continue to support spending growth, the resulting pressure on affordability is expected to suppress end-user demand throughout the forecast horizon.”

By Gartner’s account, part of the spending growth comes from higher prices, not only more units. The release does not split the data center figure between price and volume.

Infrastructure as an Asset Class

“Backed by hyperscaler capital expenditure, private capital funding, financing initiatives and in some cases the technology suppliers themselves, AI infrastructure is emerging as both a technology platform and an investable asset class,” Lovelock said. Gartner also wrote that its forecast “reflects a further upward revision in growth expectations for data center systems”.

Connecting the Coverage

Our memory piece reported that Micron and Sandisk report about $225 billion of memory sales already under contract, by our arithmetic from their filings and calls as of 19 October 2026. What’s new: Gartner now says memory prices have more than doubled in 12 months.

Our SK Hyper piece reported that the first 5-gigawatt phase of SK Hyper’s Korean data center plan would require $350 billion including equipment, about $70 billion per gigawatt by our arithmetic, according to Bloomberg. Our CoreWeave piece reported that Goldman Sachs and Bernstein put CoreWeave’s remaining funding need at roughly $19.5 billion to $23 billion and about $76 billion respectively. What’s new: Gartner forecasts data center systems spending for the whole market.

Our selloff piece reported that the AI stock selloff of 22 October 2026 moved bonds, credit spreads and gold, according to Reuters and Bloomberg. Gartner’s forecast was published on 21 October, the day before.

The Structural Read

As we read it, the growth is concentrated in hardware: data center systems are forecast to rise 55.5% in 2027, faster than any other segment in Gartner’s table, and software, the next biggest contributor, adds $215 billion by our arithmetic.

As we read it, part of that is price: Gartner says memory prices have more than doubled in 12 months and that higher average selling prices continue to support spending growth, but the release does not split the data center figure between price and volume.

As we read it, Gartner frames the spending as financed as much as bought: Lovelock names hyperscaler capital expenditure, private capital funding, financing initiatives and in some cases the technology suppliers themselves as the backers.

Three Implications

FOR HARDWARE BUYERS Gartner says the ‘memflation’ effect is expected to persist through 2027 before hardware pricing begins to stabilize.

FOR INVESTORS IN AI INFRASTRUCTURE Gartner says AI infrastructure is emerging as an investable asset class, backed by hyperscaler capital expenditure, private capital and financing initiatives.

FOR SOFTWARE VENDORS Software is forecast to add $215 billion in 2027 by our arithmetic, the second-largest contribution after data center systems, on 14.6% growth.

The Business Engineer Lens

This story maps onto the Business Engineer framework The AI Capex Map.

The framework describes the Big Four’s 2026 spending as “the largest single-year concentrated infrastructure cycle in the history of technology.”

As we read it, Gartner’s data center systems line is the market-wide total of that cycle’s hardware, and its forecast has it growing again in 2027. The framework was published in May 2026 and does not discuss Gartner’s forecast.

What Is Not Established

This is a forecast, not a measurement. The release does not say how much of the data center figure is AI hardware rather than general servers, how much of the growth is price rather than volume, or which vendors it counts. The share-of-growth figures are our arithmetic on Gartner’s rounded table. We did not contact Gartner. Nothing here is investment advice.

The Bottom Line

Gartner forecasts $7.35 trillion of IT spending in 2027, and by our arithmetic data center systems account for about half of the $961 billion increase, while memory prices have more than doubled in a year, according to Gartner.