Europe’s IT spend to surge 11% as cloud sovereignty fever takes hold

Steven

Europe’s IT spend to surge 11% as cloud sovereignty fever takes hold

Summary

Gartner forecasts European IT spending will rise 11% next year to about $1.4 trillion, driven by heavy investment in generative AI, cybersecurity and a push for cloud sovereignty. The market is projected to hit $1.3 trillion by the end of 2025 after an 11.6% increase year-on-year, while GenAI model spend is expected to jump 78%.

Key Points

  • Gartner predicts 11% growth in European IT spending next year, bringing the market to roughly $1.4 trillion.
  • Spending on GenAI models in Europe is forecast to grow 78% as organisations prioritise AI investment.
  • Interest in sovereign/local cloud providers is surging: 61% of Western European CIOs want to increase use of local clouds; 53% expect geopolitics to limit global providers.
  • Datacentre spending is accelerating — 38.2% growth in 2025 to $83.6bn, then expected to reach $99.3bn with slower growth (18.8%) the following year.
  • Software costs are rising as AI features are bundled into products; PC and device spending remains broadly flat.
  • Major AI infrastructure investments remain concentrated in North America, despite European spending increases on datacentres and services.

Content summary

Gartner’s latest forecast highlights a notable uptick in European IT expenditure, with GenAI and cybersecurity cited as the primary growth engines. Geopolitical uncertainty — including concerns about data access and national security — is fuelling a move towards “geo-repatriation” and greater adoption of local cloud providers. While enterprises are expanding server and datacentre spending, the largest capital-intensive AI infrastructure projects remain predominantly US-based. Analysts note that software is becoming pricier because vendors now bundle AI capabilities into their offerings.

Context and relevance

This story matters for CIOs, procurement teams and vendors operating in Europe: budget planning, supplier selection and architecture strategies will be affected by the twin forces of AI demand and digital sovereignty. The trend feeds into broader policy debates about data localisation, vendor risk and the balance between cost, control and compliance. For vendors, the message is clear — Europe wants local options and AI-enabled products, and is prepared to spend to get them.

Why should I read this?

Short version: big money is moving and it’s not just for shiny AI toys. If you buy cloud, build datacentres, sell software or set tech budgets in Europe, this shifts the landscape — faster AI spend, higher software bills and a real push for local/cloud-sovereign options. Read it to know where to place bets and who might lose out.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2025/11/14/it_spending_europe/