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CIOs Must Prepare for Rising GenAI Spending in 2025, Fueled by Better Foundational Models and Growing Demand for AI Products
Dubai, United Arab Emirates, April 2, 2025 — Worldwide generative AI (GenAI) spending is expected to total $644 billion in 2025, an increase of 76.4% from 2024, according to a forecast by Gartner, Inc.
“Expectations for GenAI's capabilities are declining due to high failure rates in initial proof-of-concept (POC) work and dissatisfaction with current GenAI results,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Despite this, foundational model providers are investing billions annually to enhance GenAI models' size, performance, and reliability. This paradox will persist through 2025 and 2026.
“Ambitious internal projects from 2024 will face scrutiny in 2025, as CIOs opt for commercial off-the-shelf solutions for more predictable implementation and business value. Despite model improvements, CIOs will reduce POC and self-development efforts, focusing instead on GenAI features from existing software providers.” said Lovelock.
GenAI spending is poised for significant growth across all core markets and submarkets in 2025 (see Table 1). GenAI will have a transformative impact across all aspects of IT spending markets, suggesting a future where AI technologies become increasingly integral to business operations and consumer products.
Table 1. Worldwide GenAI Spending Forecast (Millions of U.S. Dollars)
|
2024 Spending |
2024 Growth (%) |
2025 Spending |
2025 Growth (%) |
Services | 10,569 | 177.0 | 27,760 | 162.6 |
Software | 19,164 | 255.1 | 37,157 | 93.9 |
Devices | 199,595 | 845.5 | 398,323 | 99.5 |
Servers | 135,636 | 154.7 | 180,620 | 33.1 |
Overall GenAI | 364,964 | 336.7 | 643,860 | 76.4 |
Source: Gartner (March 2025)
AI Capable Consumer Devices to Drive GenAI Spending
GenAI spending in 2025 will be driven largely by the integration of AI capabilities into hardware, such as servers, smartphones and PCs, with 80% of GenAI spending going towards hardware.
“The market’s growth trajectory is heavily influenced by the increasing prevalence of AI-enabled devices, which are expected to comprise almost the entire consumer device market by 2028,” said Lovelock. “However, consumers are not chasing these features. As the manufacturers embed AI as a standard feature in consumer devices, consumers will be forced to purchase them.”
Gartner’s GenAI spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of GenAI products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
The Gartner GenAI spending forecast delivers a unique perspective on GenAI spending across the hardware, software and IT services segments. These reports help Gartner clients understand market opportunities and challenges. The most recent GenAI spending forecast research is available to Gartner clients in “Forecast Alert: GenAI IT Spending, 2023-2028, Worldwide.”
Gartner CIO & IT Executive Conference
Gartner analysts will provide additional analysis on insights and trends shaping the future of IT and business, including accelerating business transformation, application modernization, infrastructure and operations at the Gartner CIO & IT Executive Conference, taking place September 22-24 in São Paulo and October 6-8 in Dubai. Follow news and updates from the conference on X using #GartnerCIO.
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Valmet will supply the Valmet DNAe Distributed Control System to ESE-Energia’s combined heat and power (CHP) plant in Mikkeli, Finland. The new system will replace an obsolete third-party system on the site. As the main automation system, Valmet DNAe will control the power plant’s three boiler units (Pursiala 1 and 2 and the heating unit) as well as the district heating accumulator, electric boiler, and fuel reception. The system ensures high availability and delivers advanced process controls, enhancing performance and reliability.
The order is included in Valmet’s orders received of the first quarter 2025. The value of the order will not be disclosed. The delivery will be commissioned in spring 2026 and taken over by the customer in autumn 2026.
”Based on my experiences in previous roles at power plants and industry, I have found that Valmet’s automation system is one of the best in terms of functionality. About two years ago, we began investigating the features and user experiences of various automation systems for a power plant of a similar scale to the Pursiala plant. After a thorough evaluation, we concluded that the automation system offered by Valmet is the most advanced and reliable solution for our Pursiala power plant,” says Mikko Turunen, Operations Manager at ESE-Energia Oy.
”We are proud to be modernizing the main automation system at the Pursiala power plant with Valmet DNAe Distributed Control System. Valmet’s strong references in power plant automation, extensive product and solution portfolio, and local service center convinced the customer to choose us. With Valmet DNAe and the comprehensive delivery scope, the customer will benefit from enhanced operational efficiency, reliability, and performance optimization for the plant,” says Pasi Voutilainen, Sales Director, Automation Systems business line, Valmet.
Valmet is to upgrade automation at ESE-Energia Oy’s Pursiala power plant in Finland. Photo: Kimmo Iso-Tuisku
Delivery’s technical information
The delivery includes the Valmet DNAe Distributed Control System for controlling and monitoring two main boilers (CFB and BFB), a hot-water boiler, an electric boiler, a district heating accumulator, and fuel reception. To ensure optimal power generation and emissions control, the delivery includes Valmet DNA Steam Turbine Automation and Valmet DNA Advanced Process Controls (APC) solutions. The entire plant's energy production is managed via the Valmet DNA Energy Management System. All safety-related systems are based on HIMA technology and integrated into the Valmet DNAe.
The power plant is controlled via the web-based Valmet DNAe User Interface, where UX design methods are used to develop the new control environment.
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DUBAI, UAE, March 31, 2025 /PRNewswire/ -- EDGNEX Data Centers by DAMAC, the digital infrastructure platform of the Dubai-headquartered DAMAC Group, has confirmed the acquisition of Finland-founded data center company, Hyperco. Aligned with its vision to deliver next-generation, sustainable digital infrastructure globally, the move underscores the Group's commitment to strengthening its presence in the European market and contributing to the region's evolving data center landscape, creating new jobs and promoting economic development.
Hyperco's operations are focused on Finland and Sweden, leveraging the Nordic region's sustainable energy resources, mature digital ecosystems, and high connectivity. All three Hyperco founders, together with the team, will continue to steer the company forward during the next growth phase.
Hussain Sajwani, Founder of DAMAC Group said: "This acquisition aligns with our vision to develop strong partnerships, invest, and build scalable, world-class digital infrastructure. Hyperco brings a great team, deep market expertise, and a shared commitment to innovation, which will drive our success in the region. We plan to build a significant future capacity in the Nordics and establish a strong foothold in the market."
Aleksi Taipale, Co-founder and CEO of Hyperco adds: "This marks an exciting new chapter for Hyperco. Joining forces with EDGNEX and DAMAC Group empowers us to accelerate our mission of delivering large-scale, sustainable data center infrastructure tailored for hyperscalers and AI-driven workloads. With our established footprint in Finland and Sweden, access to low-carbon energy, and focus on scalability, we are well-positioned to meet the growing digital demands of the region and beyond."
Since its launch in 2021, EDGNEX has grown its presence globally. Backed by over 100+ seasoned professionals, the company is on track to deliver 55 MW in the Middle East by 2025, with a projected global capacity exceeding 3,000 MW. EDGNEX is targeting 300+ MW of operational capacity by 2026, supported by a robust investment pipeline of over $3 billion, including key Southeast Asian markets.
EDGNEX's recent European activities include a €150 million joint venture in Greece with Public Power Corporation (PPC) to develop up to 25 MW and a €400 million commitment to build a 40 MW data center in Madrid, Spain. Earlier this year, EDGNEX also announced $20 billion of foreign investment in building state-of-the-art data centres in the USA.
"إيجنكس من داماك" توقع شراكة إستراتيجية مع شركة "هايبركو" الفنلندية المتخصصة في تطوير مراكز البيانات في دول الشمال الأوروبي
دبي، الإمارات العربية المتحدة, 31 مارس / آذار 2025 /PRNewswire/ -- – أكدت شركة "مراكز بيانات إيجنكس من داماك"، الرائدة في تطوير البنية التحتية الرقمية والتابعة لمجموعة داماك، استحواذها الكامل على شركة "هايبركو" (Hyperco) الفنلندية المتخصصة في مراكز البيانات. ويُجسّد هذا الاستحواذ رؤية المجموعة في تقديم بنية تحتية رقمية مستدامة ومتطورة على مستوى العالم، كما يعزز من حضورها في السوق الأوروبية ويسهم في تطوير قطاع مراكز البيانات في المنطقة، مع توفير فرص عمل جديدة وتعزيز التنمية الاقتصادية.
تتمركز عمليات "هايبركو" في فنلندا والسويد، وتستفيد من وفرة مصادر الطاقة المستدامة، والأنظمة الرقمية المتقدمة، ومستويات الاتصال العالية في دول الشمال الأوروبي. وبموجب الاستحواذ، سيواصل المؤسسون الثلاثة للشركة عملهم مع الفريق لقيادة المرحلة التالية من النمو.
بهذه المناسبة، قال حسين سجواني، مؤسس مجموعة داماك: "يتماشى هذا الاستحواذ مع رؤيتنا في بناء شراكات قوية والاستثمار في تطوير بنية تحتية رقمية عالمية قابلة للتوسع. تمتلك هايبركو فريقاً متميزاً وخبرة عميقة في السوق، بالإضافة إلى التزامها بالابتكار، مما سيُعزز نجاحنا في تلك المنطقة. نخطط لتطوير قدرة تشغيلية كبيرة في المستقبل في دول الشمال، وتعزيز وجودنا القوي في سوق مراكز البيانات هناك".
من جانبه قال أليكسى تايبالي، الشريك المؤسس والرئيس التنفيذي لشركة "هايبركو": "تمثل هذه الخطوة مرحلةً جديدة في مسيرتنا. إن التعاون الإستراتيجي مع إيجنكس ومجموعة داماك يُسرع من عملية تنفيذ خططنا المستقبلية والمتمثلة في تقديم بنية تحتية مستدامة على نطاقٍ واسع مخصصة لكبرى شركات الحوسبة وتطبيقات الذكاء الإصطناعي. ومع وجودنا الراسخ في فنلندا والسويد، وقدرتنا على الوصول إلى طاقة منخفضة الانبعاثات، وتركيزنا على التوسع، فإننا في موقعٍ مثالي لتلبية الطلب الرقمي المتنامي في المنطقة وخارجها."
منذ إطلاقها في عام 2021، توسّعت إيجنكس على نحوٍ كبير في عدد من أبرز الأسواق العالمية في مراكز البيانات. وتضم الشركة أكثر من 100 شخص ممن يتمتعون بخبراتٍ كبيرة وكفاءاتٍ عالية، وهي بصدد الوصول إلى قدرة تشغيلية تصل إلى 55 ميجاواط في الشرق الأوسط بحلول عام 2025، مع قدرة عالمية متوقعة تتجاوز 3000 ميجاواط. وتهدف الشركة أيضاً إلى تحقيق قدرة تشغيلية تتجاوز 300 ميغاواط بحلول عام 2026، مدعومة بمحفظة استثمارية تتخطى 3 مليارات دولار أمريكي، تشمل أسواقاً رئيسية في جنوب شرق آسيا.
ويأتي هذا الاستحواذ بعد سلسلة من الخطوات الإستراتيجية للشركة في أوروبا، بما في ذلك مشروع مشترك بقيمة 150 مليون يورو في اليونان مع شركة الكهرباء العامة (PPC) لتطوير مركز بيانات بقدرة تصل إلى 25 ميجاواط، فضلاً عن استثمار بقيمة 400 مليون يورو لبناء مركز بيانات بقدرة 40 ميجاواط في العاصمة الإسبانية مدريد.
وفي وقت سابق من هذا العام، أعلنت إيجنكس عن استثمار بقيمة 20 مليار دولار أمريكي لبناء مراكز بيانات متطورة في الولايات المتحدة.
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