Year-over-year (YoY) spending, between 2025 and 2029 for artificial intelligence (AI) will grow by 31,9%, according to data from the International Data Corporation’s (IDC) Worldwide Artificial Intelligence IT Spending Market Forecast.
This investment, driven by the growth of Agentic AI-enabled applications and systems to manage agentic fleets, will reach $1,3-trillion in 2029.
IDC’s latest research reveals an unprecedented surge in Agentic AI spending and signals a transformation within enterprise IT budgets – especially when it comes to software – to investment strategies led by products and services based on an agentic AI foundation. This conversion is further supported by anticipated growth in platform solutions that enable companies to build, manage, and operate their agents more securely and efficiently.
“An important takeaway from this forecast is the clear alignment between the growth in (AI) spending and IT leaders’ trust that effective use of AI can boost future business success,” says Rick Villars, group vice-president, Worldwide Research at IDC. “Application and Services providers that are behind in putting AI into their products and not extending them with agents are risking market share losses to companies that made the decision to put AI at the centre of their product development roadmap.”
Key highlights from the research include:
- Infrastructure build-out continues – through 2029, service providers will account for 80% of infrastructure spend as they support massive increases in agentic workloads.
- Agent construction & control – a logarithmic (10x) increase in the number and complexity of third-party and custom-built AI agents used by enterprises in the next five years.
- App AI-enablement accelerates – spending on AI-enabled applications will increase faster than any segment, triggering major competitive shifts in the software industry.
- AI IT & business services – services providers will be the most profoundly affected as enterprises boost spending on agentic AI thus transforming IT business services.
The forecast also indicates that the adoption of agents and Agentic AI will accelerate innovation in how companies use technology and code to transform their business. These investments and the evolution of related products will increasingly determine the success or failure of the business and tech leaders who put them in place – and the businesses that use them. For this reason, informed leadership will be critical to success during these next several years.
“This research reveals several important issues for businesses to consider about the interconnection between labour and AI investment,” says Crawford Del Prete, president at IDC. “As an example, business leaders will need to pay particular attention to employee roles in an enterprise and how roles change as agents become more commonplace in business. Agents will change the nature of work, making some roles highly productive and others obsolete. Workers and enterprises will need to be more agile than ever before to keep pace.”
Coinciding with this growth in AI spending is a massive increase in the amount of underlying compute capacity required to support this agent growth. In the short-term, this will require significant and complex build-out from infrastructure providers which will be led by cloud providers.
Long-term, the focus on AI will likely divert funding in other areas of the tech stack. Whether from an enterprise or a service provider, spending on IT such as servers and storage which are not related to AI will be driven by efficiency and consolidation, limiting growth.