Published on the 04/02/2026 | Written by Heather Wright
US$600b gamble for hyperscalers…
The tech expansion – and AI’s rise – is set to continue at pace in 2026, with S&P Global forecasting a nine percent rise in global IT spending in 2026 – driven overwhelmingly by AI infrastructure expansion. But the organisation is cautioning that if AI monetisation isn’t forthcoming, all bets might be off.
Last year saw a ‘robust’ 12 percent increase in IT spend, (IDC has suggested that growth rate is likely the highest since 1996) with S&P saying it believes enterprises increased their total IT budgets to accommodate new AI-related investments, rather than reallocate or take away from existing IT priorities.
“Enterprise IT budgets could tighten if monetisation of AI investments proves low or delayed.”
That AI spend, which includes infrastructure, software, services and AI-embedded devices, is now making up 26 percent of overall IT spend, according to Gartner figures.
In a report very much skewed towards the impacts on vendors – S&P Global is, afterall a financial intelligence company for whom credit ratings are key – S&P notes that enterprises expanded IT budgets in 2025 specifically to fund AI initiatives, rather than shifting money away from core operations, maintenance or long-standing digital transformation programs. Enterprise spending, which started the year cautiously, accelerated through the second half of 2025 to reach high single-digit growth.
However, in a now all-too-familiar tale, AI monetisation is lagging AI investment with S&P noting a ‘high degree of variability’ in its forecasts as concerns around the sustainability of AI-related investments continue to build. Despite accelerating cloud revenue growth among hyperscalers, S&P says enterprises themselves have yet to see broad, measurable returns from AI deployments and while cloud service provider capex spend is forecast for strong growth, enterprise budgets might not be so forgiving.
Despite its optimistic title, AI Tailwinds Bode Well for 2026 IT Spending, the report warns that tightening enterprise IT budgets are a risk in 2026 if AI investment payoffs remain limited or delayed.
“Negative feedback on the pace of AI monetisation could cause enterprises to re-evaluate their AI projects and cloud service providers to slow data centre expansion. Credit markets may no longer support unlimited infrastructure financing under such a scenario,” S&P says. “This has the potential to set up for a rocky 2027.”
2026 outlook
S&P is forecasting global IT spend to rise nine percent this year, far ahead of global GDP growth projections of three percent, but it notes the forecast carries a ‘high degree of variability’ due to uncertainty around the sustainability of AI investment.
Enterprise budgets for 2026 are expected to skew strongly toward cloud, cybersecurity, data and analytics and AI infrastructure, however discretionary projects remain constrained, with elongated sales cycles, particularly for large transformation deals, and continued funding uncertainty across the public sector, education and healthcare clients.
Software is forecast to grow on pace with last year, at around 10 percent, but S&P highlights that budget scrutiny has increased and deal cycles are lengthening – a potential early indicator of pressure that could intensify if AI returns fail to meet expectations.
SaaS is expected to be a key driver, along with digital transformation and cloud migration. The transition to SaaS, which now accounts for 60 percent of the total software market, was a driver for 2025 software figures, along with, and linked to, enterprise focus on cost efficiencies and digital transformation.
Despite the hype around agentic AI, S&P isn’t expecting it to be a meaningful ratings driver in 2026. “Many software companies report high client interest and growing adoption, yet the revenue impact remains low. However, we believe generative AI features may create incremental growth opportunities and value-based pricing uplift for software vendors over time and increased consumption of existing product suites.
It cites Salesforce revenue growth – the company’s Agentforce and Data Cloud 360 annual recurring revenue more than doubled year over year to hit US$1.4 billion in the most recent quarter – as an example.
While enterprises may be cautious, albeit still spending, it’s the largest data centre players whose investments are eye-wateringly high: In 2025 estimated capital expenditure for Microsoft, Amazon, Alphabet, Meta and Oracle hit a combined US$437 billion, up 68 percent year on year (and, S&P admits, far surpassing its initial forecast of 20 percent a year ago). This year, S&P is expecting cloud service providers’ capital expenditure to close in on US$600 billion thanks to a 38 percent rise in spend. Total capex spend is forecast to hit $3-4 trillion from 2025 to 2030.
The investment is focused primarily on AI training capacity and data centre buildouts, and S&P points out that hyperscalers are now reaching a point where external funding is becoming necessary, with recent debt issuances in the bond market by major operators to support continued investment.
“Their commitment to investing hundreds of billions in AI data centres and high-powered AI chips remained steadfast even in the face of the Trump administration’s threat of substantial tariffs on global trading partners in April and the cautious pace at which enterprise customers are adopting AI in the workplace.”
The release of an IT focused report by S&P is itself something of a milestone, highlighting the importance of IT spend – and AI-driven IT spend – on broader economic and credit-market assessments.
“We maintain a positive long-term view of the technology industry. Sectors from health care to energy are increasing their investments in IT, and AI in particular, to increase sales, hasten research and development and improve operational efficiency.”
