Agentic AI to Claim 26% of Global IT Budgets by 2029

Market intelligence firm IDC forecasts that Agentic AI will dominate IT budgets over the next five years, accounting for 26% of worldwide IT spending. The surge in investment is expected to grow at a 32% year-over-year rate from 2025 to 2029, potentially reaching $1.3 trillion (£960.7m) by 2030.

Key Highlights:

• Unprecedented Growth: Agentic AI-enabled applications and systems to manage agentic fleets are driving this spending surge.
• Platform Solutions: Investments will be bolstered by platforms that help businesses build, manage, and operate AI agents more securely and efficiently.
• Infrastructure Spend: Service providers are projected to account for 80% of infrastructure spend to support the rise in agentic workloads.
• AI Agents Proliferation: Enterprises could see a 10x increase in the number and complexity of third-party and custom-built AI agents.

Industry Impact:

• Software Industry Shifts are expected as AI-enabled applications grow faster than other segments.
• Service Providers will be most affected, with enterprises increasing spending on agentic AI, transforming IT business services.
• Non-AI IT Spending (e.g., servers, storage) may face reduced growth due to diverted funds toward AI initiatives.

Expert Insight:

Rick Villars, IDC’s Group VP for Worldwide Research, emphasized:

"Application and services providers that are behind in putting AI into their products and not extending them with agents are risking market share losses.""

Related Reading:

• Gartner: By 2027, Over 40% of Agentic AI Projects Will Be Cancelled
• Report: AI Agents Are Triggering Business Restructure
• PwC Interview | How Agentic AI is Reshaping Business

Long-Term Outlook:

• Cloud Providers will lead the complex build-out of compute capacity to support AI agents.
• Business Success will hinge on informed leadership and strategic AI investments, according to IDC.