New data from ratings agency Standard & Poor’s (S&P) has estimated that IT spending on a global basis rose in 2024 by 8.3% – a huge leap on 2023’s figures. While 2025 will see an estimated 9% increase in tech spending, with….you guessed it….AI as the main reason for the surge.
Another key factor – albeit also connected to AI – is the spending on new data centres, or the expansion of existing ones. For example: ‘S&P Global Ratings estimates capital spending by large data centre players (Microsoft, Alphabet, and Meta Platforms) increased nearly 50% in 2024 to about $160 billion.’
And it’s interesting that yesterday the UK Government announced a big push to build more data centres here as part of its AI Action Plan, with even planning rules to be relaxed to allow more to be built. Plus, as mentioned, this all goes hand in hand with genAI processing needs.
‘Enterprises are entering 2025 with an improving IT spending view as they continue their transition to the cloud and slowly ramp up their investments in generative AI projects,’ S&P added.
They also noted that growth in spending on semiconductors (for chips) would increase, and that incoming President Trump’s tariff plans could cause instability, however they expected overall demand for IT to grow regardless.
In fact, demand is so high that S&P predicted that even harmful tariffs ‘…could be managed over time by most hardware providers by passing on much of the incremental costs to end users and through supply chain reallocation, albeit gradually.’
So, Trump may indirectly add to the cost of running a tech business, which will mean that tech costs will be passed onto law firms and inhouse legal teams…..yet, that won’t slow demand….or so it’s predicted.
Overall, and in light of the earlier piece related to Thomson Reuters about increasing tech costs for law firms (see here), it seems that 2025 will be a year of more money spent on legal tech overall, both for sector-driven and macro-economic trend reasons.