Government and Private Sector Investments Key Drivers
Software spending in the MENA region is set to reach $19.98 billion by 2025, fueled by rising demand for generative artificial intelligence (GenAI). Overall IT spending in the region is projected to hit $230.8 billion, reflecting a 7.4% increase from 2024, according to Gartner’s latest analysis.
Surge in Software Spending
The MENA region is experiencing rapid growth in software investments, with a forecasted increase of 13.7%. This rise underscores the commitment of Chief Information Officers (CIOs) to adopt GenAI and cloud technologies, which are shaping expenditures across infrastructure, software, and services.
Globally, IT spending is expected to rise to $5.61 trillion in 2025, marking a 9.8% growth compared to 2024. However, Gartner warns that rising costs may impact the real value of budget increases, as CIOs face pressure to manage expenses effectively.
IT Services and AI Adoption Lead Spending
Over 70% of MENA’s IT spending will be allocated to IT services firms and hyperscalers. These companies are pivoting to dominate the AI-optimized server market, projected to handle $1 trillion worth of AI-enabled servers by 2028.
The region’s IT transformation is largely driven by governmental initiatives and private investments aimed at positioning MENA as a global AI leader. Investments in R&D, digital infrastructure, and workforce upskilling are pivotal for achieving this goal.
Strategic Focus on GenAI and Digital Transformation
MENA CIOs are adopting a more strategic approach to GenAI, aligning use cases with business priorities and addressing data management challenges. Emphasis is being placed on AI literacy, cybersecurity, and cloud platforms to build scalable and secure infrastructures.
Data center systems are set to grow the fastest, with an annual increase of 14.9%, driven by the need for enhanced data processing, AI adoption, and cloud services.
Governmental and Economic Impact
Governments in the region are heavily investing in digital transformation, fostering partnerships with tech innovators to promote economic diversification. These initiatives are critical for enhancing global competitiveness and ensuring resilience in a rapidly evolving technology landscape.
As MENA organisations refine their AI strategies, a collective focus on AI literacy, strategic investments, and robust cybersecurity will be vital for leveraging the transformative potential of generative AI in the coming years.