The new research covers 423 IT buyers in North America and Europe, surveyed in May.
Four shifts stand out:
AI and cloud lead the budget growth
In mid-2025, buyers planned 3.6% spending growth for 2026. They now expect 5.8%, the strongest reading this survey has recorded. Last year landed at 4.6%.
Net spending intent over the next 12 months (share increasing minus share decreasing):
AI/ML, including GenAI and AI agents: +66, up 21 points since July 2025
Cloud services: +38, up 11 points
Security : +26, up 3 points
AI and cloud saw the biggest improvement. Security ranks third in spending priorities.Analytics is also positive, all remaining categories are flat or negative.
Buyers are funding AI via larger budgets and cuts elsewhere. Cloud and security benefit as buyers fund the infra needed to deploy AI at scale.
Rising spend, shrinking vendor lists
AI is the only category with net vendor expansion: 55% of buyers plan to expand their AI supplier base; 21% plan to consolidate it.
Cloud is neutral: 28% expanding, 28% consolidating.
Every other category faces consolidation. Even security, where 34% plan to cut suppliers versus 26% expanding.
More spending will flow through the same or fewer vendors.
IT services face a change in spending priorities
The net spending-intent balance for services dropped from +16 in July 2025 to -3 now, a 19-percentage-point fall.
Last year it was just below cybersecurity and now it’s on the net cut list. More buyers now put services among their biggest spending cuts than their biggest increases, reversing last year's positive balance expectation.
Yet the longer-term picture looks steadier. Over the past three years:
44% of IT buyers outsourced more
31% made no major change
24% brought more work in-house
That suggests buyers will keep using external partners while becoming more selective about the work they fund.
For partners, the link between their services and the customer's AI priorities becomes essential.
AI returns improve as more companies become AI-mature
Reported weighted-average ROI to date on GenAI and AI agents rose from 11.2% in mid-2025 to 13.8% now.
Much of that improvement comes from more respondents falling into higher-maturity groups. High-maturity firms report roughly 19% ROI, versus 8–9% for the least mature groups.
Still modest returns against the expectations, but the investment case is getting stronger as more companies learn to deploy it.
Source: IT Spending Pulse
