2026 is shaping up to be a complex year for tech leaders. The profile of CIOs is rising in the organisation, as the potential for technology to drive success through transformation is documented time and again.
However, this also means that demands, expectations, and scrutiny are more intense, which, combined with economic uncertainty, will make the upcoming budget and strategy season even more challenging than usual. Gartner has forecast that global IT spending will grow by 10.8% this year, reaching an estimated $6.15 trillion. This growth will be driven especially by increased spending on data centres and AI infrastructure.
Boards of directors are seeking the growth and stability that digital transformation can deliver, so there is potential for IT budgets to increase compared to previous years. But economic pressures are tightening. Leaders must prioritise spending across cloud expansion, AI, cybersecurity, and resilience, allocating finite resources to support these initiatives. This involves balancing innovation, risk, and sustainability to positively impact business goals.
Top Challenges for 2026
This year, tech leaders are dealing with ongoing concerns that have been part of the landscape for a while (talent shortages, cybersecurity threats) and others that are evolving (AI integration and governance, supply chain disruptions). Top concerns for CIOs outlining a strategy and building a budget for the coming year include:
The Impact of AI
AI is the fastest-growing segment of enterprise technology expenditure, reaching $2 trillion, or one-third of total IT spend. Hyperscale tech companies are committing record amounts of CapEx in 2026 to AI infrastructure, including $200 billion from Amazon, $185 billion from Google, and $135 billion from Meta.
Read more: Google to Double Capital Expenditures in 2026 Amid Infrastructure Push
But this high investment comes with trade-offs. Now that the initial flurry of interest and investment in AI has died down (somewhat), stakeholders are looking for measurable results and real returns for their AI investment. CIOs must balance the near-term demand for AI capabilities with the need to demonstrate measurable ROI and avoid overcommitment.
For budgeting purposes, this means evaluating:
- How much to invest in internal AI platforms and applications vs. leveraging cloud providers and external products
- What benchmarks can be used to prove that AI deliverables justify spend?
Cloud Optimisation and Expansion
Cloud expenditures now account for a third of total enterprise IT budgets, making them a primary factor in the overall forecast. Public cloud end-user spending is expected to reach $723 billion in 2025 and more than $840 billion in 2026.
Hybrid and multi-cloud adoption is a key trend, with 75% of organisations expected to embrace hybrid and multi-cloud strategies this year. This underscores the need for technology leaders to adopt cloud strategies that balance flexibility and risk mitigation.
On the one hand, on-premises infrastructure enables predictable costs and controlled latency while addressing local storage issues that are becoming common in the international regulatory environment. Cloud, on the other hand, offers the flexibility, scalability, and agility that have been central to IT’s growth mindset over the past several years.
While overall cloud spend is increasing, cloud budget overruns are increasing as well, making these numbers the subject of intense scrutiny in some organisations. Enterprises waste an estimated 30% of cloud budgets on unused or idle resources – so planning for a cloud audit or optimisation effort in the coming year may be a good way to reclaim those funds.
For the board presentation, cloud must be articulated not just as an operational expenditure, but as a driver of agility and competitive differentiation.
Evolving Cybersecurity Threats
Investing in cybersecurity isn’t optional – it’s table stakes for organisations of all sizes. Strategically, cybersecurity investment offers two key benefits to a company: risk mitigation and support for goals and objectives.
85% of organisations increased their cybersecurity budgets in 2025, and nearly 90% plan to increase them further in 2026. 99% of CISOs agree that AI will transform cloud security, but most are still working to adapt to these changes. Nearly half of firms are taking an AI-centric approach to their overall cybersecurity budget.
More than half of CISOs surveyed use 25 or more tools for cybersecurity, with large enterprises using 50 or more. Cloud complexity and tool sprawl are making it more difficult to manage a comprehensive cybersecurity programme – a challenge that is compounded by costs, talent shortages, and an evolving threat landscape.
To manage this, tech leaders must fund both tools and talent, ensuring they work directly to support a future-focused cybersecurity strategy.
The trade-offs inherent in this are significant. CIOs must decide which resources should be allocated to preventative cyber measures versus broader platform investments. Often, risks must be quantified to justify expenditures.
Operational Resilience
Ideally, technology systems are resilient, and failover and disaster recovery plans work without a hitch. This cannot happen without a solid resilience framework that is strategically developed, tested, and validated across a multitude of scenarios. Delivering critical services through disruptions – whether they are caused by natural disasters, cyber incidents, or other events – can impact a company’s profitability, customer base, and brand reputation. It is important to tell this story in the budget to justify resilience and disaster recovery expenditures.
Comprehensive capability maturity models and resilience benchmarks can help justify budgets beyond pure cost, tying investment to measurable risk reduction.
While 2026 is a challenging year for infrastructure budgets, there are some key trends that support organisational spending on tech infrastructure. These include the continued upward trajectory of AI infrastructure spending – even amid market concerns about an AI bubble. A changing regulatory environment is top of mind, so offering a clear strategy to manage these changes can offer the IT budget a clear advantage with the board. Finally, demonstrating how technology supports larger organisational goals with clarity and confidence is the key to budget approval.