New Delhi [India], June 18 (ANI): Enterprise technology spending growth is showing signs of moderation as companies become more cautious about large IT investments while assessing the impact of artificial intelligence (AI) on future budgets, according to a Goldman Sachs CIO survey.

The survey showed Goldman Sachs' Overall IT Spending Index fell to 65 from 68, while its IT Capital Spending Index declined to 59 from 65.5.

'Our overall IT Spending Index decreased to 65.0 from 68.0, and our IT Capital Spending Index decreased to 59.0 from 65.5,' the report said, adding that both indicators remain above the expansion threshold of 50 despite falling below their 10-year averages.

According to Goldman Sachs, the moderation in spending is partly linked to ongoing evaluations of AI's long-term impact on enterprise technology budgets.

'We suspect that the moderation may be tied to ongoing AI evaluations,' the report said, citing possible shifts in spending away from non-AI categories and caution around committing to large IT projects.

Despite the softer spending outlook, AI adoption continues to accelerate across enterprises as organisations move beyond pilot projects and begin deploying AI applications at scale.

'AI momentum builds as enterprises scale production deployments,' Goldman Sachs said.

The survey found that while 88 per cent of chief information officers (CIOs) expect AI to account for less than 10 per cent of IT budgets over the next 12 months, 42 per cent expect generative AI spending to exceed 10 per cent of budgets within the next three years.

AI investments are largely being funded through budget reallocations rather than fresh spending. 'Two-thirds are funded via reallocation,' the report noted, with some firms shifting resources from application software and labour-related expenses.

The survey also highlighted a divergence in spending trends across technology categories.

Goldman Sachs said expectations for spending on servers, storage and personal computers improved as enterprises invest in AI infrastructure and replace ageing equipment. The report noted that 60 per cent of respondents expect to increase server spending, while 75 per cent expect higher storage spending.

In contrast, networking equipment and IT services spending remain under pressure. 'Networking spending expectations worsened sequentially,' the report said. Only 35 per cent of respondents expect networking spending to rise over the next year, while 31 per cent anticipate a decline.

The outlook for IT services has also weakened. Goldman Sachs said the share of respondents expecting IT services spending to increase fell to 28 per cent from 40 per cent previously, while those expecting spending to decline rose to 39 per cent from 32 per cent.

Among technology vendors, Microsoft remained the most strategic provider for respondents, followed by Amazon and Google, reflecting the growing importance of cloud and AI ecosystems in enterprise technology decisions. (ANI)