Forrester warns on 2026 tech budgets amid AI shifts

Forrester said business and technology leaders have turned more cautious on budget planning for 2026 as tariffs, trade wars, cyber threats and wider economic uncertainty reset expectations.

The research firm said volatility has reduced optimism compared with last year. It said scenario planning has taken a larger role in budgeting and investment decisions. Forrester pointed to the potential for both deeper cost reductions and unexpected openings for new spending.

Despite the change in tone, Forrester said many organisations still expect budgets to rise. It said 86% of technology leaders across industries anticipate higher budgets year on year. It also said technology leaders in financial services and healthcare expect double-digit increases. Forrester linked those expectations to spending on generative AI, analytics and threat intelligence.

Forrester's budget guidance covers technology and security, B2B and B2C marketing, customer experience, digital strategy, and sales and revenue operations. The firm positioned the guidance as a set of benchmarks and recommendations on where to increase investment, where to reduce spending and where to run experiments.

AI readiness

Forrester placed data literacy and AI readiness among its priorities for 2026 planning. It said organisations need ongoing programmes that train employees in responsible AI use and in interpreting AI-driven insights.

Forrester has noted that the adoption of AI within research and design workflows has increased among customer experience (CX) teams. However, the firm also highlighted a significant skills gap, reporting that only 32% of CX teams have mastered data literacy skills, while just 6% are currently planning to add or improve those capabilities.

Furthermore, Forrester identified customer insights and data management as a priority area for higher investment. It advised that leaders should develop more rigorous data collection strategies to navigate increasingly uncertain market conditions.

Marketing shifts

For B2C marketing, Forrester has recommended higher spending on search engine optimisation (SEO). It described the discipline as being in an "AI-integrated moment", highlighting the importance of content and technical SEO practices, the adoption of advanced SEO tools, and a shift in measurement towards brand visibility rather than traditional metrics such as rankings and average position.

In the B2B sector, Forrester noted that buying behaviour is changing rapidly due to the use of generative AI. According to its research, 89% of B2B buyers reported using or planning to use genAI in some aspect of their purchasing process. Forrester stated that this shift creates pressure on marketers to adapt their messaging for a "zero-click and prompt-driven world".

Forrester also advised B2B marketing leaders to reallocate 15% or more of content and or digital spend towards discoverability in AI searches. It said AI-driven search rewards clarity, structure and authority. It recommended modular content restructuring and schema markup improvements.

Cutbacks urged

For digital and technology leaders, Forrester identified areas where budgets may tighten. It said public cloud strategies have shifted from "cloud-first" to "cloud-as-necessary". It cited sovereignty and resilience regulations, geopolitics, pressure to reduce costs and a growing number of production-ready genAI use cases.

Forrester also highlighted legacy technology infrastructure. It called for a more radical approach to tackling technical debt. It argued for outsourcing legacy stacks to maintain operational reliability while freeing funds for modern systems.

In digital business, Forrester also advised leaders to reduce spending on extended reality. It said 81% of digital business leaders report their companies already invest in XR or plan to do so within the next 24 months. Forrester said consumer uptake remains elusive and it does not expect breakthrough adoption soon.

Testing agents

Forrester framed experimentation as a continuing budget line for 2026, with a focus on lower-cost tests and faster learning cycles. It highlighted agentic AI and industry-specific edge intelligence as areas where leaders should run trials.

For digital business leaders, it recommended testing AI agents and measuring business impact. It said 47% of digital business leaders are already investing in AI agents and 41% plan to do so in the next 24 months. Forrester said fully autonomous agents are not yet ready for enterprise adoption.

On edge intelligence, Forrester said enterprises increasingly collect inputs from mobile, internet-of-things and other edge devices. It said wide deployment is expected over the next two to four years as chipsets, form factors, 5G networks and on-device machine learning models develop.

Forrester placed its broader budget planning message in the context of ongoing uncertainty and the risk of abrupt change in funding conditions.

"While conservative budget expectations are a fine starting point for 2026, now is not the time to get complacent," said Sharyn Leaver, Chief Research Officer, Forrester. "With no end in sight to today's volatility, leaders should be prepared for both more aggressive cuts and unexpected investment opportunities. They can achieve this through constant, low-cost experimentation and gain the edge to outmaneuver competitors the moment the opportunity strikes. Forrester's Budget Planning Guides are designed to empower business leaders to invest wisely, scale back where needed, and experiment continuously to succeed in times of change."