AI Server Market to Boom, Reaching USD 430 billion by 2033

Yogesh Shinde
Yogesh Shinde

Updated · Jul 8, 2024

SHARE:

Market.us Scoop, we strive to bring you the most accurate and up-to-date information by utilizing a variety of resources, including paid and free sources, primary research, and phone interviews. Learn more.
close
Advertiser Disclosure

At Market.us Scoop, we strive to bring you the most accurate and up-to-date information by utilizing a variety of resources, including paid and free sources, primary research, and phone interviews. Our data is available to the public free of charge, and we encourage you to use it to inform your personal or business decisions. If you choose to republish our data on your own website, we simply ask that you provide a proper citation or link back to the respective page on Market.us Scoop. We appreciate your support and look forward to continuing to provide valuable insights for our audience.

Introduction

The size of the Global AI Server Market is projected to reach approximately USD 430 billion by 2033, up from USD 31 billion in 2023, representing a Compound Annual Growth Rate (CAGR) of 30.3% from 2024 to 2033.

AI servers, which are highly specialized computer systems, are engineered to execute complex tasks associated with artificial intelligence, including deep learning, machine learning, and extensive data analysis. These servers are outfitted with high-performance computing capabilities, including advanced processors, graphics processing units (GPUs), and dedicated AI accelerators, all essential for managing the demanding computational needs of AI algorithms. AI servers are pivotal in facilitating AI workloads, promoting efficient, and scalable AI implementations.

The AI server market is experiencing robust growth, driven by the escalating demand for artificial intelligence (AI) across various industries. One of the primary growth factors is the increasing adoption of AI technologies for data analytics, machine learning, and complex computational tasks, which require specialized, high-performance server infrastructures. As industries such as healthcare, finance, and automotive increasingly rely on AI for operational efficiency and innovation, the demand for AI servers is expected to surge.

However, the market faces several challenges. The high cost of initial setup and ongoing maintenance of AI servers can be a significant barrier for small to medium-sized enterprises (SMEs). Additionally, the complexity of AI technologies necessitates skilled professionals, leading to a talent shortage that can impede the deployment and optimization of AI server solutions.

AI Server Market

Despite these challenges, opportunities abound in the AI server market. There is a growing interest in edge computing, which requires powerful AI servers to process data locally and reduce latency in real-time applications. Furthermore, the ongoing advancements in AI and machine learning models are continuously expanding the capabilities of AI servers, opening new avenues for their application across different sectors.

Key Takeaways

  • Market Analysis: The AI server market is projected to reach USD 430 billion by 2033, exhibiting a compound annual growth rate (CAGR) of 30.03% during the forecast period from 2024 to 2033.
  • AI Training Segment: In 2023, the AI training segment contributed the largest market share, accounting for 39% of the total market.
  • GPU Segment: The GPU segment dominated the market in 2023, capturing a substantial 56% market share.
  • IT and Telecom: This industrial segment registered the largest market share in 2023, holding 28% of the market.
  • North America: North America emerged as the leading region, with the largest market share of 33% in 2023.

AI Server Statistics

  • The Artificial Intelligence Market size is anticipated to reach around USD 2,745 billion by 2032, up from USD 177 billion in 2023, growing at a CAGR of 36.8% during the forecast period from 2024 to 2033.
  • The rapid adoption of artificial intelligence (AI) across industries is evidenced by the fact that 35% of businesses have integrated AI into their operations. Additionally, 77% of devices in use feature some form of AI capability, highlighting its pervasive influence on technology.
  • A significant 90% of organizations support AI for a competitive advantage, underscoring the strategic importance of AI in maintaining market leadership. By 2030, AI is projected to contribute a staggering $15.7 trillion to the global economy, indicating its potential to drive substantial economic growth.
  • Despite concerns over job displacement, AI is expected to create a net gain in employment. By 2025, AI might eliminate 85 million jobs but will simultaneously create 97 million new ones, resulting in a net gain of 12 million jobs.
  • AI servers, which accounted for about 23% of the total market in 2023, are forecasted to see continued growth. AI server revenue is projected to reach approximately $49.1 billion by 2027, with GPU-accelerated server revenue expected to grow faster than other accelerators.
  • The global Application Server Market is expected to secure a valuation of USD 23.5 billion in 2024, with a CAGR of 13.4% during the forecast period. By 2033, the worldwide market is anticipated to capture a valuation of USD 72.8 billion.
  • The average selling price (ASP) for AI servers will grow at a CAGR of 4.5% from 2022 through 2027, peaking at $32,300 in 2024.
  • Hyperscalers, which typically account for around 40% of overall server market volumes, are expected to account for 67% of AI server units in 2024. Although absolute units will increase, this proportion is projected to fall to 55% by 2027.

Emerging Trends

  • Edge AI Expansion: The AI server market is witnessing a significant shift towards Edge AI applications, which decentralize AI server workloads and broaden the AI usage spectrum across various devices including AI PCs​​.
  • Increased AI Workloads: There’s a growing demand for AI servers to handle the high-performance computing demands of AI applications, fueled by the increasing complexity and scope of AI workloads across industries​​.
  • Advanced AI Hardware Integration: The integration of specialized AI hardware like GPUs and TPUs is on the rise, optimizing servers for complex AI tasks and enhancing performance for applications such as deep learning and natural language processing​.
  • Generative AI Influence: The influence of generative AI is becoming more pronounced in the AI server market, with businesses using these capabilities for creating synthetic data and enhancing customer interaction​.
  • Sustainability Focus: There is a growing trend towards developing more energy-efficient AI server solutions, aligning with global sustainability goals and reducing the environmental impact of large-scale compute operations​.

Top Use Cases for AI Servers

  • Data Analytics and Management: AI servers are crucial in managing and processing large datasets for real-time analytics, helping businesses gain insights and make informed decisions.
  • AI Model Training and Inference: They are extensively used for training complex machine learning models and performing AI inference tasks, essential for applications in various sectors such as healthcare and automotive​​.
  • Cloud Computing Services: AI servers support the backbone of cloud computing environments, managing workloads for cloud service providers and enhancing service delivery to end-users​​.
  • Internet of Things (IoT) and Smart Devices: They play a key role in processing data from IoT devices, supporting smarter and more efficient operational technologies in industries like manufacturing and logistics​.
  • Content Delivery Networks (CDNs) and Streaming Services: AI servers are used to optimize content delivery networks and streaming services, ensuring efficient data flow and improving user experience for video streaming and online gaming platforms.

Major Challenges in the AI Server Market

  • Cost of High-Performance Hardware: The significant investment required for high-performance AI hardware remains a major barrier for market entry and expansion​​.
  • Energy Consumption and Efficiency: AI servers consume substantial energy, which not only raises operational costs but also impacts sustainability goals​.
  • Technological Export Restrictions: U.S. restrictions on technology exports have driven competitors, especially in China, to develop their own AI chips, impacting U.S. companies like NVIDIA​.
  • Competitive Pressure from Proprietary Developments: The trend towards proprietary ASIC development by major cloud providers like Google, AWS, Microsoft, and Meta is increasing, impacting traditional hardware suppliers​.
  • Supply Chain and Delivery Challenges: Companies like NVIDIA are facing supply chain issues that affect the delivery timelines of AI server components, which could impact their ability to meet market demand efficiently​​.

Market Opportunities

  • Increasing Demand for AI Applications: As AI applications proliferate across various sectors, the demand for robust AI servers that can handle complex workloads is also rising​.
  • Advancements in AI-Specific Hardware: Innovations in hardware like GPUs and TPUs are creating opportunities for the development of more efficient and powerful AI servers​​.
  • Expansion into New Markets: The AI server market is expanding into new areas such as telecommunications, automotive, and gaming, driven by advancements in AI technologies​​.
  • Partnerships and Collaborations: Strategic collaborations and partnerships, like those between major cloud providers and AI server manufacturers, are enhancing market growth opportunities.
  • Growth in Cloud and Edge Computing: The increasing adoption of cloud and edge computing technologies is creating vast opportunities for the deployment of AI servers in these infrastructures​​.

Recent Developments

ADLINK Technologies

In January 2024, ADLINK unveiled their MEC edge server, which is now officially validated as ‘NVIDIA GPU Cloud-Ready’. This validation aims to speed up AI deployment for customers, offering high performance and easy deployment of AI frameworks for GPU-based machine learning and deep learning. This development is particularly beneficial for industries like telecommunications, smart cities, and autonomous vehicles​.

Dell Technologies

In April 2023, Dell Technologies introduced the PowerEdge XE9680 server, designed specifically for AI workloads. This server supports NVIDIA H100 GPUs and aims to provide a robust infrastructure for demanding AI applications​​.

Hewlett Packard Enterprise (HPE)

In November 2023, HPE launched the ProLiant DL380 Gen11, which integrates AMD EPYC processors and supports NVIDIA A100 Tensor Core GPUs. This server is optimized for AI and high-performance computing workloads, focusing on delivering enhanced computational power and efficiency​.

Huawei Technologies

In February 2024, Huawei announced the FusionServer Pro 2298 V5, featuring advanced cooling solutions and enhanced storage capabilities to support AI and big data applications. This server aims to improve performance and reliability for enterprise AI tasks​ ​.

IBM Corporation

In March 2024, IBM introduced the IBM Power E1080, which leverages the new IBM Power10 processor. This server is designed to accelerate AI inferencing and training workloads, offering enhanced security features and scalability for large AI models​​.

NVIDIA Corporation:

In June 2023, NVIDIA released the DGX GH200, a new AI supercomputer platform that integrates Grace Hopper Superchips. This platform is designed for large-scale AI and high-performance computing applications, providing significant improvements in AI processing capabilities​.

Super Micro Computer, Inc.

In September 2023, Supermicro launched the SuperServer 620P-TRT, which supports Intel Xeon Scalable processors and NVIDIA A100 GPUs. This server is optimized for AI, deep learning, and data analytics, offering enhanced performance and flexibility​​.

Conclusion

In conclusion, the AI server market has experienced significant growth and transformation in recent years. AI technologies have become increasingly important across various industries, driving the demand for powerful and efficient computing infrastructure. AI servers, specifically designed to handle complex computations and data-intensive tasks, have emerged as a crucial component in enabling AI applications.

The market has witnessed a surge in the adoption of AI servers, propelled by advancements in machine learning algorithms, deep learning frameworks, and the availability of vast amounts of data. Organizations across sectors such as healthcare, finance, manufacturing, and retail are harnessing the power of AI servers to enhance decision-making, automate processes, improve customer experiences, and gain a competitive edge.

Discuss Your Needs With Our Analyst

Please share your requirements with more details so our analyst can check if they can solve your problem(s)

SHARE:
Yogesh Shinde

Yogesh Shinde

Yogesh Shinde is a passionate writer, researcher, and content creator with a keen interest in technology, innovation and industry research. With a background in computer engineering and years of experience in the tech industry. He is committed to delivering accurate and well-researched articles that resonate with readers and provide valuable insights. When not writing, I enjoy reading and can often be found exploring new teaching methods and strategies.

Request a Sample Report
We'll get back to you as quickly as possible