AI Server Market size was valued at USD 45.4 billion in 2024 and is expected to exceed USD 421.6 billion by the end of 2037, expanding at over 18.7% CAGR during the forecast period i.e., between 2025-2037. In 2025, the industry size of AI server is estimated at USD 53.8 billion.
The surge in demand for generative AI applications is a major driver of the sector’s growth. Companies are investing in AI servers equipped with high-performance GPUs to train and deploy advanced models. The surge in popularity of ChatGPT and DALL E has catalyzed major investments in data center expansion globally, benefiting the AI server market. Furthermore, major companies are laying the groundwork for company-wide generative AI solutions to streamline operations and serve customers better. For instance, in September 2024, GE Aerospace announced working with Azure AI of Microsoft to launch a new AI assistant, AI Wingmate, throughout the company, and the company states that the new generative AI tool received around 500,000 queries, search, and employee interactions.
The AI server market is poised to expand owing to the rising adoption of AI in cloud computing. Industry leaders such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are at the forefront of deploying AI-optimized servers to cater to various enterprise needs. Here are a few instances of how the industry leaders are leveraging the opportunities in the market; For instance, in November 2024, IBM and AWS announced the decision to accelerate their partnership to scale responsible generative AI while in February 2024, Google Cloud and Kyndryl expanded partnership to deliver enterprise-ready generative AI solutions. The trends indicate the requirement for scalable AI server infrastructure to effectively handle the intensive computational requirements of AI.
Furthermore, the AI server market is positioned to provide lucrative opportunities for industry stakeholders. Advancements in edge computing are driving demand for AI servers that are capable of processing data closer to the source. For instance, in October 2024, Cisco launched plug-and-play AI solutions providing customers with the infrastructure pieces they need to accelerate their AI adoption. Additionally, rising AI use in various industries such as healthcare, retail, and automotive, is driving demand for AI servers. Major players in the market are set to leverage rising opportunities in emerging markets, such as APAC, Middle East, and Africa, and assist the global market in the continuation of its robust growth by the end of the forecast period.
Growth Driver
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
18.7% |
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Base Year Market Size (2024) |
USD 45.4 billion |
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Forecast Year Market Size (2037) |
USD 421.6 billion |
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Regional Scope |
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Hardware (GPU, CPU, ASIC, and FPGA)
In AI server market, GPU segment is poised to account for revenue share of more than 52.4% by the end of 2037. A major growth driver of the segment is the increasing deployment of generative AI and LLMs which require thousands of GPUs to process computations. Furthermore, advanced GPUs are uniquely suited for parallel processing demands, by training large neural networks and executing complex deep algorithms.
Additionally, advancements in CUDA programming are poised to allow developers to harness GPU capabilities more effectively benefiting the segment’s continued growth. Two recent instances in the market are indicative of the growth of the GPU segment in the AI server market. For instance, in November 2024, Nvidia announced that it is working with Google Quantum AI to accelerate the design of its next-generation quantum computing devices using simulations powered by the NVIDIA CUDA-Q platform. Again, in November 2024, IonQ announced leveraging NVIDIA CUDA-Q to advance hybrid quantum computing.
The CPU segment of the AI server market is positioned to increase its revenue share during the forecast period. A major driver of the segment’s growth is the development of specialized AI-optimized processors that provide support for large memory bandwidths. Furthermore, innovations in chip design enable CPUs to handle AI-specific workloads efficiently, which positions them as a key component in next-generation AI servers. For instance, in July 2024, Applied Systems Inc. launched innovations in materials engineering designed to enhance the performance-per-watt of computer systems by enabling copper wiring to scale to a 2nm logic node and beyond.
Additionally, CPUs are essential for tasks requiring sequential logic in AI and businesses are launching advanced CPUs that can seamlessly handle end-to-end AI workloads. For instance, in October 2024, AMD launched the 5th Gen AMD EPYC CPUs, and is tailor-made for GPU-powered AI solutions that need in-host CPU capabilities.
Servers (AI Training Server, AI Data Server, and AI Inference Server)
The AI training server segment of the AI server market is poised to register a large revenue share in the market. A major driver of the segment’s growth is owed to the exponential growth of generative AI, along with LLMs and computer vision applications. Such applications require processing abilities for model training that the AI training server provides. Furthermore, AI training servers help organizations to train LLM models faster benefiting the segment’s growth.
AI training servers for specific use cases such as natural language processing are poised to experience heightened demand as globally, countries invest large amounts to boost AI capabilities. Additionally, businesses can leverage the rising demand by positioning scalable AI training servers. For instance, in August 2024, Bitdeer AI launched its advanced AI Training Platform that is designed to provide fast and scalable AI/ML inference with serverless GPU infrastructure.
Our in-depth analysis of the global AI server market includes the following segments:
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Hardware |
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Servers |
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End user |
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North America Market Forecast
North America in AI server market is set to hold more than 31.6% revenue share by 2037. The market’s growth is attributed to the large-scale proliferation of generative AI in various sectors, ranging from healthcare to finance. The robust technological ecosystem in the region drives demand for AI servers as the U.S. and Canada strive to make leaps in the global AI race. Furthermore, government-backed initiatives such as the National Artificial Intelligence Research Institute foster innovation in the market.
Furthermore, the presence of industry leaders in North America benefits the sector’s growth by ensuring early availability in launches, and the entrance of new players is poised to create a competitive sector boosting revenue streams. For instance, in June 2023, Hewlett Packard Enterprise launched the AI cloud HPE GreenLake for LLMs poised to assist any enterprise to privately train, tune, and deploy large-scale AI.
The U.S. holds the largest revenue share in the North America AI server market. The sector’s profitable expansion in the U.S. is owed to the presence of a vast digital infrastructure. The government has played a proactive role in backing AI-driven solutions, that drive demand for AI servers in the country. Additionally, the rapid growth of generative AI along with autonomous systems requires servers that are capable of processing large-scale data volume.
Major players in the U.S. market are expanding the scope of their applications which is beneficial for the AI server market, as it drives demand. For instance, in September 2024, Deloitte announced the launch of a turnkey generative AI solution and AI factory as a service, powered by NVIDIA and Oracle. Deloitte’s standing in the global market is promising for the success of the generative AI solution, and adoption by businesses will drive the necessity for AI servers.
Canada is exhibiting rapid growth in the AI server market and is poised to increase its revenue share by the end of the forecast period. A key driver is the rising adoption of AI-powered solutions by domestic businesses. Furthermore, the growth of AI research hubs in the country is projected to benefit the sector. A significant driver of the market is the surging investments by the government to build an advanced AI infrastructure in the country, that is expected to provide steady opportunities in the Canada AI server market. For instance, in December 2024, the government announced plans to invest USD 2 billion to build domestic AI computing capacity, and the investment will also assist small and medium-sized enterprises (SMEs) through the AI access fund.
APAC Market Forecast
The APAC AI server market is positioned to exhibit the fastest growth curve in comparison to other regions apart from North America during the forecast period. The rapid rise in regional data centers is a major market driver. APAC is experiencing a surging reliance on cloud computing that drives demand for AI servers. China, Japan, India, South Korea, and Australia are major markets in the region.
Furthermore, regional businesses are leveraging partnerships to provide advanced generative AI solutions. For instance, in July 2024, Cohere and Fujitsu announced a partnership to provide generative AI for enterprises to improve customer and employee experience. The regional market is well-positioned to expand by the end of the forecast period
China has registered a dominant share in the AI server market. The sector’s growth in China is owed to the integration of AI in strategic sectors, and substantial investments in high-performance computing. The rapid growth of hyperscale data centers in the country drives demand for AI servers. The thriving AI ecosystem in China is positioned to create lucrative opportunities in the market during the forecast period. Ambitious government plans such as the New Generation Artificial Intelligence Development Plan foster innovation. Domestic companies are rapidly positioning AI server solutions for generative AI in the market. For instance, in June 2024, Advantech launched Edge AI server solutions for generative AI, known as the AIR 520 Edge AI Server.
The India AI server market is poised to increase its revenue share during the forecast period. The growth is complemented by the development of AI applications for various sectors in the country coupled with a rapidly expanding digital economy. Furthermore, India is uniquely positioned as a global IT outsourcing hub that has boosted the development of advanced AI server architectures to support cloud-based applications.
Furthermore, the rising investment by established companies in the AI server market in India bodes well for the sector’s future. For instance, in September 2024, Lenovo announced the establishment of high-performance AI server manufacturing in India. Additionally, Lenovo’s investment is an indication of companies leveraging India’s positions as a tech hub and adhering to the government’s initiatives such as the AI for All vision.
The AI server market is projected to expand during the forecast period. The leading market players are actively investing in R&D to develop cutting-edge server technologies that are optimized for heavy AI workloads. Additionally, strategic partnerships to utilize resources, with data centers and with cloud providers are enabling major industry players to expand their footprint in the AI server sector. For instance, Red Hat Inc. announced that it has signed a definitive agreement to acquire Neural Magic, to make gen AI more accessible to organizations through the open innovation of vLLM.
Furthermore, major market players are strengthening their solutions portfolio in the sector to expand revenue streams. For instance, in November 2024, Dell Technologies announced the Dell AI Factory which will streamline AI workloads and data management for other businesses. The factory is poised to improve Dell’s standing in the B2B solutions segment of the AI server market.
Here are some key players in the AI server market:
Author Credits: Abhishek Verma
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