AI Server Market Size - By Hardware (GPU, ASIC, FPGA, CPU), By End User (IT & Telecommunication, Transportation and Automotive, BFSI, Retail and Ecommerce, Healthcare and Pharmaceutical, Industrial Automation), By Servers & Forecast, 2024 - 2032

AI Server Market Size

AI Server Market size was valued at USD 38.3 billion in 2023 and is estimated to register a CAGR of over 18% between 2024 and 2032. The growth of the market can be attributed to the growing adoption of AI across various industries to optimize operations, enhance customer experiences, and develop new products. This has led to increased need for strong server infrastructure to support these advanced algorithms and applications increases. This changing landscape creates a competitive market, driving constant innovation and growth in the industry. 
 

For instance, in November 2023, KX introduced KDB.AI Server Edition, a high-performance, scalable vector database tailored for time-oriented generative AI and contextual search. It is easily deployable via Docker in various environments, including cloud, on-premises, and hybrid systems. This enables businesses to swiftly harness their AI capabilities with streamlined setup processes, facilitating quick adoption and utilization. This release strengthens the AI server market by presenting an appealing, high-performance choice, addressing the changing needs of tech-savvy consumers.
 

Furthermore, rising investments in AI research are boosting the AI server market by driving innovations and expanding AI capabilities. Businesses, governments, and academic institutions are investing in AI research, leading to advancements in algorithms, models, and applications. For instance, in May 2024, The Wharton School of the University of Pennsylvania announced a major investment to expand its research and teaching in artificial intelligence (AI) and data science. The new investment will enhance the curriculum, support new research, and offer open-source resources to guide the development of generative AI. This increases the demand for advanced AI server infrastructure.
 

The AI server market is growing quickly but faces challenges due to high costs for infrastructure, hardware, software, and maintenance. However, these investments ensure top performance and reliability, offering long-term benefits for organizations. Despite the initial costs, AI servers help businesses improve operations, drive innovation, and stay competitive in the fast-changing tech world. Furthermore, integrating AI servers with existing IT infrastructure, including legacy systems, can be complex and time-consuming. Compatibility issues between new AI servers and older systems may require high customization and testing.
 

AI Server Market Trends

The growing demand for specialized AI hardware, including GPUs and TPUs, is driving the AI server industry. These components provide high performance for complex computations in AI tasks. As organizations invest in advanced AI applications, the need for hardware designed for these workloads increases. This trend is boosting the adoption of AI servers with GPUs and TPUs to meet the needs of modern AI solutions.
 

For instance, in January 2024, NVIDIA unveiled the GeForce RTX™ 40 SUPER Series GPUs, such as the RTX 4070 SUPER, GeForce RTX 4080 SUPER, and RTX 4070 Ti SUPER, enhancing gaming experiences and fueling AI-powered PCs. These GPUs, built on the Ada Lovelace architecture, offer up to 52 shader TFLOPS, 836 AI TOPS, and 121 RT TFLOPS, empowering gaming, content creation, and innovation. These launches of advanced components with premium features strengthens the market, making it more attractive and offering more options for consumers.
 

Furthermore, edge AI solutions are changing the AI server market by allowing real-time data processing at the source. This removes the need for central processing and reduces delays. These solutions use lightweight AI models and algorithms on edge devices like sensors, cameras, and IoT devices. This enables quick analysis and decision-making at the network's edge. Processing data locally also reduces bandwidth use and improves privacy by keeping sensitive information from being sent to central servers.
 

AI Server Market Analysis

Based on servers, the market is divided into AI data server, AI training server, AI inference server and others. The AI training server segment accounted for a market share of over 36% in 2023 and is projected to grow over USD 55 billion by 2032. These servers are built to handle the heavy computational needs of training complex machine learning models. With scalable designs and optimized hardware, AI training servers help organizations accelerate model development and innovation.
 

As the demand for advanced AI solutions grows, AI training servers are becoming more important, leading to significant market dominance. Furthermore, growing investment in AI research and development is boosting the demand for AI training servers as researchers require powerful computational resources to test new algorithms and models.
 

Based on the hardware, the AI server market is categorized into GPU, ASIC, FPGA, CPU and others. The GPU segment holds a market share of around 51% in 2023. The growth of the segment can be attributed to their powerful processing capabilities, which are ideal for tasks like deep learning and neural network training. With thousands of cores, GPUs speed up complex computations, allowing for quick model iterations and better performance.
 

As AI applications spread across industries, the demand for GPU is rising. Their ability to handle large datasets and deliver high speed makes them the preferred choice for advanced AI development and deployment. Furthermore, the design and manufacture of PCBs have evolved to support the integration of complex GPU layouts and high-speed signaling required for AI workloads. AI server providers are leveraging advanced PCB technologies to optimize performance and reliability while accommodating dense configurations of GPUs.
 

North America AI server market accounted for 32% of the revenue share in 2023. Organizations in North America are increasingly using AI in technology, finance, and healthcare for data analysis, pattern recognition, and decision-making. Collaborations among AI server manufacturers, software developers, and solution providers are delivering integrated AI solutions to customers. 
 

For instance, in May 2023, American multinational front-runners Oracle and Microsoft discussed a deal to rent servers from each other when out of capacity to cater to large-scale AI cloud customers. The proliferation of AI applications and the subsequently growing awareness of security and privacy issues associated with AI data processing will also contribute to regional market growth.
 

The increasing adoption of AI technologies to enhance automation, optimize production processes, and drive efficiency across industries will fuel market growth in Europe. Increasing demand for AI-enabled solutions in the automotive, manufacturing, and healthcare sectors are propelling AI server market expansion in the region. For instance, in August 2023, Quanta Computer approved capacity expansion at its production bases in Germany to meet robust customer demand for AI servers.
 

China's dynamic startup ecosystem is creating many AI-driven companies, all requiring high-performance AI servers to develop and deploy their solutions. For instance, in August 2024, Moonshot, a Chinese generative AI startup raised USD 300 million in a new funding round, led by Tencent Holdings. The new funding round increased the company’s valuation to around USD 3.3 billion. This is expected to drive the growth of the market in the country.
 

AI Server Market Share

Foxconn and Quanta Computer Inc. hold a significant market share of around 40% in the AI server industry in 2023. Foxconn focuses on forming strategic partnerships with major technology companies including cloud providers and AI-focused firms to develop AI server solutions.  These collaborations help the company to make use of modern AI technologies and expand its market reach.
 

Quanta offers customized AI server solutions that cater to specific customer requirements, such as specialized AI workloads, storage needs, and network configurations. This flexibility helps the company differentiate itself in a competitive market. Also, Quanta’s modular server designs allow for easy upgrades and scalability, allowing customers to expand their AI infrastructure when required.
 

AI Server Market Companies

Major players operating in the AI server industry are:

• Foxconn
• Hewlett Packard Enterprise Company
• Intel Corporation
• Inventec Corporation
• MiTAC International Corporation
• Nvidia Corporation
• Quanta Computer Inc.
• Super Micro Computer, Inc.
• Wistron Corporation
• Wiwynn Corporation
   

AI Server Industry News

• In June 2024, Foxconn announced to produce AI servers at its facilities in India. The announcement is in line with the company’s strategy of significant expansion of operations in India and diversification of its manufacturing capabilities.
   
• In December 2023, AMD launched the AMD Instinct MI300X GPU and the AMD Instinct MI300A APU, built for the AI era, serving as pivotal elements within AMD's next-gen GPU/APU/AI accelerator lineup, the Instinct MI300 series. These offerings are based on AMD's latest CDNA 3 architectures, incorporating AMD's renowned Zen 4 cores, with the aspiration of pioneering advancements in both generative AI training and inference as well as high-performance computing (HPC).
   

The AI server market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) and shipments (units) from 2018 - 2032, for the following segments:

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Market, By Servers

• AI data server
• AI training server
• AI inference server
• Others

Market, By Hardware

• GPU
• ASIC
• FPGA
• CPU
• Others

Market, By End User

• IT & telecommunication
• Transportation and automotive
• BFSI
• Retail and ecommerce
• Healthcare and pharmaceutical
• Industrial automation
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
  • Singapore
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA