USD 13.3 Billion
Artificial Intelligence (AI) Hardware Market Size, Share, Growth Analysis, By Product(Sound processor, Vision processor, Embedded sound processing unit, Embedded vision processing unit), By Hardware Type(Processors (CPUs, GPUs, TPUs, FPGAs)), By Application(Machine Learning, Deep Learning, Computer Vision, Natural Language Processing), By End-User(BFSI, IT & Telecommunication, Retail, Manufacturing), By Region - Industry Forecast 2025-2032
Report ID:
SQMIG45I2192 |
Region:
Global |
Published Date: June, 2024
Pages:
197
|Tables:
131
|Figures:
77
Artificial Intelligence (AI) Hardware Market Insights
Artificial Intelligence (AI) Hardware Market size was valued at USD 23.5 Billion in 2023 and is poised to grow from USD 27.14 Billion in 2024 to USD 98.06 Billion by 2032, growing at a CAGR of 15.5% during the forecast period (2025-2032).
Hardware specifically designed and developed for artificial intelligence technology use is known as artificial intelligence (AI) hardware. Growing adoption of AI around the world and high investments in the development of specific AI hardware is projected to primarily drive market growth over the coming years. Surging demand for better processing and computational power to handle advanced AI algorithms will also push AI hardware manufacturers to innovate. Rising use of AI models and products across multiple industry verticals and advancements in semiconductor technologies will also create new opportunities for artificial intelligence (AI) hardware providers going forward. Development of custom AI chips and energy efficient AI hardware will be the prime focus of almost all artificial intelligence (AI) hardware companies in the long run. However, heat management, high costs of development, and complexity in integration are estimated to be the key factors slowing down artificial intelligence (AI) hardware market growth prospects in the future.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Processors
Fastest Growth
Memory
Growth Rate
15.5% CAGR
Global Artificial Intelligence (AI) Hardware Market ($ Bn)
Country Share for North America Region (%)
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Artificial Intelligence (AI) Hardware Market Segmental Analysis
Global artificial intelligence in the hardware market is segmented into product, hardware type, application, end-user, and region. By product, it is segmented sound processor, vision processor, embedded sound processing unit, embedded vision processing unit. By hardware type, it is segmented into processors (CPUs, GPUs, TPUs, FPGAs), memory (DRAM, SRAM, NVM), storage (HDDs, SSDs), networking (Network interface cards, switches). By application, the market is segmented into machine learning, deep learning, computer vision, natural language processing, and others. By end user, the market is segmented into BFSI, IT & telecommunication, retail, manufacturing, healthcare, and others. By region, the market is segmented into North America, Asia Pacific, Europe, Latin America, and MEA.
Analysis by End User
The IT and telecommunications industry is projected to be the key end-user of AI hardware owing to the rapid deployment of artificial intelligence solutions and services in this segment. AI is enhancing IT and telecom operations in ways no one ever imagined, and this is what helps this segment dominate the global market. AI hardware is quintessential for AI adoption in IT & telecommunications industry, which is why most AI hardware providers are focusing on developing products targeted towards this segment.
On the other hand, the rapid digitization of the BFSI (banking, financial services, and insurance) industry is projected to make it the fastest-expanding segment in the market. The growing use of AI to manage risk and compliance in the BFSI industry to reduce fraud is projected to primarily augment artificial intelligence (AI) hardware demand in this industry. Moreover, the increasing use of AI chatbots for customer service will also promote artificial intelligence (AI) hardware demand in this segment going forward.
Analysis by Hardware Type
Processors are estimated to account for a high share of the global artificial intelligence (AI) hardware market. The growing complexity of AI algorithms and the need for more computational power by AI applications calls for advanced processors. AI hardware manufacturers are constantly focusing on utilizing new architecture and technologies to improve the capabilities of AI processors. CPUs, GPUs, ASICs, and TPUs are the key types of processors that are popular and in demand in the global artificial intelligence (AI) hardware market.
Meanwhile, the growing need for AI models to interact with each other to enhance their machine-machine collaboration capabilities will boost the demand for network AI hardware. This segment is slated to emerge as the fastest growing one as the integration of AI and 5G technology takes center stage around the world. Network hardware will also play a vital role in transferring huge volumes of data generated or required by AI models over cloud platforms.
Global Artificial Intelligence (AI) Hardware Market By Hardware Type
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Artificial Intelligence (AI) Hardware Market Regional Insights
The presence of AI hardware giants such as Nvidia, Intel, and AMD in North America allows it to hold a dominant stance. Rapid adoption of AI across multiple industry verticals and high investments in the R&D of novel AI hardware solutions will also help bolster the dominance of North America. An increasing number of start-ups focusing on AI hardware development will also provide new opportunities for artificial intelligence (AI) hardware companies in this region. Canada and the United States are estimated to be the leading countries in North America across the study period.
The presence of a strong semiconductor and electronics manufacturing industry in the Asia Pacific region allows it to become the fastest-expanding regional market. Japan and China are estimated to be at the forefront when it comes to AI hardware innovation in the Asia Pacific region. Supportive government initiatives to promote AI adoption and boost economic growth will also attract AI hardware companies to this region. Rising use of AI hardware in multiple industry verticals will also create new opportunities for artificial intelligence (AI) hardware companies operating in this region.
Global Artificial Intelligence (AI) Hardware Market By Region
- Largest
- Fastest
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Artificial Intelligence (AI) Hardware Market Dynamics
Drivers
Growing Complexity of AI Algorithms
- As AI technology advances, its algorithms are becoming more and more complex, demanding more computational power. Hardware made specifically to handle such complex AI processing will be high in demand as AI adoption surges in the future and this will primarily drive market growth as well.
Adoption of Edge Computing
- Rising use of connected devices around the world has resulted in rising popularity and adoption of edge computing. Growing deployment of AI algorithms in edge environments to power connected devices will also create new opportunities for artificial intelligence (AI) hardware companies going forward.
Restraints
Heat and Power Management
- Hardware running complex computations and processes such as AI algorithms tend to get quite hot and managing heat in AI hardware is a tricky subject that is not yet tackled quite effectively by companies. More heat also results in more power consumption either to keep it cool or keep it operational. This is why managing heat and power consumption is a key challenge for artificial intelligence (AI) hardware manufacturers.
Technical Complexity in Development and Integration
- Artificial intelligence hardware is highly complex, and this is why developing it is quite a task for market players. Requirement of expensive equipment and resources to develop AI hardware impedes market growth. Integration of AI hardware with existing systems or infrastructure is also expected to slow down market development in the future.
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Artificial Intelligence (AI) Hardware Market Competitive Landscape
Currently, the global artificial intelligence (AI) hardware market is highly saturated with Nvidia accounting for more than 80% share and the rest of 20% taken by other leading chip manufacturers. New companies have a shot at penetrating the market if they raise good capital for the R&D of novel AI hardware components. From AI robots to simple AI chatbots, all AI-powered applications and devices will utilize hardware in some form, which is why companies need to diversify their product portfolio. Innovation will be the key differentiating factor for all artificial intelligence (AI) hardware companies.
Top Player’s Company Profiles
- NVIDIA (US)
- Intel (US)
- IBM Corporation (US)
- Qualcomm Technologies (US)
- AMD (Advanced Micro Devices, Inc.) (US)
- Google LLC (US)
- Apple Inc. (US)
- Microsoft Corporation (US)
- Amazon Web Services, Inc. (AWS) (US)
- Xilinx, Inc. (now part of AMD) (US)
- ARM Holdings plc (UK)
- Graphcore (UK)
- Cerebras Systems (US)
- Huawei Technologies Co., Ltd. (China)
- Baidu, Inc. (China)
- Alibaba Group Holding Limited (China)
- Tencent Holdings Ltd. (China)
- Samsung Electronics Co., Ltd. (South Korea)
- Fujitsu Limited (Japan)
- Mythic Inc. (US)
Recent Developments
- AMD, a renowned semiconductor manufacturer, launched a new AI hardware called MI300 in December 2023. The MI300A is the world’s first 2 Exaflop supercomputers and has 10% to 20% better performance on GROMACS and HPCG than H100.
- At Intel’s AI Everywhere event in December 2023 in New York, it announced the launch of its new AI products and hardware. The new 5th Gen Intel Xeon and Intel Core Ultra were added to the company’s expansive AI hardware portfolio. Allowing it to compete with top AI hardware providers.
- In December 2023, rabbit inc., an AI-focused start-up trying to improve human-machine interface, announced that it had raised USD 10 million in a Series A funding round. The company intended to use the new funds to develop its standalone AI-capable hardware.
Artificial Intelligence (AI) Hardware Key Market Trends
- Energy Efficient Hardware: Artificial intelligence algorithms are highly complex and therefore draw out huge amounts of power from AI hardware. Artificial intelligence (AI) hardware companies should focus on developing new hardware capable of handling complex processing with less power to provide efficiency for users.
Artificial Intelligence (AI) Hardware Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, artificial intelligence (AI) hardware market is projected to be driven by advancements in semiconductor technologies and growing adoption of AI across multiple industries. Growing investments in the R&D of novel AI hardware and high adoption of automation are also slated to bolster market growth over the coming years. On the other hand, high costs of development and technical complexities of AI hardware are slated to be key restraints troubling artificial intelligence (AI) hardware companies around the world. The presence of Nvidia is alone a testament to why North America is an uncontested leader in the global artificial intelligence (AI) hardware market with the United States spearheading regional market growth. New as well as leading artificial intelligence (AI) hardware manufacturers should focus on the development of AI hardware with better energy consumption and heat management capabilities to stay relevant in the long run.
| Report Metric | Details |
|---|---|
| Market size value in Hardware | USD 13.3 Billion |
| Market size value in 2031 | USD 84.9 Billion |
| Growth Rate | 15.5% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Artificial Intelligence (AI) Hardware Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Artificial Intelligence (AI) Hardware Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Artificial Intelligence (AI) Hardware Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Artificial Intelligence (AI) Hardware Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Artificial Intelligence (AI) Hardware Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Artificial Intelligence (AI) Hardware Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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