Unprecedented growth forecasted for AI infrastructure market
Trust in the potential of AI is strong despite that investors are getting impatient wanting proof of AI’s profitability. “The global AI infrastructure market is on track for unprecedented growth, poised to surpass $100 billion USD in spending by 2028”, according to a new forecast by the International Data Corporation (IDC). Organisations increased spending on compute and storage hardware infrastructure for AI deployments by 37% year-over-year in the first half of 2024, reaching $31.8 billion.
“IDC expects AI adoption to continue growing at a remarkable pace as hyperscalers, communication service providers, private companies, and governments around the world are increasingly prioritising AI. Growing concerns around energy consumption for AI infrastructure will become a factor in datacenters looking for alternatives to optimise their architectures and minimize energy use” says Lidice Fernandez , Group Vice President.
The United States leads the global AI infrastructure market, accounting for almost half of the total spending in the first half of 2024, followed by China (23%), Asia Pacific (16%), and EMEA(10%). Over the next five years, IDC expects the Asia Pacific region to grow at the fastest compounded annual growth rate (20%) followed by the USA (16%), EMEA (13%) and China (11%).
By 2028, IDC forecast AI Infrastructure spending to reach $107 billion with servers deployed in cloud environments at 75% of the market total and accelerated servers around 56% of the total market spending.
“The AI infrastructure market has sustained double-digit growth for nine consecutive half-years, driven primarily by investment in servers for AI deployments. In the first half of 2024, servers accounted for 89% of the total spending, growing 37% compared to the same period last year.”
“AI Infrastructure deployed in cloud and shared environments accounts for 65% of the total server spending in AI in the first half of 2024, as hyperscalers, cloud service providers and digital service providers expand their infrastructure capabilities.”
“Traditional enterprises, by contrast, have largely lagged behind in adopting on-premises AI infrastructure.”
The report says that servers with an embedded accelerator are the preferred infrastructure for AI platforms accounting for 58% of the total server AI infrastructure spending — growing 63% in the first half of the year 2024.
IDC projects that accelerated servers will exceed 60% of the server AI infrastructure spending by 2028, growing at a 19% 5-year CAGR rate.
Storage spending in AI infrastructure has been driven by the need to manage large datasets required for training AI models, as well as storage of training, checkpoints and repositories of data for inference phases. This category reported a 36% year-over-year growth rate in the first half of 2024 with 56% of the spending coming from cloud deployments.
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