US leading AI infrastructure market followed by China and Asia-Pacific

Author Moonshot.news

Published on: 19/02/2025

The global Artificial Intelligence infrastructure market is on track for unprecedented growth and will surpass $200 billion USD in spending by 2028, according to a forecast from the International Data Corporation (IDC). The US leads the global AI infrastructure market, accounting for 59% of the total spending in the first half of 2024 followed by China (20%), Asia-Pacific (13%), and Europe, Middle East and Africa (EMEA) (7%). 

Over the next five years, IDC expects China to grow at the fastest CAGR (35%) followed by the USA (34%), Asia-Pacific (21.3%) and EMEA (20.9%). By 2028, AI infrastructure spending will reach $223 billion with servers deployed in cloud environments at 82% of the market total and accelerated servers around 74% of the total market spending.

Lidice Fernandez, Group Vice President, says AI adoption will 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 data centers looking for alternatives to optimise their architectures and minimise energy use.”

Organisations increased spending on compute and storage hardware infrastructure for AI deployments by 97% year-over-year in the first half of 2024, reaching $47.4 billion, the report shows.

“The AI infrastructure market has sustained double-digit since 2019, driven primarily by investment in servers for AI deployments. In 1H24, servers accounted for 95% of the total spending, growing 105% compared to the same period last year.” 

“AI Infrastructure deployed in cloud and shared environments accounts for 72% of the total server spending in AI in 1H24, 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.”

“Servers with an embedded accelerator are the preferred infrastructure for AI platforms, accounting for 70% of the total server AI infrastructure spending — growing 178% in the first half of the year 2024. IDC projects that accelerated servers will exceed 75% of the server AI infrastructure spending by 2028, growing at a 42% 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 an 18% year-over-year growth rate in 1H24 with 40% of the spending coming from cloud deployments.”

The US is leading the global AI infrastructure market with EMEA rather much further down, according to the IDC report. The EU Commission recently announced that  European deep tech research and start-ups will be supported by €1.4 billion next year via the European Innovation Council. The decision came after former EU central bank leader Mario Draghi in a report stressed the need for investments to secure EU growth. 

The Commission itself, in a recent analysis said that EU’s tech development is too slow and not on track to achieve the digital objectives and targets for 2030 set in the Digital Policy Programme.

The now adopted EIC Work Programme 2025 includes an increase of nearly €200 million in comparison with 2024, according to the Commission.

Draghi said that the EU needs to focus on three crucial issues: closing the innovation gap with the US and China; developing a joint plan to link the goal of decarbonisation with increased competitiveness; and boosting Europe’s security and reducing its dependence on foreign economic powers.

The Commission in its earlier analysis said that additional European investments are needed especially for digital skills, high-quality connectivity, uptake of AI, semiconductor production and start-up ecosystems.