Worldwide AI Chip Revenue To Surge By 33% In 2024, Gartner Reports

The global AI semiconductor market is on the brink of a significant surge, with revenue expected to hit $71 billion in 2024, marking a 33% increase from the previous year, as per the latest forecasts by Gartner, Inc. This growth is largely fueled by the rising demand for generative AI (GenAI), which necessitates high-performance AI chips in data centres.

Alan Priestley, VP Analyst at Gartner, highlighted the substantial growth anticipated in the AI accelerator market, which is projected to expand from $21 billion in 2024 to $33 billion by 2028. These accelerators, crucial for offloading data processing tasks from microprocessors, are becoming increasingly vital in servers.

The projections also reveal a significant trend in AI PC shipments, expected to account for 22% of total PC shipments in 2024. By the end of 2026, every enterprise PC purchase is forecasted to be an AI PC, incorporating neural processing units (NPUs) for enhanced performance and efficiency. This shift opens up new avenues for integrating AI into daily tasks and operations.

The period through 2024 is set to witness the peak growth rate in AI semiconductor revenue, sustaining double-digit growth throughout. Gartner's forecast outlines the revenue trajectory from 2023 through 2025, demonstrating a clear upward trend.

Source: Gartner (May 2024)

Diverse Applications Driving Revenue

In 2024, the AI chips revenue from compute electronics is poised to reach $33.4 billion, accounting for a significant 47% of the total AI semiconductor revenue. The automotive and consumer electronics sectors are also expected to contribute, with projections of $7.1 billion and $1.8 billion, respectively, in AI chips revenue.

Competition among Semiconductor Vendors and Tech Giants

The landscape is becoming increasingly competitive as tech giants such as AWS, Google, Meta, and Microsoft invest in developing their own AI-optimized chips. Despite the high costs associated with chip development, these custom-designed chips are expected to offer improved operational efficiencies and lower costs for both the delivery and access of AI-based services. Priestley notes, "As the market shifts from development to deployment we expect to see this trend continue."

Gartner for High Tech provides tech leaders and their teams with essential insights and strategic views on emerging trends, equipping them to navigate the rapidly evolving high-tech industry. For further information, Gartner's detailed reports on the AI semiconductor forecast and market analysis are available to clients.

The AI semiconductor landscape is clearly at a turning point, with rapid advancements and investments indicating a future where AI integration becomes a standard across various sectors. The focus now shifts from mere development to the widespread deployment of AI capabilities, heralding a new era in technological integration and efficiency.