AI chip sales predicted to jump by a third this year - then cool off

Gartner is predicting a 33 percent rise in revenue generated by AI chip sales in 2024 versus 2023.

The analyst house today said AI processor sales will reach just above $71 billion, compared to the $53.6 billion sold last year. Additionally, Gartner predicts this revenue will increase further by 29 percent to nearly $92 billion in 2025.

So that's a slowing growth, then, eh? Up 33 percent this year, then up 29 percent next year.

By AI chips, Gartner seems to mean any processor or accelerator that's specifically capable of speeding up machine-learning tasks in hardware, be that a datacenter accelerator, or an AI PC processor, or something in a car, and so on.

Speaking of which, this growth for AI chips is driven in part by datacenters. $21 billion of that estimated $71 billion in AI semiconductor revenue is derived from datacenter products alone, according to Gartner's stats. Chief among these server-grade parts are Nvidia's Hopper and the forthcoming Blackwell GPUs, and competing GPUs and other processors from suppliers including AMD, Intel, and others will undoubtedly contribute to the total as well.

"Today, generative AI (GenAI) is fueling demand for high-performance AI chips in data centers. In 2024, the value of AI accelerators used in servers, which offload data processing from microprocessors, will total $21 billion, and increase to $33 billion by 2028," Gartner VP analyst Alan Priestly said.

Additionally, Gartner says $33.4 billion, or nearly half of 2024's AI chip revenue, will come from AI PCs, cars, and other general computer devices. Interestingly, consumer electronics with AI will only generate $1.8 billion, according to Gartner. It posits the AI PC will only represent 22 percent of all personal computer shipments this year. Automotive applications are in fact far more lucrative, with a predicted $7.1 billion of revenue.

However, the notorious AI PC is set to play a significant role in rising revenue beyond 2024, as Gartner projects that every single enterprise PC sold in 2026 will be an AI PC. This implies a very fast rate of adoption among business users despite there being some hesitation today over whether more expensive AI PCs would actually be worth it.

AI PCs are hoped to spark growth in the desktop market, driven by the latest chips from Intel, AMD, and now Qualcomm with its Snapdragon X Elite. Even before the launch of new Arm chips for Windows, the advent of the AI PC has apparently already resulted in a positive Q1 for the industry. Though, this all hinges on users believing that AI PCs are worth buying. ®

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