AI infrastructure market is facing a blockbuster boom—and pressures
The infrastructure needed to support artificial intelligence is expecting an across-the-board boom, as companies invest in chips, servers, data centers, fiber connectivity and more to enable more widespread adoption and use of AI.
The question is, how big will that AI infrastructure boom be? We rounded up some of the most recent predictions from analyst firms on the size and growth rate of the AI infrastructure market. Here are five of them.
–IDC released new numbers this week on the global AI infrastructure market, saying that it is “on track for unprecedented growth” and forecasting that spending will surpass $200 billion by 2028. The sector has seen double-digit annual growth since 2019, according to IDC, and in the first half of 2024, spending on compute and storage hardware infrastructure for AI deployments was up by 97% year-over-year to $47.4 billion.
Servers drive the largest portion of that infrastructure spend, accounting for 95% of the total spending in the first half of last year; servers with AI accelerators grew 178% during that period, and IDC expects that those servers will account for more than 75% of server AI infrastructure spending by 2028.
The U.S. is at the forefront of the global AI infrastructure market, IDC said, according for nearly 60% of the total spend in the first half of last year.
“IDC expects AI adoption to continue growing at a remarkable pace as hyperscalers, CSPs, private companies, and governments around the world are increasingly prioritizing AI. Growing concerns around energy consumption for AI infrastructure will become a factor in data centers looking for alternatives to optimize their architectures and minimize energy use” said Lidice Fernandez, who is group VP for IDC’s Worldwide Enterprise Infrastructure Trackers.
–Dell’Oro Group predicts that worldwide data center capital expenditures—driven by AI—will surpass $1 trillion by 2029. “AI infrastructure spending will maintain its strong growth momentum despite ongoing sustainability efforts,” the analyst firm said.
“We project that data center infrastructure spending could surpass $1 trillion annually within five years. While AI spending has yet to meet desired returns and efficiency improvements, long-term growth remains assured, driven by hyperscalers’ multi-year capex cycles and government initiatives such as the $500 billion Stargate Project,” said Baron Fung, senior research director at Dell’Oro Group.
“Although recent advancements in AI model training efficiency from DeepSeek have been disruptive, innovations have been in progress for some time to drive greater efficiencies and lower the total cost of ownership in building and operating AI data centers. Key areas of focus include advancements in accelerated computing through GPUs and custom accelerators, [large language model] optimizations, and next-generation rack-scale and network infrastructure—all crucial to enabling sustainable growth from both a cost and power perspective,” Fung added.
–Fortune Business Insights has put out numbers estimating the global AI infrastructure market at $36.35 billion in 2023 and $46.15 billion in 2024, and is anticipating that it will reach $360.59 billion by 2032, reflecting a CAGR of more than 29%.
Hardware accounts for the largest portion of the market in terms of revenues. As far as what the AI infrastructure is being used for, the machine learning segment has dominated thus far, but SNS said that deep learning “is anticipated to develop swiftly from 2024 through 2032, chiefly in healthcare, automotive, and finance, with North America and Asia-Pacific guiding investments.”
What are the barriers that the firm sees which may hinder growth in AI infrastructure? Integration with existing IT systems and processes, or upgrades to legacy systems so that modern AI can be leveraged across those systems; and data protection issues including security and privacy.
–Grand View Research estimated that the global AI infrastructure market hit $35.62 billion in 2023 and will see a CAGR of more than 30% through 2030. “The growing need for high-performance computing power to process large datasets for AI training and inference, increasing adoption of cloud-based AI platforms, and rising demand for AI-powered solutions in various sectors such as healthcare, manufacturing, and finance are driving the market growth,” the company concluded. It also added that “AI infrastructure has seen rapid growth since the introduction of 5G technology; as cloud computing requires high-speed data transfers, faster and more stable connectivity is necessary to process and transfer the data.”
Grand View also holds that the services segment related to AI infrastructure will see “significant” growth over the coming years, due to increasing needs for customized AI solutions and the integration of those solutions with existing systems. “With the rapid pace of AI advancements, maintaining an in-house team of AI experts becomes costly for the organization,” the firm noted.
Grand View also estimated that the use of AI infrastructure for model training is dominating the market at present, but that inference—and edge computing related to inference—will see long-term growth.
-A Precedence Research report estimates that the global AI infrastructure market will be about $60 billion this year and see a compound annual growth rate of 26.6% through 2034, at which point it will be just shy of $500 billion. The North American market is growing slightly faster than the global rate at 26.75%, the firm added, and accounted for $19.36 billion last year.
“An increasing amount of strong artificial intelligence infrastructure is needed … as companies in a variety of industries realize how AI can boost productivity, creativity, and competitive advantage,” according to a report summary.
Read more RCR Wireless News coverage of artificial intelligence and its impact on networks.
