Global AI Hardware Market Set to Exceed $84.9 Billion by 2031
Artificial intelligence (AI) hardware is designed specifically for AI-based applications. According to Skyquest, the global AI hardware market was valued at $13.3 billion in 2022 and is expected to grow to $84.9 billion by 2031, growing at a CAGR of 15.5%.
Key Market Overview:
- Market Revenue in 2023: $23.5 billion
- Estimated Value by 2031: $84.9 billion
- Growth Rate: Poised to grow at a CAGR of 15.5%
- Forecast Period: 2024–2031
- Report Coverage: Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
- Segments Covered: Product, Hardware Type, Application, and End User
- Geographies Covered: North America, Europe, Asia Pacific, Middle East & Africa, Latin America
- Key Market Opportunities: Expansion of AI applications in different industry verticals
- Key Market Drivers: Advancements in hardware technology
Segments Covered in the AI Hardware Market:
Product:
- Sound processor, Vision processor, Embedded sound processing unit, Embedded vision processing unit
Hardware Type:
- Processors (CPUs, GPUs, TPUs, FPGAs), Memory (DRAM, SRAM, NVM), Storage (HDDs, SSDs), Networking (Network interface cards, switches)
Application:
- Machine Learning, Deep Learning, Computer Vision, Natural Language Processing, Others
End-User:
- BFSI, IT & Telecommunication, Retail, Manufacturing, Healthcare, Others
AI Systems Powerless Without the Power of Processors
Processors are crucial for AI operations. CPUs, GPUs, ASICs, and TPUs are key processors used for complex AI algorithms. High investments in research and development of new processors will help this segment hold a significant market share. The demand for AI network hardware is forecasted to increase, driven by the need for communication and data exchange between AI models. The generation of high volumes of data will also bolster the demand for AI storage hardware.
Rising Use of AI Across Multiple End User Verticals
The IT and telecommunications industry is projected to be a key end-user of AI hardware due to the rapid deployment of AI solutions. From cybersecurity to software development, almost all aspects of the IT industry are set to adopt AI, thus driving the demand for AI hardware. The banking, financial services, and insurance (BFSI) sector is another lucrative segment for AI hardware providers, thanks to AI solutions improving security and increasing digitization in the BFSI sector.
Agriculture, robotics, and healthcare are other significant end-user segments where the demand for AI hardware is expected to rise. Rapid digitization of the healthcare industry and the use of advanced robotics technology are creating new opportunities for AI hardware providers globally.
Machine Learning to Spearhead AI Hardware Demand Outlook
Most AI hardware will be utilized for machine learning technology as it is used to train and power multiple AI models. The development of advanced machine learning algorithms and the demand for faster training for AI models will increase the need for advanced AI hardware. The complexity of machine learning algorithms and the need for more processing power will create new opportunities for AI hardware companies.
Machine vision is another technology that will drive AI hardware demand, especially with its growing use in robotics.
Endless Opportunities for AI Hardware Businesses
The prospects for AI hardware companies are vast as AI adoption is still emerging. Growing investments in developing novel hardware technology with better processing power will enable AI hardware companies to generate revenue from various market segments.
