The growth trajectory of artificial intelligence (AI) enterprise applications continues to accelerate, and its impact on global IT infrastructure spending is also remarkable.
The recent market study by International Data Corporation (IDC) provides compelling evidence of AI's explosive growth and implications for the Global Networked Economy.
By 2028, global investment in AI infrastructure is projected to surpass the $100 billion mark, underscoring the technology's pivotal role in shaping the future of business and society.
Artificial Intelligence Infrastructure Market Development
This growth is not a sudden phenomenon but rather the result of sustained investment over time. The AI infrastructure market has experienced double-digit growth for nine consecutive half-years, with no signs of slowing down.
In the first half of 2024 alone, organizations increased their spending on compute and storage hardware infrastructure for AI deployments by 37 percent year-over-year, reaching an impressive $31.8 billion.
Current state and future direction of AI infrastructure:
- Servers account for 89 percent of total AI infrastructure spending, growing 37 percent compared to the previous year. This emphasizes the critical role of GPU power for AI apps.
- Sixty-five percent of total server spending for AI is deployed in cloud and shared environments. This trend reflects the scalability and flexibility offered by cloud solutions for AI workloads.
- Servers with embedded accelerators are the preferred infrastructure for AI platforms, accounting for 58 percent of total server AI infrastructure spending. This category saw 63 percent growth in the first half of 2024.
- Storage spending for AI infrastructure grew by 36 percent year-over-year in the first half of 2024, driven by the need to manage large datasets for AI model training and inference.
- The United States leads the global AI infrastructure market, accounting for almost half of the total spending -- followed by China market (23 percent), Asia Pacific and Japan market (16 percent), Europe, Middle East, and Africa market (10 percent).
1. By 2028, servers deployed in cloud environments are expected to represent 75 percent of the total AI infrastructure market. This trend underscores the growing importance of cloud-based AI solutions and the potential for cloud service providers to capitalize on this shift.
2. Accelerated servers will exceed 60 percent of server AI infrastructure spending by 2028, growing at a 19 percent 5-year CAGR. This presents significant opportunities for hardware manufacturers specializing in AI-optimized processors and accelerators.
3. The Asia Pacific and Japan region is expected to grow at the fastest CAGR (20 percent) over the next five years, followed by the USA (16 percent), Europe, Middle East, and Africa (13 percent), and China (11 percent). This suggests a potential for market expansion and investment in emerging AI hubs across these regions.
4. As AI adoption continues to grow, concerns around energy consumption will become increasingly important. This trend will likely drive innovation in energy-efficient AI hardware and data center designs, creating opportunities for companies that can deliver high-performance, low-power AI solutions.
5. While hyperscalers and cloud service providers currently lead in AI infrastructure investment, there's significant potential for growth in traditional enterprise adoption of on-premises AI infrastructure.
Outlook for AI Infrastructure Investment Opportunities
The burgeoning AI infrastructure market presents numerous opportunities. From developing energy-efficient AI hardware to providing specialized AI cloud services or creating industry-specific AI solutions, the potential for growth and innovation is vast.
However, success in this rapidly evolving marketplace will require a deep understanding of AI technologies, market trends, and the specific needs of different industries and regions.
"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, group vice president at IDC.
That said, I believe the next five years will be crucial in shaping the future of AI infrastructure and its impact on global commerce. Those savvy leaders who can provide innovative, efficient, and scalable AI solutions will be well-positioned to thrive in the emerging AI-driven future.