The global IT server market is undergoing a transformation, fueled by the insatiable demand for cloud computing and artificial intelligence (AI) infrastructure.
As organizations across industries race to harness the power of advanced AI models, the underlying hardware ecosystem is experiencing unprecedented growth and innovation.
The latest worldwide IDC market study offers a compelling view, revealing record-breaking numbers and the strategic technology shifts shaping the future of enterprise computing.
Cloud Server Market Development
The most striking statistic from IDC’s 2025 analysis is the sheer scale and velocity of market expansion. The worldwide server market is projected to reach $366 billion in 2025, representing a 44.6 percent increase over 2024.
This surge is not a one-off anomaly; it is the culmination of several quarters of explosive growth, with the first quarter of 2025 alone recording $95.2 billion in server sales --that's up 134.1 percent year-over-year (YoY).
Key Market Segments and Regional Dynamics
- x86 Servers: Still the backbone of enterprise IT, the x86 segment is expected to grow by 39.9 percent in 2025, reaching $283.9 billion.
- Non-x86 Servers: These are growing even faster, with a 63.7 percent YoY increase to $82 billion. ARM-based server shipments will rise 70 percent.
- GPU-Accelerated Servers: Embedded GPUs are forecast to expand by 46.7 percent YoY, making up nearly half of the total market value in 2025.
Regionally, the United States leads the charge, accounting for nearly 62 percent of total revenue and growing at 59.7 percent year-over-year.
China follows with 39.5 percent growth and over 21 percent of global revenue. Other regions, such as Japan and the broader Asia-Pacific excluding Japan and China (APeJC), are also seeing double-digit growth, while EMEA and Latin America lag with single-digit increases.
Across the globe, the driving force behind this IT server market renaissance is the explosive demand for AI infrastructure. Hyperscalers and cloud service providers are investing at historic levels to support the next generation of AI workloads.
Hyperscaler and Cloud Provider Investment
- The three largest cloud providers—AWS, Microsoft, and Google Cloud—collectively invested over $62 billion in capital expenditures in the first quarter of 2025 alone, primarily to expand data center capacity for AI workloads.
- Over 70 percent of AI-optimized server spending in 2025 will come from hyperscale operators, with AI infrastructure investment expected to reach $202 billion, double that of traditional server hardware.
ARM, GPUs, and Rack-Scale AI Innovation
The market’s growth is not just about more servers—it’s about smarter, more specialized infrastructure:
- ARM-Based Servers: Once a niche, ARM platforms are now mainstream in AI data centers, thanks to large rack-scale deployments like Nvidia’s GB200 NVL72, which combine ARM CPUs with high-performance GPUs for AI training and inference at scale.
- GPU Acceleration: The proliferation of GPU-powered servers is enabling breakthroughs in model training and inferencing, supporting the shift from narrow AI to more general, reasoning-based systems.
- Rack-Scale and Custom Accelerators: Hyperscalers are increasingly deploying custom accelerators (FPGAs, ASICs) and rack-scale architectures to optimize for specific AI workloads, further driving demand for advanced server systems.
As AI models grow in size and sophistication, the need for high-density, energy-efficient compute infrastructure will only intensify. The industry’s focus is shifting toward more efficient models that can scale in multi-user environments, supporting the computational demands of artificial general intelligence (AGI).
With data center energy consumption under scrutiny, innovations in cooling (e.g., liquid-cooled GPU servers) and power management will become critical differentiators.
While the U.S. and China dominate today, emerging markets in Asia-Pacific and Europe are poised for accelerated growth as AI adoption spreads and local cloud providers scale up their infrastructure.
Furthermore, the competitive landscape is evolving, with traditional IT server vendors, chipmakers, and cloud giants all vying for leadership in the AI infrastructure race.
Outlook for a New IT Infrastructure Era
The 2025 server market is not just breaking records—it is laying the foundation for the next era of enterprise digital transformation. The convergence of AI, cloud, and advanced hardware architectures is creating unprecedented opportunities for innovation, efficiency, and growth.
"The evolution from simple chatbots to reasoning models to agentic AI will require several orders of magnitude more processing capacity, especially for inferencing," said Kuba Stolarski, research vice president at IDC.
For technology leaders, vendor investors, and government policymakers, I believe the message is clear: the demand for AI infrastructure is a structural shift that will define the business technology sector for many years to come.