AI in Hardware Global Market Report 2024

The AI in hardware market size has grown exponentially in recent years. It will grow from $20.88 billion in 2023 to $25.96 billion in 2024 at a compound annual growth rate (CAGR) of 24.3%. The expansion observed during the historical period can be attributed to robust economic growth experienced in emerging markets, a notable increase in smartphone penetration, and a surge in the adoption of AI hardware within the banking, IT, and telecommunications sectors.

The AI in hardware market size is expected to see exponential growth in the next few years. It will grow to $58.61 billion in 2028 at a compound annual growth rate (CAGR) of 22.6%. The projected growth in the forecast period is anticipated to stem from rapid urbanization, a heightened penetration of the internet, the rise of smart cities, an escalating demand for autonomous vehicles, and an increasing need for cloud computing services. Key trends expected in this period encompass rapid urbanization, further penetration of the internet, the continued development of smart cities, a rising demand for autonomous vehicles, and an increased need for cloud computing services.

The AI in hardware market is poised for growth, driven by the widespread adoption of AI hardware in the banking, IT, and telecom sectors. These industries, experiencing notable expansion, are increasingly incorporating AI technologies to optimize operations, enhance customer experiences, and foster innovation. In the banking sector, AI hardware is utilized to bolster fraud detection, risk management, and customer service. IT companies leverage AI hardware to analyze extensive data from connected devices, detecting anomalies and predicting maintenance requirements. Similarly, telecom companies employ AI-enabled hardware to analyze real-time network traffic, swiftly identifying and resolving performance issues. As of January 2022, according to the Government Digital Service, IT and telecom had adopted 29.5% of AI technology, with the highest AI adoption in banking and IT at 52%, and in media and telecoms at 38%. The increasing integration of AI hardware in banking, IT, and telecom is a key driver propelling the growth of the AI in hardware market.

The AI hardware market is expected to experience growth propelled by the expanding reach of the internet. Internet penetration, a measure of the percentage of the population with access to the internet, plays a pivotal role in advancing AI in hardware. It facilitates data access, supports cloud computing, encourages collaboration, enables remote access to AI services, and contributes to the widespread deployment of AI applications across diverse industries. In 2022, 60% of the global population had internet access, as reported by Euromonitor International. Projections indicate a significant increase in the global online penetration rate, reaching 71% by the end of 2027. This anticipated growth suggests an additional billion internet users worldwide within the next five years. Consequently, the rising internet penetration is expected to have a positive impact on the growth of the AI in hardware market during the forecast period.

A prominent trend gaining traction in the AI in hardware market is the surge in technological advancements, with major companies strategically adopting new technologies to fortify their positions. In April 2021, Intel Corporation, a leading US-based semiconductor technology corporation, unveiled the 3rd generation Intel Xeon Scalable processors featuring built-in artificial intelligence (AI) acceleration. This innovative technology, complemented by Intel's extensive portfolio encompassing Ethernet adapters, FPGAs, persistent memory and storage, Intel OptaneTM, optimized software solutions, high-performance computing (HPC), networking, and intelligent edge applications, delivers significant performance and workload enhancements. Notable features include vector neural network instructions (VNNI), accelerating convolutional neural networks, and tensor float 32 (BFLOAT16) support, expediting training and inference in deep learning models. The 3rd generation Intel Xeon Scalable processors, equipped with robust AI acceleration capabilities, are well-suited for applications in AI and machine learning.

Companies in the AI in hardware market are strategically incorporating robotics and artificial intelligence, particularly in manufacturing and industrial automation. AI hardware plays a pivotal role in tasks such as machine vision, quality control, and precision control of robotic arms within these sectors. The growth of manufacturing and industrial automation sectors is driving increased demand for AI processing units and controllers. In May 2023, OSARO, a US-based company specializing in robotics and artificial intelligence, introduced an AI-powered robotic kitting system tailored to meet the demands of the expanding subscription market. This system automates the kitting process, involving the assembly of individual items into kits or packages. OSARO's Robotic Kitting System integrates AI with modular hardware, including grippers, robot arms, and sensors, showcasing the industry's commitment to advancing AI applications in diverse fields.

In June 2023, Databricks, Inc., a US enterprise software company, completed the acquisition of MosaicMLL for $1.3 billion. This acquisition is aimed at enhancing Databricks' generative AI capabilities by integrating MosaicMLL's models, training, and inference capabilities into its enterprise-focused lakehouse platform. MosaicMLL, a US company, specializes in providing complex systems and hardware to facilitate the development and training of large, intricate generative AI models for customers.

Major companies operating in the AI in hardware market report are Qualcomm Technologies, Alphabet Inc., Micron Technology, NVDIA Corporation, Huawei Technologies Co. Ltd. Intel, Apple Inc., IBM, Advanced Micro Devices Inc., Samsung Electronics Co. Ltd., Xilinx, Cambricon Technologies, Graphcore, Kalray, Mipsology, BrainChip Holdings, LightOn, Synetec, Imobisoft, Light IT Global, Webol, Theodo, Digiryte, Innowise Group, Magora, Skyward Digital, GPU-Tech, Elvees NeoTek, Cogito Instruments, Trencadis Corp, Dell Technology Inc., Amazon Web Services, Inc., Open AI, Empiria.AI, NetuxLab, Tellumat, DataProphet, Cortex Logic, JUMO, Xineoh, Clevva.

North America was the largest region in the AI in hardware market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the AI in hardware market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the AI in hardware market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Spain, Canada.

The primary categories of AI in hardware comprise processors, memory networks, and storage systems. A processor, often referred to as a central processing unit (CPU), functions as the electronic core responsible for executing tasks within computers and electronic devices. These AI-equipped hardware solutions span both cloud-based and on-premise deployments, harnessing technologies such as machine learning, computer vision, natural language processing, and expert systems. They find application across various sectors, including but not limited to telecommunications, IT industries, banking and finance, education, e-commerce, navigation, robotics, agriculture, healthcare, and more. These applications serve diverse purposes such as training and simulation, driver monitoring systems, surveillance and security, among others.

The AI in hardware market research report is one of a series of new reports that provides AI in hardware market statistics, including AI in hardware industry global market size, regional shares, competitors with AI in hardware market share, detailed AI in hardware market segments, market trends and opportunities, and any further data you may need to thrive in the AI in hardware industry. This AI in hardware market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The AI in hardware market consists of revenues earned by entities by provide AI in hardware services such as AI-optimized hardware design, AI consulting, AI accelerators, and cloud-based AI services. The market value includes the value of related goods sold by the service provider or included within the service offering. The AI in hardware market also includes sales of AI chips and processors, robotics hardware, graphics processing units (GPUs), AI central processing units (CPUs), tensor processing units (TPUs), and AI processors that are used in providing AI in hardware services. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.