AI Infrastructure Market

Global AI Infrastructure Market Size (2023 to 2028)

The global AI infrastructure market is expected to be worth 24 billion USD in 2023. It is expected to grow at a CAGR of 19.56% during the forecast period and reach a value of 58.63 billion USD by 2028.

Artificial intelligence demand is increasing with the data center resource management dependency on AI. The combination of advanced analytics, self-learning, and automation is used in streamlining the IT infrastructure management that helps in the preparation of the data for analysis. The computational resources like CPUs and GPUs, large storage capacity, and advanced networking infrastructure are adequate performance that comes under the AI infrastructure. The market expansion is fuelled by the increased data traffic, high demand for processing power, and increasing adoption of cloud-based machine learning, the existence of complex data sources and sets. 

Global AI Infrastructure Market Drivers:

For serial computing in data centers to track a series of memory locations where instructions and data are stored, CPUs are used. A processor is used to compute serially by analyzing the instructions and data in the memory address. Computational steps are in sequence and logical in serial computation. In other words, at the data center, a single task is divided into a series of separate instruction sets, which are executed serially by a processor. In AI-based computations where data and instruction sets are large in number, the above can lead to a problem in such centers. Parallel computing is favorable for HPC/supercomputers, wherein parallel computing structure, multiple computer resources are used concurrently to accomplish the instructions. Parallel computing is increasingly used with the growth in AI, data mining, and virtual reality. To handle multiple instructions concurrently in parallel computing, GPUs are suitable due to the parallel architecture with thousands of cores. The AI infrastructure market is expected to accelerate by the growing demand for the parallel computing framework.

The critical element of the AI infrastructure is co-processor chips. The reduction in the size of the processors would reduce the space between the electrons and holes, which creates problems like current leakage and overheating in ICs. These can make the system perform slowly, high-power consumption by ICs, and durability is reduced. The development of a new alternative way for increasing the computational power of chips will fuel the development of the critical element, i.e., Co-processor chips or accelerator. The growing prevalence of the critical element is setting up growth opportunities for the market. 

Global AI Infrastructure Market Restraints:

The major restrain for the AI infrastructure market is the lack of hardware experts and a skilled workforce. A skilled workforce is required for developing, managing, and implementing complex Artificial Intelligence systems. Knowledge about technologies such as cognitive computing, machine learning, deep learning, and image recognition is required for people to deal with AI. The integration of the existing systems with AI technology is the most difficult task that requires well-funded in-house research & development. Experienced professionals in data science are required to develop customized machine learning-based AI processors. 

Impact of COVID-19 on the AI Infrastructure Market:

The AI infrastructure market has had a significant growth rate in the past years, and due to the COVID-19 pandemic outbreak, it is expected to show notable growth in the coming years. Among enterprises, the need for AI is increasing to improve customer needs and raise revenue opportunities. According to the survey by the Australian data and IT services provider, more than half of the respondents are adopting AI and related investments after the pandemic outbreak. Such factors are evidence of the growth in the opportunities for the market during the pandemic period. The surge in investment in technologies using AI by private healthcare and medical sector research activities to fight against the pandemic has driven market growth. However, the impact of the pandemic in each country varied, and deeper impacts on the business, industrial sector, and organizations are not known exactly. 

REPORT COVERAGE:

This research report on the global AI infrastructure market has been segmented and sub-segmented into the following categories.

AI Infrastructure Market - By Offering:

• Hardware
• Software

The hardware segment is expected to have a large market share in the AI infrastructure market. The increase in the use of AI in diverse applications of machine learning, robotic process automation, and biometrics would raise the demand. From manufacturing industries to the financial service sector industries, health care and others are being transformed by AI and advances in hardware technologies that are driving the market worldwide. The advantage of AI in improving workflow, efficiency, low expenses, and many applications in the service sector contributes to the high growth rate in the market. Often, companies are creating new opportunities for AI, and its adoption is becoming a key factor for the AI infrastructure market growth.

AI Infrastructure Market - By Deployment:

• On-premise
• Cloud

A significant market share in the AI infrastructure is held by the hybrid segment. The movement from SMEs to major corporations’ businesses is demanding hybrid integration solutions that have a combination of on-premise applications and cloud-based services. Businesses may scale up or down depending upon the activities performed using the hybrid architecture for AI solutions. The cloud segment has the next high demand in the market. AI tools and software are bringing new and more significant value to cloud computing, which is influencing the adoption of Artificial Intelligence. These are cost-effective for data storage and computation. 

AI Infrastructure Market - By Technology:

• Machine Learning
• Deep Learning

Machine learning is expected to have a robust growth rate and lead the AI infrastructure market in the coming years. During the COVID-19 crisis, machine learning and AI have been broadly adopted. The usage of ML for scaling up customer communication and accelerating the research and treatment process several companies and organizations have adopted during COVID-19. Machine learning provides a capability for the systems to automatically learn and enhance their performance. The surge in technological penetration of data with a need for maximum information from the existing sources will provide to use the of machine learning in AI. 

AI Infrastructure Market - By End Users:

• Enterprises
• Government
• Cloud Service Providers

Cloud service providers are expected to have a significant market share in the AI infrastructure market. The high operating cost involved in AI technology has become a serious obstacle to the AI infrastructure internally. As a result, AI technology outsourcing is gaining demand. AI is mostly available with cloud service providers and offers cutting-edge technology with the available financial resources. The suppliers are introducing new items to provide the required technology to the business. Enterprises are the next high-market shareholders. From automobiles and self-service kiosks to banking, network automation is being achieved as the data loads grow larger and more complex, exceeding the human operators’ capabilities. The cloud and edge are new infrastructures expanding outside the data centers.

AI Infrastructure Market - By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

North America is expected to have a significant market share in the AI infrastructure market. There is an anticipated huge growth opportunity for the market in this region due to the high concentration of artificial intelligence solution vendors. Owing to the rapid digital transformation trends in the Asia-Pacific region, it is expected to hold a high market share. In Japan, by 2035, half of the occupations are expected to be performed by AI robots. This would be a driver for market growth. The announcement of the Chinese government in establishing the Next Generation Artificial Intelligence Development Plan will boom the demand for the AI Infrastructure Market.

KEY MARKET PLAYERS:

Cisco, Intel Corporation, SAMSUNG, Microsoft, NVIDIA Corporation, IBM, Oracle, Xilinx, Google, Advanced Micro Devices, Inc.

RECENT HAPPENINGS IN THE MARKET:

• In 2021: A 3rd Gen Intel Xeon scalable processor with balanced architecture, built-in AI (Artificial Intelligence), crypto accelerator, and advanced security capabilities is launched by Intel.
• In 2021: An announcement is made by AMD regarding the acquisition of Xilinx. The acquisition will benefit both companies by providing complementary product portfolios and assistance in capitalizing on the industry opportunities.