Artificial Intelligence (chipset) Market

Artificial Intelligence (chipset) Market Outlook from 2024 to 2034

The artificial intelligence (chipset) market is projected to be valued at USD 27.6 billion in 2024. It is expected to rise to USD 287.0 billion by 2034. The demand for artificial intelligence chipsets is expected to grow at a CAGR of 26.4% over the forecast period.

The market is driven by the increasing demand for artificial intelligence applications across industries, the proliferation of data-intensive tasks, and advancements in semiconductor technology, fostering innovation and competition among key industry players.

Key Market Drivers

• The increasing demand for artificial intelligence-powered devices and applications across various industries is driving the growth of the market.
• Artificial intelligence chipsets offer faster processing speeds and better power efficiency, improving the performance of artificial intelligence applications.
• The development of advanced artificial intelligence algorithms and models drives the demand for artificial intelligence chipsets that can handle complex computations and large datasets.
• Integrating artificial intelligence with other technologies, such as the Internet of Things (IoT) and 5G, drives the demand for artificial intelligence chipsets that can handle high-speed data processing and communication.
• The growing demand for edge computing and autonomous devices drives the demand for artificial intelligence chipsets that can handle real-time processing and decision-making.
• Governments, research organizations, and technology companies are increasing their investments in artificial intelligence chipsets, driving market expansion.

Attributes	Key Statistics
Artificial Intelligence (Chipset) Market Value (2024)	USD 27.6 billion
Anticipated Forecast Value (2034)	USD 287.0 billion
Estimated CAGR (2024 to 2034)	26.4%

Consumption Analysis of the Artificial Intelligence (Chipset) Market

• The increasing adoption of artificial intelligence across various industries drives the demand for artificial intelligence chipsets.
• The healthcare industry is adopting artificial intelligence chipsets to improve patient outcomes through personalized treatment plans and medical image analysis.
• The automotive industry is adopting artificial intelligence chipsets for advanced driver assistance systems, autonomous vehicles, and predictive maintenance.
• The consumer electronics industry is adopting artificial intelligence chipsets for voice assistants, smart home devices, and gaming applications.
• The adoption of artificial intelligence chipsets for fraud detection, customer service, and predictive maintenance is also increasing in the finance, retail, and manufacturing industries.
• The versatility and scalability of artificial intelligence chipsets and their ability to handle complex computations and large datasets have made them increasingly popular across various industries.

Factors Adversely Affecting the Artificial Intelligence (Chipset) Market

The market is anticipated to surpass a valuation of USD 287.0 billion by 2034, expanding at a CAGR of 26.4% through 2034. While it is expected to experience tremendous growth, several restraining factors can adversely affect its development and expansion.

• The high cost of artificial intelligence chipsets may deter budget-constrained businesses and consumers from adopting this technology.
• A shortage of skilled professionals with expertise in artificial intelligence and chip design may hinder the effective deployment and maintenance of AI chipsets, slowing market growth.
• The increasing concerns regarding artificial intelligence's ethical and privacy implications may lead to regulatory challenges and limit the adoption of AI chipsets.
• Integrating artificial intelligence chipsets with existing systems and devices may require substantial modifications, posing challenges for organizations seeking a seamless transition to artificial intelligence-enhanced systems.
• The competition among artificial intelligence chipset manufacturers and the rapid technological advancements may lead to a shorter product lifecycle and increased R&D expenses.

Category-wise Insights

CPU’s Versatility and Widespread Adoption in Various Computing Applications

Attributes	Details
Top Chip Type	CPU
CAGR (2024 to 2034)	26.2%

Based on the chip type, the CPU segment dominates the market, growing at a 26.2% CAGR through 2034. This rising popularity of the segment is attributed to the following reasons:

• CPUs can handle various tasks, making them suitable for diverse artificial intelligence workloads.
• CPU manufacturers have been incorporating artificial intelligence-specific features and optimizations into their designs, significantly enhancing their performance in machine learning tasks.
• The existing infrastructure and software ecosystems are well-established around CPU architectures, making it easier for developers to leverage these resources for artificial intelligence applications.
• CPUs' compatibility with traditional software development tools allows for seamless integration of artificial intelligence capabilities into existing systems.

Demanding Computational Tasks Involved in Training AI Models

Attributes	Details
Top Workload Domain	Training
CAGR (2024 to 2034)	25.9%

Based on its workload domain, the training segment dominates the artificial intelligence (chipset) market. It is expected to grow at a 25.9% CAGR through 2034.

• Specialized AI chips such as GPUs and TPUs have emerged as a solution to accelerate the training phase of artificial intelligence models.
• With the increasing complexity of artificial intelligence models, like those in natural language processing and image recognition, organizations and researchers require high-performance chipsets to stay competitive in the artificial intelligence space.
• The ever-growing demand for computational power to train more sophisticated artificial intelligence models drives the dominance of the training workload domain in the AI chipset market.

Country-wise Insights

The section analyzes the artificial intelligence (chipset) market by country, including the United States, the United Kingdom, China, Japan, and South Korea. The table presents the CAGR for each country, indicating the expected market growth in that country through 2034.

Countries	CAGR (2024 to 2034)
United States	26.5%
United Kingdom	28.0%
China	27.2%
Japan	28.2%
South Korea	27.6%

The United States’s thriving Ecosystem of Technology Companies, Research Institutions, and Innovation Hubs

The United States dominates the artificial intelligence (chipset) market in the North American region. It is expected to exhibit an annual growth rate of 26.5% until 2034.

• Silicon Valley, in particular, is a global hub for artificial intelligence development, home to leading companies and startups specializing in semiconductor technology and artificial intelligence applications.
• The United States has a culture of entrepreneurship, significant investments in R&D, and a strong focus on cutting-edge technologies, all of which position it at the forefront of the artificial intelligence (chipset) market.

World-class Research Institutions and Rapidly Growing Tech Industry of the United Kingdom

The United Kingdom is the leading European country in the artificial intelligence (chipset) market. The market is predicted to register an annual growth rate of 28.0% through 2034.

• The United Kingdom strongly emphasizes artificial intelligence research and development, leading to algorithm and application breakthroughs.
• British companies play a critical role in developing artificial intelligence chipsets, and the country's focus on fostering innovation and collaboration in the tech sector enhances its standing in the market.

Strategic Investments in Technological Developments in China

China is another Asian country in the artificial intelligence (chipset) market, which is anticipated to register a CAGR of 27.2% through 2034.

• The Chinese government has prioritized artificial intelligence nationally, leading to substantial funding and initiatives to drive its development and adoption.
• Backed by significant resources, Chinese companies have emerged as key players in manufacturing artificial intelligence chipsets, contributing to the country's dominance in this crucial market segment.

Japanese Long-standing Reputation for Technological Innovation

Japan is another Asian country leading the artificial intelligence (chipset) market. The Japanese market is anticipated to register a CAGR of 28.2% through 2034.

• Japanese companies are renowned for their contributions to semiconductor technology, and the country's commitment to research and development has resulted in cutting-edge advancements in artificial intelligence chip design.
• Japan's strong industrial base and collaborations between academia and industry contribute to its prominence in the global artificial intelligence chipset landscape.

Powerhouse Technology Companies Actively Support Development of Artificial Intelligence in South Korea

South Korea is one of the leading Asian countries in the artificial intelligence (chipset) market. The Korean artificial intelligence (chipset) market is expected to grow annually at 27.6% until 2034.

• South Korean companies excel in semiconductor manufacturing, focusing on producing high-performance chips for artificial intelligence applications.
• South Korea's commitment to fostering a tech-savvy environment and robust research and development initiatives positions South Korea as a key player in the global artificial intelligence (chipset) market.

Competitive Landscape

The artificial intelligence (AI) chipset market has grown significantly in recent years, and several major companies have contributed to this trend.

NVIDIA, a leading graphics processing unit (GPU) manufacturer, has emerged as a key player among these companies. Its GPUs, including the NVIDIA Tesla and NVIDIA A100, are widely used in artificial intelligence applications due to their parallel processing capabilities.

NVIDIA's acquisition of ARM, a major player in semiconductor design, has further solidified the company's position as a key influencer in the artificial intelligence (chipset) market.

Another major market player is Intel, a semiconductor giant that heavily invests in artificial intelligence-related technologies. Intel's portfolio includes CPUs and specialized accelerators like the Intel Nervana Neural Network Processors, which cater to diverse needs in the growing market. Intel aims to provide a comprehensive range of hardware solutions for artificial intelligence applications.

Recent Developments

• On November 7, 2023, it was reported that Huawei has planned to challenge Nvidia. US restrictions on Nvidia's AI chip sales to China allowed Huawei to gain higher market share.
• On January 30, 2024, the startup Rebellions launched its ATOM chip in South Korea. The chip aims to compete with Nvidia Corp, positioning itself as the latest Korean artificial intelligence technology hardware contender.
• On September 20, 2023, Intel announced its inaugural artificial intelligence-equipped chipset for personal computers, marking the USA chipmaker's entry into the artificial intelligence-powered PC competition. The move aimed to revitalize the PC market and reclaim global semiconductor industry leadership.
• On June 14, 2023, Amazon Web Services (AWS) reportedly considered employing artificial intelligence (AI) chips from Advanced Micro Devices (AMD) after rejecting Nvidia. The move aimed to enhance AWS's cloud computing services.

Key Companies in the Market

• Nvidia Corporation
• Intel Corporation
• Xilinx Inc.
• Samsung Electronics Co., Ltd
• Micron Technology
• Qualcomm Technologies
• IBM Corporation
• Google Inc.
• Microsoft Corporation
• Apple Inc.
• Amazon Web Services (AWS)
• Advanced Micro Devices, Inc.
• Graphcore
• General Vision
• Mellanox Technologies
• Huawei Technologies Co. Ltd
• Fujitsu
• Wave Computing
• Mythic Inc.
• Adapteva
• Koniku
• Tenstorrent

Key Market Segmentation

By Chip Type:

• CPU
• GPU
• FPGA
• ASIC
• Others

By Workload Domain:

• Training
• Inference

By Computing Technology:

• Cloud AI Computing
• Edge AI Computing

By Vertical:

• Healthcare
• Manufacturing
• Automotive
• Retail & E-Commerce
• Marketing
• Consumer Electronics

By Region:

• Asia Pacific
• Europe
• North America
• Middle East & Africa
• Latin America

Frequently Asked Questions

How Big is the Artificial Intelligence (Chipset) Market in 2024?

The artificial intelligence (chipset) market is predicted to be worth USD 27.6 billion in 2024.

What is the Sales Forecast for Artificial Intelligence Chipsets through 2034?

The artificial intelligence (AI) chipset market is expected to reach USD 287.0 billion by 2034.

At What Rate is the Artificial Intelligence (chipset) Market Expected to Grow?

The artificial intelligence (chipset market) is expected to grow at a CAGR of 26.4% from 2024 to 2034.

Which are the Key Companies in the Market?

Some key players in the market are Nvidia Corporation, Intel Corporation, Xilinx Inc., Samsung Electronics Co., Ltd, Micron Technology, Qualcomm Technologies, IBM Corporation, Google Inc., Microsoft Corporation, Apple Inc., and Amazon Web Services (AWS).

Which is the Top Chip Type in the Market?

CPU is the top chip type, dominating the market.