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Home Technology AI and Machine Learning

AI infrastructure spending to exceed $100 Billion by 2028

FutureIoT Editors by FutureIoT Editors
December 6, 2024
Photo by cottonbro studio: https://www.pexels.com/photo/a-woman-in-a-tank-top-using-a-vr-headset-8721318/

Photo by cottonbro studio: https://www.pexels.com/photo/a-woman-in-a-tank-top-using-a-vr-headset-8721318/

The global market for artificial intelligence (AI) infrastructure is poised for remarkable expansion, with spending expected to surpass $100 billion by 2028. IDC says in the first half of 2024 alone, organisations increased their investments in compute and storage hardware for AI deployments by 37% year-on-year, reaching a total of $31.8 billion.

This growth trend has persisted for nine consecutive half-years, primarily driven by substantial investments in servers tailored for AI applications. In the first half of 2024, servers constituted a staggering 89% of total spending, reflecting a 37% increase compared to the previous year.

Notably, AI infrastructure deployed in cloud and shared environments accounted for 65% of server spending, as hyperscalers, cloud service providers, and digital service providers enhance their infrastructure capabilities. Conversely, traditional enterprises have lagged in adopting on-premises AI infrastructure.

Accelerated servers have emerged as the preferred choice for AI platforms, making up 58% of total server infrastructure spending and experiencing a remarkable 63% growth in the first half of 2024. IDC forecasts that accelerated servers will represent over 60% of AI server spending by 2028, with a projected compound annual growth rate (CAGR) of 19% over five years.

The demand for storage solutions has also surged, driven by the need to manage vast datasets essential for training AI models. This sector recorded a 36% year-on-year growth rate in the first half of 2024, with 56% of spending coming from cloud deployments.

Geographically, the United States leads the AI infrastructure market, accounting for nearly half of total spending in the first half of 2024. The People's Republic of China (PRC) follows with 23%, while the Asia-Pacific Japan (APJ) region and Europe, the Middle East, and Africa (EMEA) account for 16% and 10%, respectively.

Looking ahead, IDC anticipates that the APJ region will experience the fastest growth, with a CAGR of 20%, followed by the USA at 16%, EMEA at 13%, and PRC at 11%. By 2028, AI infrastructure spending is forecast to reach $107 billion, with servers in cloud environments making up 75% of the total market and accelerated servers approximately 56%.

Lidice Fernandez

“IDC expects AI adoption to continue growing at a remarkable pace as hyperscalers, CSPs, private companies, and governments worldwide increasingly prioritise AI,” said Lidice Fernandez, group vice president of Worldwide Enterprise Infrastructure Trackers. She noted that rising concerns over energy consumption related to AI infrastructure are prompting datacentres to seek alternatives to optimise their architectures and reduce energy usage.

Related:  5G set to transform seven major verticals in APAC
Tags: artificial intlligenceIDC
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