Artificial Intelligence Chips Market Size 2024-2028

The artificial intelligence chips market size is projected to increase by USD 389.25 billion, at a CAGR of 68.13% between 2023 and 2028. The expansion of the AI chips market is influenced by various factors. First, the integration of AI chips in data centers is becoming more prevalent. Second, there is a heightened emphasis on creating AI chips specifically for use in smartphones. Lastly, the development of AI chips for autonomous vehicles is also progressing. These chips are essential components in processing units for AI applications, including robotics and data analysis in data centers. They are distinguished by their ability to mimic human intelligence, such as learning, reasoning, and adapting to past experiences. The creation of these AI chips involves incorporating human intellect traits into computer algorithms. The market for AI chips is experiencing significant growth due to the escalating demand for artificial intelligence chips.

What will be the Size of the Artificial Intelligence Chips Market During the Forecast Period?

For more highlights about this AI chips market size report, Download Free Sample

The global AI chip market is experiencing a period of rapid evolution, driven by a combination of factors, including advancements in artificial intelligence technology, increasing demand for AI-powered applications, and growing adoption of AI in various industries. Key trends shaping the industry include a shift towards specialized AI chips, the increasing popularity of edge computing, and a growing focus on energy efficiency and power consumption. As AI technology continues to evolve and become more sophisticated, there is a rising demand for AI chips that can handle complex workloads and deliver high performance. The AI chip market is also witnessing a shift towards specialized AI chips, which are designed to optimize specific AI tasks, such as image recognition, natural language processing, and machine learning. Additionally, the increasing adoption of edge computing, which involves processing data closer to the source, is driving demand for AI chips that can be integrated into edge devices. Overall, the global AI chip market presents both challenges and opportunities for businesses, as they navigate the evolving landscape and strive to meet the changing needs of the AI industry.

Artificial Intelligence Chips Market Segmentation

The artificial intelligence chips market forecasting report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Product Outlook 
  • ASICs
  • GPUs
  • CPUs
  • FPGAs
• End-user Outlook 
  • Media and Advertising
  • BFSI
  • IT and telecommunication
  • Automotive
  • Others
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

By Product 

The market share growth of the ASICs segment will be significant during the forecast period. ASICs represent a specialized category of chips, featuring high customization and resembling GPUs in appearance. These application-specific integrated circuits (ASICs) serve as programmable integrated circuits, offering an instruction set and libraries that enable the IC to process locally stored data and function as an accelerator for various parallel algorithms. Notably, ASICs outperform GPUs and field-programmable gate arrays (FPGAs) in terms of speed but lack the ability to be reconfigured. The outlook for the artificial intelligence chip market remains optimistic, according to market research reports. The AI chip market report underscores substantial growth and innovation in this sector.

Get a glance at the market contribution of various segments. Download the PDF Sample

The ASICs segment was valued at USD 4.36 billion in 2018. The market for AI chips is experiencing growth due to the adoption of application-specific integrated circuits (ASICs) in data centers. ASIC-based AI chips are gaining popularity over GPUs, FPGAs, and CPUs due to their superior performance and speed in data center applications. Companies have already integrated Tensor processing units (TPUs) into their servers for managing large data sets. TPUs are custom-designed chips that can be used to modify TensorFlow programs and create new algorithms. This upgrade is expected to accelerate machine learning training on Google's cloud platform. Other tech companies are also developing TPUs and plan to offer them as part of their cloud services. As a result, ASIC-based AI chips are projected to witness substantial growth during the forecast period. It is essential for data centers to keep up with the latest technology to effectively manage and process large amounts of data. Therefore, the integration of ASICs and TPUs into cloud offerings is a significant trend in the AI chip market.

The AI chip market growth and forecasting report includes key players' detailed analyses of the competitive landscape of the market and information about key companies, including Advanced Micro Devices Inc., Alphabet Inc., Baidu Inc., Broadcom Inc., Cerebras, Fujitsu Ltd., Graphcore Ltd., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., MediaTek Inc., Microchip Technology Inc., NXP Semiconductors NV, Qualcomm Inc., SambaNova Systems Inc., Samsung Electronics Co. Ltd., SenseTime Group Inc., Taiwan Semiconductor Manufacturing Co. Ltd., and Tesla Inc.

Regional Overview

For more insights on the market share of various regions, Download PDF Sample now!

North America is estimated to contribute 51% to the growth of the global AI chips market size  during the forecast period. Technavio's industry analysts have delved deep into the AI chip market outlook, offering comprehensive insights into the regional trends and growth factors shaping the industry's progression during the forecast period. The North American market for AI chips exhibits substantial expansion, fueled primarily by escalating investments in autonomous vehicle technology. Advanced systems such as ADAS, HUD, LiDAR, and RADAR are integral to these vehicles, relying on electronic components like sensors, microcontrollers, microprocessors, and RF components for real-time data generation and processing. As a result, chip manufacturers are allocating substantial resources towards research and development to produce chips specifically designed for autonomous vehicles. North America is a hub for leading automakers, with significant production of luxury and sports cars occurring in Canada, the US, and Mexico. The region has witnessed substantial investment in facility construction and capacity expansion to meet the growing demand for advanced automotive technology.

Artificial Intelligence Chips Market Dynamics

The market for artificial intelligence chips is experiencing rapid progress, fueled by advancements in quantum computing, generative AI, and the creation of supercomputers outfitted with high-performance Trainium2 chips. These technological innovations cater to a wide range of industries, including retail, finance, and the expanding Internet of Things (IoT) sector. However, as AI applications become more prevalent, ethical concerns regarding their use and specific integrated technologies, such as CPUs, FPGAs, GPUs, and system on chip solutions, continue to surface. The trend toward edge computing and multichip module architectures further underscores the market's expansion and evolution towards more efficient and powerful AI processing capabilities.

As the demand for AI-driven solutions grows, competition among manufacturers intensifies, leading to continuous innovation and adaptation to meet the intricate computational requirements of modern AI applications. The market analysis report indicates that the growth of the AI semiconductor market is primarily driven by technological advancements. The forecast for the AI chip market reveals substantial growth due to the increasing need for AI-powered applications across various industries, such as healthcare, automotive, and finance. The production of advanced AI chips is expected to rise as companies invest heavily in their development.

 Key Market Driver

The growing demand for advanced technologies such as dual-lens and triple-lens cameras, augmented reality (AR), facial recognition, and other innovative features in smartphones is driving the market for AI chips. Many smartphone OEMs are integrating these technologies to differentiate their products and attract customers to upgrade. However, the processors currently integrated into these devices are not efficiently supporting these applications. This limitation necessitates advancements in technology, including robotics, hardware components, and AI algorithms, to effectively support machine learning (ML).

To address this challenge, companies like AMD are developing EPYC processor series and other AI-based tools to enhance the performance of smartphones and other devices. These advancements focus on integrated circuits, algorithmic calculations, and neural network architectures. As a result, smartphone users are finding these technologies to be valuable additions to their devices. In response, smartphone OEMs are investing heavily in the development of these technologies to support the advanced features being deployed in their devices. These factors are expected to fuel the growth of the AI chips market during the forecast period.

 Major Market Trends

The adoption of artificial intelligence (AI) technology is gaining momentum among businesses, with an estimated 70%-75% projected to integrate it in some capacity within the next two decades. This trend is fueled by the rapid expansion of AI in various industries, making the AI chip market a promising investment opportunity.

Major chip manufacturers and venture capitalists have taken notice, pouring significant resources into funding AI start-ups to develop advanced platforms and chipsets. This investment growth will propel the growth of the AI chip market during the forecast period.

Significant Market Restraint

Artificial intelligence (AI) chips market expansion is being hindered by the intricacies of interpreting data. Three primary hurdles prevent artificial intelligence from optimally processing data: language, context, and reasoning. Existing AI technologies struggle to process data in a manner similar to humans due to the predominant representation of information as data, rather than language. Since AI interprets data as spatial text, contextual complications arise. However, language must be processed in the relevant context, which can only be established when the language is truly comprehended, not just read.

Moreover, AI technologies must analyze data and derive accurate interpretations to make informed decisions. These systems cannot tackle complex issues without the capacity to grasp the underlying meaning. This presents a substantial challenge for the AI chips market, as numerous AI systems are required to analyze vast quantities of data that are processed in real-time. The AI chip market will likely witness restricted growth unless highly efficient systems are engineered to surmount the complexities associated with data comprehension. Consequently, these factors will impede the expansion of the artificial intelligence chips market throughout the forecast period. 

Customer Landscape

The AI chip market forecast report includes the adoption lifecycle of the market research and growth, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the artificial intelligence chips market growth analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies. With the AI chips market growth accelerating, insights from market analysis report and detailed artificial intelligence chips market analysis are crucial.

Global Market Customer Landscape

Key Artificial Intelligence Chips Market Companies & Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the AI chip market.

• NVIDIA Corp.- The company offers artificial intelligence chips under its brand GEFORCE.

Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak. With significant AI chip market growth and developments in AI, the artificial intelligence chips market is witnessing growth. This growth in the AI semiconductor market forecast is further bolstered by innovations in deep learning, edge computing, and neural networks. Meanwhile, the AI chip market forecast highlights the role of these chips in driving advancements in machine learning and data processing, making them critical components for the future of AI-driven technologies.

Market Analyst Overview

The AI chip market is experiencing a significant shift as innovative technologies like the Trainium2 chip and Nvidia A100 chip enter the scene. These chips cater to various requirements in terms of energy efficiency and AI chip lines, offering alternatives to solutions such as the Ascend 910B and H200 chipsets. Major cloud providers are utilizing these advancements for data processing in centralized cloud servers and edge devices for real-time applications. These developments tackle challenges like latency and process massive amounts of big data through high computing and parallel computing capabilities. AI data centers are vital in cognitive computing and machine intelligence, supporting applications ranging from image recognition to health monitoring and personalized health.

The global AI chip market is undergoing a period of significant transformation, driven by a confluence of factors, including advancements in artificial intelligence technology, increasing demand for AI-powered applications, and growing adoption of AI in various industries. Key trends shaping the industry include a shift towards specialized AI chips, the increasing popularity of edge computing, and a growing focus on energy efficiency and power consumption. As AI technology continues to evolve and become more sophisticated, there is a rising demand for AI chips that can handle complex workloads and deliver high performance. The AI chip market is also witnessing a shift towards specialized AI chips, which are designed to optimize specific AI tasks, such as image recognition, natural language processing, and machine learning. Additionally, the increasing adoption of edge computing, which involves processing data closer to the source, is driving demand for AI chips that can be integrated into edge devices. Overall, the global AI chip market presents both challenges and opportunities for businesses, as they navigate the evolving landscape and strive to meet the changing needs of the AI industry.

Moreover, the AI chip market's expansion into mobile applications, smart homes, and manufacturing machines highlights its far-reaching influence across industries. This growth stimulates progress in DSP, frame buffer, and programmable logic chip technologies for improved visual understanding and automatic analysis. The market is fueled by the demand for AI algorithms and machine learning applications in various sectors. These are integrated circuits engineered for algorithmic calculations and optimized for neural network architectures. These chips facilitate deep learning and other functions, making them indispensable for industries like autonomous vehicles, healthcare, and robotics. Leading companies, such as the EPYC processor series, are developing AI-driven tools to boost computer vision and other capabilities, spurring innovation in the tech industry through sophisticated memory structures and general-purpose processors.

Download PDF Sample

What are the Key Data Covered in this Artificial Intelligence Chips Market Research Report?

• CAGR of the market report forecast during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the size of the market and its contribution in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough market analysis and report of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

We can help! Our analysts can customize this AI chips market research report to meet your requirements. Get in touch