Global AI chip revenue to reach $53B in 2023

The global revenue opportunity for semiconductors designed for artificial intelligence (AI) workloads is set to hit US$53.4 billion in 2023.

This is according to analyst firm Gartner and is an increase of over 20 per cent from 2022.

The firm expects revenue for AI semiconductors to continue to see double-digit growth through the two-year forecast period of 2022 to 2024, with the figure predicted to reach US$67 billion by next year.

By 2027, Gartner expects the market to skyrocket to US$119.4 billion as more industries and IT organisations deploy AI-driven systems.

According to its research, generative AI will drive demand for high-performance computing systems for development and deployment, with many vendors offering high performance graphics processing unit- (GPU) based systems and networking equipment seeing significant near-term benefits.

In the long term, as hyperscalers look for efficient and cost-effective ways to deploy these applications, Gartner forecasts an increase in their use of custom-designed AI chips.

“The developments in generative AI and the increasing use of a wide range of AI-based applications in data centres, edge infrastructure and endpoint devices require the deployment of high-performance GPUs and optimised semiconductor devices,” said Alan Priestley, VP analyst at Gartner. “This is driving the production and deployment of AI chips.”

The research also showed the need for efficient and optimised designs to support cost effective execution of AI-based workloads will result in an increase of custom-designed AI chips.

“For many organisations, large scale deployments of custom AI chips will replace the current predominant chip architecture – discrete GPUs – for a wide range of AI-based workloads, especially those based on generative AI techniques,” added Priestley.

Gartner’s findings follows those from research firm GlobalData, which forecasted earlier tis month that global generative AI revenue will hit US$33 billion by 2027.

According to GlobalData, the market will grow at an 80 per cent compound annual growth rate (CAGR) over a five-year period, driven by ongoing research and development as well as increasing commercial applications across all sectors.