Artificial Intelligence (AI) Processor Market - Forecasts from 2024 to 2029

Artificial Intelligence (AI) Processor Market - Forecasts from 2024 to 2029

The artificial intelligence (AI) processor market is evaluated at US$7.509 billion for the year 2022 growing at a CAGR of 17.47% reaching the market size of US$23.181 billion by the year 2029.

Growing data volume as a result of connected device proliferation and increased high-speed internet connectivity is a key driving factor for the global artificial intelligence (AI) processor market. AI processors are used to efficiently handle large and parallel operations.

Artificial intelligence (AI) processors incorporate AI technology and are used for machine learning. With the burgeoning volume of data, there is a constantly growing need for more efficient systems to solve complex mathematical and computational problems. As such, companies have started focusing on developing AI processors for various applications across different industries. Furthermore, the emerging popularity of quantum computing and increasing demand for AI processors in the booming robotics industry are also anticipated to provide potential growth opportunities for the global artificial intelligence (AI) processor market during the forecast period. An increase in investments in smart cities across various regions also provides a great opportunity for artificial intelligence processor (AI) market players. Furthermore, growing investments in AI startups, backed by various venture capitalists, are thus positively impacting the market growth of artificial intelligence (AI) processors. A surge in demand for AI to be integrated into video surveillance and a rise in government spending for cybersecurity solutions integrated with real-time analytics and AI will further drive the global market growth of artificial intelligence during the forecast period. The growing emergence of quantum computing is another potential factor for the growth of the artificial intelligence (AI) market during the forecast period.

MARKET DRIVERS:

Increasing demand for AI applications.

One important factor influencing the artificial intelligence (AI) processor industry is the growing need for AI applications. The integration of AI technologies into several industries, including healthcare, finance, technology, and the automotive sector, has led to an increasing demand for specialized hardware that can manage the intricate processing demands of AI workloads. To satisfy these expectations, AI processors which are made to effectively carry out activities linked to machine learning, deep learning, and other AI applications—are essential. With companies looking to use AI for activities like image recognition, natural language processing, and data analysis, the speed and efficiency provided by specialized AI processors become critical.
Growth strategies of key market players.

Companies are adopting various growth strategies such as acquisitions, partnerships, collaborations, and product launches to strengthen their AI processor product portfolio while expanding their market share, thus positively impacting the market growth of artificial intelligence (AI) processors worldwide. For instance, in May 2022, Intel Corp. introduced its AI Gaudi2 chip, 4th generation Xeon Scalable processors, Project Apollo AI program with Accenture, a new IPU roadmap extending through 2026, a new GPU Solution, and new 12th Gen Core HX processors for laptops. AI advancements in various industries is anticipateds to drive demand for artificial intelligence (AI) processors during the forecast period. Elon Musk, the founder of Tesla, for example, launched the tech startup Neuralink to develop implants that use AI to connect brains with computer interfaces. AI processor manufacturers are also engaged in growth strategies including product launches, investments, partnerships, and collaborations to meet the emerging demand and expand their global market share, which will also fuel the growth of the artificial intelligence (AI) processor market.

The North American artificial intelligence (AI) processor market is anticipated to grow significantly.

Geographically, the Artificial Intelligence (AI) processor market is segmented into North America, South America, Europe, the Middle East, Africa (MEA), and Asia Pacific (APAC). North America accounted for the major market share in 2020 and is anticipated to remain in its position during the forecast period. Early adoption of new advanced technologies and the presence of major market players in the region support the growth of this regional market. Increasing investments in artificial intelligence (AI) in countries such as the United States and Canada are also driving the growth of this regional market. In February 2020, California-based startup Pony.ai received funding of $462 million, out of which $400 million came from Toyota for autonomous driving.

The APAC regional market is projected to witness a substantial CAGR during the forecast period on account of major AI processor makers such as Samsung and Huawei in the region. Growing adoption of AI technology across various industry verticals such as automotive and transportation, healthcare, BFSI, and retail in countries such as South Korea, India, and China is significantly augmenting regional demand for artificial intelligence (AI)processors. Increasing investments in 5G and IoT technology are also spurring the market growth of AI processors in this region.

Key Developments:

In December 2023, Intel unveiled an unparalleled array of AI technologies at its AI Everywhere launch in New York City, enabling customers' AI solutions across the data center, cloud, network, edge, and PC.
Fraunhofer IPMS and CAST announced a RISC-V Embedded Processor for Edge AI in December 2021. A new RISC-V processor option that can perform artificial intelligence (AI) and machine learning (ML) functions in standalone devices. The EMSA5-FS Processor core supports the execution of vector instructions, which enable parallel processing of datasets and, as a result, can improve performance and energy efficiency.

Segmentation:

By Processor Type
GPU
ASIC
FPGA
Others
By Technology
System-on-Chip
Multi-Chip Module
System-in-Package
Others
By Processing Type
Cloud
Edge
By Industry Vertical
BFSI
IT and Telecom
Healthcare
Retail
Media and Entertainment
Others
By Geography
North America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
Germany
France
United Kingdom
Spain
Others
Middle East and Africa
Saudi Arabia
UAE
Israel
Others
Asia Pacific
China
Japan
South Korea
India
Thailand
Indonesia
Taiwan
Others