Nvidia dominates AI processor market set to hit US$100bn in 2026

Market news | August 22, 2024

By Peter Clarke

AI MPUs/MCUs Artificial Intelligence

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Nvidia held 92 percent of the GPU-for-AI market in 2023 and 75 percent of the data center AI semiconductor market overall, according to Futurum Intelligence (Austin, Texas).

And this domination is set to continue in an already enormous market that is expected to increase by nearly half in 2024.

Nvidia continues to quadruple sales year-on-year

The analysis firm reckons the total market for processors and accelerators for AI applications in datacenters will be worth US$56.3 billion in 2024, a jump of 49.3 percent compared with the annual market worth US$37.7 billion in 2023. And over the next five years the market is set to achieve a compound annual growth rate of 29.7 percent which will take the market size to US$98.4 billion in 2026 and US$138.3 billion in 2028, the market analyst forecasts.

The AI processors and accelerators market in the datacenter 2023 to 2028 (millions of US dollars). Source: Futurum Group.

Futurum divides the AI datacenter processor market into four categories; CPUs, GPUs, dedicated accelerators called XPUs and proprietary cloud accelerators made by the likes of Google, AWS and Microsoft.

In 2023 CPUs had 20.5 percent of the market, GPUs, 73.5 percent of the market, XPUs and cloud proprietary had 3 percent each.

CPUs represented 20 percent of the AI processing in datacenter market in 2023 and will continue to hold an important role. Futurum estimates they will experience a 28 percent five-year CAGR, growing from US$7.7 billion in 2023 to US$26 billion in 2028. In 2023, Futurum estimates Nvidia had a 37 percent market share, followed by Intel with 23 percent.
GPUs were 74 percent of chipsets used in AI applications within data centers in 2023 and will experience a 30 percent five-year CAGR, growing from US$28 billion in 2023 to US$102 billion by 2028. Futurum estimates Nvidia held a 92 percent of the GPU-for-AI market share.
XPUs will experience a 31 percent five-year CAGR, growing from US$1 billion in 2023 to US$3.7 billion in 2028.
Public Cloud AI Accelerators will experience a 35 percent five-year CAGR, growing from US$1.3 billion in 2023 to US$6 billion in 2028.

Futurum excluded processors and accelerators for AI from this study if they were not available for public use in data centers and therefore did not include AI chipsets designed for and used at Meta, Tesla and Apple.

By geography North America dominates the market, capturing 55 percent of the market in 2023. EMEA and APAC follow as significant markets, while LATAM represents a developing region with substantial growth potential.

The AI processors and accelerators market in the datacenter 2023 market share by geographic region. Source: Futurum Group.

Visual & Audio Analytics was the biggest use case in 2023. Futurum predicts that the top three use cases in 2028 will be Visual & Audio Analytics, Simulation & Modeling, and Text Generation, Analysis, & Summary.