AI Chips Market Set to Grow by $210,506.47 Million from 2022-2027

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The artificial intelligence (AI) chips market size is estimated to grow by USD 210,506.47 million from 2022 to 2027 at a CAGR of 61.51% according to Technavio. The growing competition in the market is compelling vendors to adopt various growth strategies such as promotional activities and spending on advertisements to improve the visibility of their services. Technavio report analyzes the market's competitive landscape and offers information on several market vendors including Advanced Micro Devices Inc., Alphabet Inc., Baidu Inc., Broadcom Inc., Cerebras Systems Inc., Fujitsu Ltd., Graphcore Ltd., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., MediaTek Inc., Microchip Technology Inc., NVIDIA Corp., NXP Semiconductors NV, Qualcomm Inc., SambaNova Systems Inc., Samsung Electronics Co. Ltd., SenseTime Group Inc., Taiwan Semiconductor Manufacturing Co. Ltd., and Tesla Inc.

Artificial intelligence (ai) chips market - Vendor Insights

The growing competition in the market is compelling vendors to adopt various growth strategies such as promotional activities and spending on advertisements to improve the visibility of their services. Technavio report analyzes the market's competitive landscape and offers information on several market vendors including Advanced Micro Devices Inc., Alphabet Inc., Baidu Inc., Broadcom Inc., Cerebras Systems Inc., Fujitsu Ltd., Graphcore Ltd., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., MediaTek Inc., Microchip Technology Inc., NVIDIA Corp., NXP Semiconductors NV, Qualcomm Inc., SambaNova Systems Inc., Samsung Electronics Co. Ltd., SenseTime Group Inc., Taiwan Semiconductor Manufacturing Co. Ltd., and Tesla Inc.

Artificial Intelligence (AI) Chips Market – Market Dynamics

Key Artificial Intelligence (AI) Chips Market Driver

The increasing adoption of AI chips in data centers is a major factor notably driving the market growth. Data centers play a vital role in running online services for businesses and relying on CPU chips to operate their thousands of servers. However, with the increasing demand for AI, additional processors have been incorporated to complement CPUs. These AI-powered neural networks analyze extensive data to enhance task learning. To ensure optimal performance and cost efficiency, data center providers are leveraging AI technology for various purposes such as security, server optimization, energy efficiency, and infrastructure management. Chip manufacturers are seizing the expanding opportunities in data centers by introducing AI chips specifically designed for these applications. For instance, NVIDIA introduced its BlueField-3 DPU in 2021, catering to AI and accelerated computing within data center infrastructure. Furthermore, the integration of AI chips by smartphone vendors in their products is a key driver behind the significant growth of the global AI chips market. Consequently, these factors will propel the growth of the AI chips market during the forecast period.

Significant Artificial Intelligence (AI) Chips Market Trends

Increasing investments in AI start-ups is an emerging trend shaping the growth of AI Chips Market.

With the rapid expansion of AI technology across various industries, the market for AI chips is experiencing significant growth, attracting both established companies and start-ups. It is projected that around 70%-75% of businesses will adopt AI technology to some extent within the next two decades. This promising market potential has attracted major chip manufacturers and venture capitalists, who are investing heavily in start-up companies to develop AI platforms and chipsets. For instance, in 2021, Shanghai-based start-up Innostar Semiconductor secured USD 100 million in pre-series A funding led by Shanghai Lianhe Investment, with participation from New Alliance, Atlas Capital, and KQ Capital. The funding will be utilized to develop chips for resistive RAM and storage. Such factors are expected to drive market growth during the forecast period.

Major Artificial Intelligence (AI) Chips Market Challenge

Complexities in understanding data are major challenges hindering the artificial intelligence chips market growth. AI faces three key challenges - language, context, and reasoning - in order to fully comprehend and utilize data. Current AI technologies struggle to process information in a manner similar to humans, as they primarily process data rather than language. This leads to contextual issues since AI interprets data as spatial text. However, a true understanding of language can only be achieved when it is comprehended rather than simply read. Effective decision-making by AI relies on processing data and attaining accurate understanding. Without the ability to understand, AI technology cannot effectively solve complex problems. This presents a significant obstacle for the market, as numerous AI systems must analyze vast amounts of continuously processed data. Unless highly efficient AI chips and systems are developed to address the complexities of data understanding, the artificial intelligence chips market growth will be restricted during the forecast period.