Dublin, Feb. 27, 2025 (GLOBE NEWSWIRE) — The “AI Chip Market – Global Outlook & Forecast 2024-2029” report has been added to ResearchAndMarkets.com’s offering.
The AI Chip Market was valued at USD 23.19 billion in 2023, and is projected to reach USD 117.50 billion by 2029, rising at a CAGR of 31.06%.
The global AI chip market is witnessing high competition fueled by the booming demand for high-performance, low-power data processing solutions essential for scaling big data analysis, smart manufacturing, and other key sectors. As companies race to innovate, advancements in AI chipsets are becoming crucial for enabling faster, more efficient data handling, and supporting the complex needs of future technologies across various industries.
Several leading tech companies are heavily investing in R&D to create advanced AI processors, aiming to meet the growing demand for faster, more efficient AI computations. Companies like NVIDIA Corporation, AMD, Intel, and Microsoft are designing specialized AI chips that enhance processing speeds, lower energy consumption, and support complex machine learning tasks, from natural language processing to autonomous driving.
The Artificial Intelligence chip market exhibits significant regional variations driven by factors such as technological advancements, investment levels, infrastructure, and the demand for AI applications. North America, particularly the U.S., is a key leader in the global AI chip market, supported by strong technological innovation, a large number of AI startups, and heavy investments in AI research and development.
Furthermore, in APAC, the market is growing rapidly, primarily due to the rise of technological hubs like China, Japan, South Korea, and India. China, in particular, is making strides to reduce its dependence on foreign chip manufacturers and has heavily invested in developing its own AI chip technology. Europe, while not as dominant as APAC and North America, is witnessing substantial growth in AI chip adoption, driven by increasing government initiatives aimed at fostering AI innovation and industrial applications. Germany, the UK, and France are key players in the region, with a strong focus on integrating AI chips into industries like automotive, healthcare, and manufacturing.
The Middle East and Africa a smaller AI chip markets in comparison, but there are emerging opportunities driven by government initiatives in countries like the UAE and Saudi Arabia, which are integrating AI technology into various sectors including smart cities, healthcare, and energy. Latin America, while still developing in terms of AI infrastructure, is witnessing early-stage growth, particularly in countries like Brazil and Mexico, as companies begin to explore AI for applications in finance, and others.
AI CHIP MARKET TRENDS & OPPORTUNITIES
Advanced Node Development
The term “advanced node” refers to smaller manufacturing processes for building integrated circuits, leading to increased transistor density, performance, and energy efficiency. As AI models become more complex, the power and efficiency of AI chips are crucial. Smaller nodes, like 7 nm, 5 nm, and 3 nm, enable more transistors per square millimeter, allowing for faster, parallel processing of data. For instance, In March 2024, the U.S. Department of Commerce and Intel announced a preliminary agreement for Intel to receive approximately USD 8.5 billion in funding under the CHIPS and Science Act.
This support will enhance Intel’s semiconductor manufacturing and R&D efforts at its facilities in Arizona, New Mexico, Ohio, and Oregon. The funding aligns with Intel’s strategy to lead in process technology, build a resilient supply chain, and develop a world-class foundry business, advancing US semiconductor leadership. Combined with Intel’s planned USD 100 billion investment over five years, this marks one of the largest public-private investments in U.S. semiconductor history.
Furthermore, funding from the CHIPS Act is vital for Intel’s goal of becoming the world’s second-largest foundry by 2030, following TSMC. The Act helps Intel achieve process parity and leadership by supporting advancements in cutting-edge technologies, like the 18A process node, which is key to manufacturing more powerful and efficient semiconductors.
Government and Private Investment in AI Chip
Governments worldwide have recognized the strategic importance of AI and are investing heavily in AI chip technologies to maintain competitiveness on a global scale. One of the primary motivations for government investment in AI chips is national security. For instance, the U.S. government is set to invest up to USD 100 million to accelerate research and development of sustainable semiconductor materials using artificial intelligence (AI).
Announced by the US Department of Commerce on October 2, 2024, this initiative under the CHIPS for America program aims to expedite the creation of new materials and manufacturing processes that meet market needs within five years while addressing environmental sustainability. The funding will support collaborations between universities, industries, and research institutions, leveraging AI-powered autonomous experimentation to enhance materials research and foster innovation in the semiconductor sector.
MARKET RESTRAINTS
Challenges Associated With High-Power Consumption
The reliability testing of AI chips faces significant challenges primarily due to ultra-high-power consumption, ultra-low voltage, and heterogeneous integration. One major issue is the substantial heat generated by cloud AI chips, which can consume over 200W of power. This high power consumption accelerates the aging process of the chips, necessitating rigorous reliability evaluations. For example, sampling 77 chips for a 1000-hour reliability test can produce tens of thousands of watts, putting immense pressure on the system’s thermal dissipation and balance capabilities. Effective management of heat is essential to maintain stable junction temperatures, which is crucial for accurately predicting the lifespan of these high-performance chips.
RECENT PRODUCT LAUNCHES
In October 2024, AMD launched the Ryzen AI PRO 300 Series Processors, featuring the new Zen 5 architecture designed for enhanced business productivity. The series supports advanced features like live captioning and language translation in conference calls through the integrated NPU with over 50 TOPS of AI processing power. Models include the Ryzen AI 9 HX PRO 375 with 12 cores, boosting up to 5.1GHz, and enhanced security through AMD’s PRO Technologies.
In March 2024, NVIDIA Corporation launched the Blackwell Platform, a new GPU architecture designed to power generative AI and trillion-parameter-scale models at significantly reduced cost and energy consumption. The innovative features include the Blackwell GPU with 208 billion transistors, a second-generation Transformer Engine, and the GB200 Grace Blackwell Superchip, which integrates advanced AI, computing, and networking technologies.
In 2023, at Microsoft Ignite, the company unveiled its custom-designed chips: the Azure Maia AI Accelerator and the Azure Cobalt CPU, aimed at enhancing AI infrastructure and performance. The Maia AI Accelerator is tailored for AI tasks, while the Arm-based Cobalt CPU focuses on general compute workloads.
SEGMENTATION INSIGHTS
INSIGHTS BY TYPE
The global AI chip market by type is segmented into GPU, ASIC, FPGA, CPU, and others. The ASIC-type segment is expected to grow at the highest CAGR of over 31.70%, due to their ability to deliver unmatched processing efficiency and power consumption benefits for specific tasks. ASICs are custom-built for particular applications, which makes them incredibly efficient in processing data-intensive AI algorithms like deep learning. These chips are popular among large AI companies, especially in data centers and high-performance computing, where the sheer processing power and efficiency of ASICs can significantly reduce operational costs and latency.
INSIGHTS BY PROCESSING
The processing segment within the global AI chip market, which includes cloud and edge computing, is a rapidly growing sector, and it plays a critical role in defining the AI capabilities of both enterprises and consumer applications. The cloud segment dominates the market largely due to its scalability, flexibility, and efficiency in handling large datasets and intensive computational tasks. This flexibility has led to the widespread adoption of cloud AI solutions across various industries, including finance, healthcare, and autonomous vehicles. As a result, cloud-based AI chips support companies and researchers in accelerating tasks such as image and voice recognition, natural language processing, and predictive analytics.
INSIGHTS BY END-USER
The global Artificial Intelligence chip market by end-user is segmented into data centers, automotive, consumer electronics, and others. The data center segment holds the highest revenue share, making it a pivotal area of growth and investment for companies specializing in AI-enabled hardware. The amount of data being generated globally is increasing exponentially, thanks to the digitalization of services, IoT devices, cloud computing, and social media platforms. Data centers house the infrastructure that stores, processes, and analyzes this vast amount of data, making them critical for the operation of AI applications. Data centers are increasingly integrating AI-specific chips to enhance their capabilities in handling AI workloads.
KEY QUESTIONS ANSWERED
- How big is the global AI chip market?
- What is the growth rate of the global AI chip market?
- Which region dominates the global AI chip market share?
- What are the significant trends in the AI chip industry?
- Who are the key players in the global AI chip market?
Key Attributes:
| Report Attribute | Details |
| No. of Pages | 323 |
| Forecast Period | 2023 – 2029 |
| Estimated Market Value (USD) in 2023 | $23.19 Billion |
| Forecasted Market Value (USD) by 2029 | $117.5 Billion |
| Compound Annual Growth Rate | 31.0% |
| Regions Covered | Global |
Premium Insights
Opportunity Pockets
- Market Maturity Indicator
- Regional Insights
- Recent Agreements and Advances in AI Chip
- Governments Boost Domestic Semiconductor Production with New Incentives
- Value Chain Analysis
Market Opportunities & Trends
- Growing Outlook for AI Chips in Automotive
- Integration of AI in Data Centers
- Advanced Node Development
- Increased Adoption of Edge Computing
Market Growth Enablers
- Growing Demand for AI Solutions
- Technological Advances in AI Chip
- Government and Private Investment in AI Chip
- Advances in Internet Connectivity
Competitive Landscape
Key Company Profiles
- AMD
- Intel Corporation
- NVIDIA Corporation
- QUALCOMM Incorporated
- Taiwan Semiconductor Manufacturing Company Limited
Other Prominent Vendors
- Alphabet Inc
- Amazon Web Services, Inc
- Apple Inc
- Baidu, Inc
- Cerebras Systems
- General Vision Inc.
- Graphcore
- Horizon Robotics
- IBM
- Imagination Technologies
- krtkl inc
- MediaTek
- Microchip Technology Inc.
- Micron Technology, Inc
- Microsoft
- Mythic
- NXP Semiconductors
- Samsung Electronics Co., Ltd
- SK hynix inc
- Tenstorrent
- ThinkForce
For more information about this report visit https://www.researchandmarkets.com/r/ex1p93
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