AI Infrastructure Market Report 2025

The AI infrastructure market size has grown exponentially in recent years. It will grow from $56.98 billion in 2024 to $74.06 billion in 2025 at a compound annual growth rate (CAGR) of 30%. The growth in the historic period can be attributed to increased data generation, advancements in deep learning, demand for real-time processing, regulatory compliance requirements, data privacy and security concerns.

The AI infrastructure market size is expected to see exponential growth in the next few years. It will grow to $223.85 billion in 2029 at a compound annual growth rate (CAGR) of 31.9%. The growth in the forecast period can be attributed to quantum computing advances, energy efficiency considerations, growth of explainable AI standards, personalization in customer experience, rapid growth in AI applications. Major trends in the forecast period include rapid growth in AI adoption across industries, expansion of edge AI, development of AI-specific hardware, hybrid and multi-cloud deployments, AI-optimized storage solutions, AI security and ethical considerations, collaboration between AI and cloud providers.

The anticipated increase in data traffic and the demand for high computing power are expected to drive the growth of the AI infrastructure market in the future. Data traffic refers to the volume of data transmitted across a computer network at any given moment, while high computing power indicates the capability of systems to process data and execute complex calculations rapidly. High-performance computing (HPC) infrastructure supports AI models by providing storage, networking, and data processing capabilities, enabling AI projects to operate at scale by processing workloads quickly. This significantly accelerates the training phase and enhances the accuracy and reliability of AI models in minimal time. For instance, in June 2022, Ericsson, a Sweden-based networking and telecommunications company, reported a 10% increase in mobile network data traffic from the fourth quarter of 2021 to the first quarter of 2022. Year-over-year, this growth reached 40%. Additionally, a May 2022 report from the International Data Corporation (IDC), a US-based advisory services provider in information technology and telecommunications, indicated that around 50% of startups in the Asia-Pacific region focus on high-performance computing infrastructure to tackle genomic data challenges in life sciences due to its robust computing capabilities. Thus, the growing data traffic and demand for high computing power are driving the expansion of the AI infrastructure market.

The growing demand for cloud services is anticipated to propel the growth of the AI infrastructure market. Cloud services encompass a wide array of on-demand computing resources and applications that are delivered via the internet. In the context of AI infrastructure, these services provide a flexible and scalable platform for developing, deploying, and managing AI applications, enabling organizations to innovate and expand. For example, in January 2023, Google LLC, a US-based information technology company, reported that 76% of people utilized public cloud services in 2022, marking a significant increase of 56% from 2021. Consequently, the rising demand for cloud services is expected to drive the growth of the AI infrastructure market.

Major companies in the AI infrastructure market are emphasizing advancements in technologies such as the Artificial Intelligence of Things (IoT) to boost operational efficiency, enhance data analytics capabilities, and facilitate the seamless integration of AI-driven solutions across various industries. The Artificial Intelligence of Things (IoT) involves the convergence of artificial intelligence with Internet of Things devices, enabling smarter, data-driven decision-making and automation. For instance, in August 2024, Golioth, a US-based technology company, launched an AI-ready IoT infrastructure. This platform fosters a cohesive environment where AI and IoT can collaborate effectively, empowering developers to create smarter and more responsive systems.

Prominent entities within the AI infrastructure sphere are strategically forging partnerships to bolster their operational capacities. These collaborations involve the symbiotic utilization of each other's strengths and resources, aimed at securing mutual advantages and achieving collective success. A recent illustration of this trend occurred in October 2023 when VAST Data, a US-based technology company specializing in flash memory data storage, joined forces with Lambda, an expert in AI-optimized cloud solutions. The alliance seeks to fortify VAST Data's position in AI infrastructure by introducing an innovative hybrid cloud solution tailored specifically for AI and deep learning operations. This concerted effort positions VAST Data as the premier choice for specialized AI service providers, enhancing its leadership in AI infrastructure.

In July 2022, International Business Machines Corporation (IBM), a prominent player in information technology and AI infrastructure, made an undisclosed acquisition of Databand.ai. This strategic move is envisioned to augment IBM's product portfolio across data, AI, and automation domains, aiming to comprehensively address observability needs and facilitate organizations in ensuring secure and reliable data transactions. By integrating Databand.ai, an Israel-based AI infrastructure company, IBM aims to gain a competitive edge and reinforce its foothold in the market by offering enhanced and trustworthy AI-driven solutions.

Major companies operating in the AI infrastructure market are Nvidia Corporation, Intel Corporation, Oracle Corporation, Samsung Group, Micron Technology Inc., Advanced Micro Devices Inc., International Business Machines Corporation, Google LLC, Microsoft Corporation, Amazon Web Services Inc., SK Hynix Inc., Cisco Systems Inc., Arm Limited, Xilinx Inc., Dell Inc., Synopsys Inc., Hewlett Packard Enterprise Company, Cadence Design Systems Inc., Toshiba Corporation, SenseTime Group Limited, Imagination Technologies Limited, Graphcore Limited, Habana Labs Limited, Meta Platforms Inc., Nutanix Inc., Pure Storage Inc., Wave Computing Inc., Tenstorrent Inc., Gyrfalcon Technology Inc., Cambricon Technologies Corporation Limited.

North America was the largest region in the AI infrastructure market in 2024. Asia-Pacific is expected to be the fastest-growing region in the AI infrastructure market report forecast period. The regions covered in the ai infrastructure market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the ai infrastructure market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

AI infrastructure comprises IT infrastructure designed to collect data from various systems, preparing it for analysis and facilitating tasks such as outcome prediction, administrative task automation, and optimization of software-defined infrastructure technologies. This infrastructure is crucial for accessing and managing computing resources, enabling the testing, training, and deployment of AI algorithms in machine learning workflows.

The main components of AI infrastructure include hardware and server software. Hardware encompasses the physical components of computers and related devices. The functions of AI infrastructure involve training and inference, both integral to the machine learning and deep learning processes. Deployment types include on-premises, cloud-based, and hybrid solutions. Various end-users, such as enterprises, government organizations, and cloud service providers, leverage AI infrastructure to enhance their data processing and analysis capabilities.

The AI infrastructure market research report is one of a series of new reports that provides AI infrastructure market statistics, including AI infrastructure industry global market size, regional shares, competitors with an AI infrastructure market share, detailed AI infrastructure market segments, market trends and opportunities, and any further data you may need to thrive in the AI infrastructure industry. This AI infrastructure market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The AI infrastructure market includes revenues earned by entities by processor, storage memory, and software. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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