#USA #Redwood City #AI Infrastructure #Hyperscale #Dell'Oro

Hyperscale Capex Surges 82% in Q3 2024

According to a comprehensive report released by the Dell'Oro Group, hyperscale data center capital expenditure (capex) experienced a staggering 82% increase in the third quarter of 2024. This surge is primarily attributed to robust investments aimed at expanding artificial intelligence (AI) infrastructure. As AI continues to revolutionize technology, organizations are ramping up their spending to ensure they are equipped to meet rising demands.

The Dell'Oro Group has long been considered a trusted source for market insights, particularly in the domains of telecommunications, security, and data center infrastructure. In their latest analysis, they highlight a flourishing environment driven by ongoing advancements in AI technologies. Not only are sectors focusing on AI gaining traction, but broad usage across various industries has become evident in recent months as companies seek to gain a competitive edge.

"Accelerated servers designed for AI training tasks have dominated the spending landscape among major U.S. and Chinese hyperscalers this year," noted Baron Fung, Senior Research Director at Dell'Oro Group. He emphasized the significance of NVIDIA GPU systems, which have become pivotal solutions for cloud and enterprise applications. As the market evolves, many U.S. hyperscalers are pursuing vertical integration, thereby increasing the adoption of AI servers featuring custom accelerators.

These tailored architectures, which units are optimized for specific workloads of each cloud service provider, not only enhance experiential capabilities but also deliver substantial capital and operational expenditure savings by increasing system efficiencies.

Moreover, the report sheds light on another increasing trend—the non-hyperscale sector is also witnessing a significant rise in accelerated computing investments, which more than doubled compared to the previous year. Such remarkable growth reveals a shift where even smaller enterprises are increasingly recognizing the value of integrating advanced computing technology.

Key Findings from the 3Q 2024 Report

Some noteworthy highlights include:

• - Global data center capital expenditures are projected to rise an incredible 44% in 2024. This growth is largely fueled by sustained demand for both AI-oriented and general infrastructure investments.
• - Leading the pack in server revenue for Q3 2024 was Dell, followed closely by IEIT Systems and HPE. The accelerated server sector constituted approximately 40% of the overall OEM server revenue.
• - The market for white-box server vendors has become increasingly robust, capturing over 60% of the revenue share in the accelerated server market, in light of the growing demand from hyperscale services.
• - AI expenditures are anticipated to remain a critical growth driver, although growth rates in data center capex may temper in 2025 as certain hyperscale cloud providers pause their expansion initiatives temporarily.

The Dell'Oro Group's Data Center IT Capex Quarterly Report offers detailed insights into the capital expenditures related to data center infrastructure from the leading cloud service providers. It categorizes data center spending across general-purpose and accelerated servers, storage systems, and supplementary equipment, while also addressing market trends influencing the growth trajectories of these key players.

For enterprises seeking deep market understanding, the availability of the data presented in this report is indispensable, offering a fact-based foundation for critical business decisions moving into the next fiscal year. To acquire this vital information, interested parties can reach out to Dell'Oro Group directly.

About Dell'Oro Group

Dell'Oro Group is known for its dedication to providing in-depth competitive analysis within the realms of telecommunications, security, and enterprise networks. Committed to delivering quantitative data combined with qualitative insights, Dell'Oro aims to guide businesses through the complexities of strategic decision-making in fast-evolving technology landscapes. For more details, please contact them or visit their official website.