#United States #Redwood City #Dell'Oro Group #AI Accelerators #Hyperscalers

AI Accelerator Market Sees Unprecedented Growth

In a remarkable turn of events, the revenue for AI accelerators has surged by a staggering 130% in the third quarter of 2024, as reported by Dell'Oro Group, a leading authority in telecommunications and data center market research. This explosive growth reflects the increasing demand from major companies, including US hyperscalers like Amazon, Google, Meta, and Microsoft, who are expected to deploy more than five million AI training-capable accelerators this year.

Factors Driving the Surge

According to Baron Fung, Senior Research Director at Dell'Oro Group, the race to establish robust infrastructure for training and inference of large language models has prompted hyperscalers to rapidly increase their deployment of accelerators. This trend is not limited to commercially available GPUs; hyperscalers are also prioritizing custom-designed accelerators intended to meet their specific needs. As the requirement for processing power escalates with the growth of large language models, these companies are increasingly opting for custom solutions co-developed with semiconductor giants like Broadcom and Marvell. Such innovations are proving essential for enhancing performance efficiency while reducing costs and dependency on NVIDIA GPUs.

Revenue Highlights from Q3 2024

The findings from Dell'Oro Group's latest report reveal several key insights:

• - The Server and Storage Systems Component market is projected to grow over 100% in 2024, primarily driven by the surge in accelerator sales alongside memory and storage solutions.
• - Notably, NVIDIA leads the pack in component revenues, encompassing nearly 50% of the total market. However, custom solutions offered by hyperscalers are emerging as a serious competitor.
• - Revenues from Smart NIC (Network Interface Card) and DPU (Data Processing Unit) have nearly doubled in Q3 2024, fueled by the robust deployment of network adapters in AI clusters, underscoring a shift towards more integrated and efficient networking options.

Future Market Projections

While the dramatic growth is exhilarating, analysts predict a moderation in the pace of growth, projecting a healthy double-digit increase going into 2025. Early adjustments in inventory levels for general-purpose server components may lead to a temporary slowdown in that segment. Nevertheless, the overall outlook for AI-focused infrastructure remains strong as the technology continues to redefine operational efficiencies.

Conclusion

The future of AI accelerators appears extraordinarily bright. As major technology firms ramp up their capabilities to meet the demands of advanced AI applications, innovation in infrastructure will likely continue at a breakneck speed. With custom accelerators quickly becoming a critical component of AI strategy, companies that can effectively pivot and adapt to these changes will be the ones to thrive in the competitive landscape ahead.

For those keen on understanding the dynamics of the AI accelerators market, Dell'Oro Group's comprehensive report offers invaluable insights. To explore more about this vibrant sector and obtain detailed analytics, the Dell'Oro Group can be contacted at [email protected].