AI-Driven Growth: The Future of Compute Servers Through 2029

The compute server market is set to undergo significant growth driven by the increasing demand for accelerated servers to support AI applications. This surge highlights the expanding role of AI in transforming the compute infrastructure, and the difference between accelerated and non-accelerated servers.

Accelerated Server Market Growth

The accelerated server market, in particular, is witnessing explosive growth, spurred by the need for high-performance infrastructure to manage AI workloads. From 2023 to 2024, the market is expected to double in size, reflecting robust financial results from leading original equipment manufacturers (OEMs) and original design manufacturers (ODMs).

While accelerated servers will play an increasingly important role, they are unlikely to completely dominate the market. By 2029, non-accelerated servers will still constitute two-thirds of total server shipments, with enterprises only investing in the more expensive accelerated servers when necessary. The high capital and operating costs associated with these servers, particularly for AI workloads, will make businesses cautious about adopting them on a large scale.

Pricing Trends

The pricing of servers will also evolve over the forecast period, driven by the need for higher memory capacities and more powerful central processing units (CPUs) to handle increasingly complex AI applications. Additionally, accelerated servers will require more robust and advanced accelerator cards, further contributing to the price increase.

OEM Financial Performance

The OEM market has also experienced strong growth, driven by a combination of increased enterprise spending and improved supply conditions. Major OEMs, including Dell, Supermicro, Lenovo, and HPE, reported impressive revenue growth in the quarter ending in July. This growth is largely driven by demand from tier-2 cloud service providers (CSPs) and enterprise IT sectors, while hyperscalers increasingly turn to ODMs for their server needs.

Unlock the future of compute servers: our latest report delves into the explosive growth of the server market, driven by accelerated servers for AI applications. Discover key insights on market trends, financial performance of leading OEMs and ODMs, pricing forecasts, and shipment projections through 2029. Learn how AI demand is reshaping infrastructure investments, and what it means for your business. Get the data and analysis you need to stay ahead – read the report now!