The global data center accelerator market is projected to reach $382 billion by 2029, according to a new report from Dell’Oro Group. Custom accelerators are also poised to outpace commercially available accelerator such as GPUs in volume during that time period.
“AI workloads are expected to drive substantial growth in server and storage components over the next five years, fueling demand for accelerators, specialized memory, storage, and connectivity,” said Baron Fung, Senior Research Director at Dell’Oro Group. “While recent developments like DeepSeek have highlighted concerns over the sustainability of recent expenditures, the cloud service providers are undergoing a multi-year capex cycle to support larger LLMs and expand AI services, broadening use cases. Sustainable growth remains a priority, with more efficient architectures and LLMs on the horizon. We expect the hyperscalers to transitioning from commercial GPUs to custom accelerators over time, enhancing efficiency and reducing costs,” said Fung.
Additional highlights from the Data Center IT Semiconductors and Components 5-Year January 2025 Forecast Report:
- By 2029, we project accelerators will lead the market in revenue, followed by storage drives and memory, with CPUs trailing behind these technologies.
- The memory (HBMs) and storage drive (SSDs and HDDs) markets will benefit from growth driven by increasing AI deployments.
- The Ethernet network adapter market for supporting back-end networks in AI compute clusters is projected to grow at a 40 percent CAGR by 2029.