Artificial Intelligence Chipset Market

• The growing adoption of cloud-based solutions among firms is driving the market growth

Market CAGR for artificial intelligence (AI) chipsets is being driven by the advancement of cloud technology would create opportunities for major players in the artificial intelligence chipsets market. The increasing data center establishment globally in various sectors, including IT & telecom, automotive, etc., is likely to propel the demand for Al chipsets based on the cloud. Moreover, companies such as Alibaba Group Holding Limited, Intel Corporation, NVIDIA Corporation, and others offer the cloud-based Al chipset. These key players are concentrating on launching advanced cloud-based solutions to handle mega file storage and enormous business data.

For example, in September 2019, Alibaba Group Holding Limited established an artificial intelligence (AI)-based chipset - "Hanguang 800," that delivers advanced computing capacity on the cloud. This chip can accelerate machine learning assignments and improves the consumer experience.

Additionally, the growing penetration of e-commerce and social media leads to a wide growth in data volume. Owing to rapid growth in the volume of data, the requirement for high-speed processors has also enhanced, which is positively influencing the growth of the market. The chipset addresses the requirement for faster processing due to enabled machine learning. Individuals' inclination towards computer vision and machine learning devices drives tech giants to invest in high-speed processor development.

Furthermore, quantum computing technology is widely adopted by firms globally to solve complex problems and perform analytical calculations. For instance, in October 2019, Google LLC's Sycamore quantum computer was the fastest computer that could work a specific task in around 200 seconds. Quantum computers are enabled with technologies including artificial intelligence, computer vision, machine learning, big data, AR/VR, and others. Thus, the emergence of quantum computing is anticipated to drive the growth of the artificial intelligence (AI) chipset market revenue.

Additionally, the application technologies for AI are autonomous vehicles, smart healthcare, smart homes, intelligent robots, smart cities, smart finance, intelligent hardware, self-service store, intelligent security, and intelligent education. AI technology is multifaceted as it runs via the algorithm mechanism, chipset type, application, and computing technology. The basic applications that run over AI are related to image/ video, natural language processing, sound and speech, device control, and high-volume computing. The chipsets help run these applications at the edge.

The Global Artificial Intelligence (AI) Chipset Market Industry is poised for remarkable growth, with projections indicating a market value of 4.04 USD Billion in 2024 and an anticipated surge to 98.1 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate (CAGR) of 33.65% from 2025 to 2035, reflecting the increasing integration of AI technologies across various sectors. The demand for advanced AI chipsets is likely to be driven by the rising need for efficient data processing and analysis, as well as the growing reliance on AI applications in everyday business operations.

The Global Artificial Intelligence (AI) Chipset Market Industry experiences a surge in demand driven by the increasing adoption of AI applications across various sectors. Industries such as healthcare, automotive, and finance are integrating AI technologies to enhance operational efficiency and decision-making processes. For instance, AI-powered diagnostic tools in healthcare are improving patient outcomes, while autonomous vehicles rely on AI for navigation and safety. This growing reliance on AI applications is expected to propel the market, with projections indicating a market value of 4.04 USD Billion in 2024, highlighting the industry's rapid expansion.

The shift towards edge computing is reshaping the Global Artificial Intelligence (AI) Chipset Market Industry. By processing data closer to the source, edge computing reduces latency and bandwidth usage, making it ideal for AI applications in real-time scenarios. Industries such as manufacturing and smart cities are increasingly deploying AI at the edge to enhance operational efficiency and responsiveness. This trend is likely to drive demand for specialized AI chipsets designed for edge devices. As organizations seek to leverage real-time data analytics, the market is expected to witness significant growth, further solidifying the role of AI chipsets in modern computing architectures.

The proliferation of cloud-based AI services is a pivotal factor influencing the Global Artificial Intelligence (AI) Chipset Market Industry. Major cloud service providers are offering AI capabilities as part of their platforms, enabling businesses to access advanced AI tools without significant upfront investments in hardware. This model democratizes access to AI technologies, allowing small and medium enterprises to leverage AI for competitive advantage. As cloud adoption continues to rise, the demand for AI chipsets that support cloud infrastructure is expected to grow. This trend reinforces the market's potential, with projections indicating a robust growth trajectory in the coming years.

Technological advancements in semiconductor manufacturing are significantly influencing the Global Artificial Intelligence (AI) Chipset Market Industry. Innovations such as smaller transistors and improved fabrication techniques enable the production of more powerful and energy-efficient AI chipsets. For example, the development of 7nm and 5nm process technologies allows for higher performance while reducing power consumption. These advancements not only enhance the capabilities of AI applications but also lower operational costs for businesses. As a result, the market is poised for substantial growth, with a projected CAGR of 33.65% from 2025 to 2035.

Investment in AI research and development is a critical driver of the Global Artificial Intelligence (AI) Chipset Market Industry. Governments and private entities are allocating significant resources to foster innovation in AI technologies. For instance, initiatives like the European Union's Digital Europe Programme aim to bolster AI capabilities across member states. This influx of funding supports the development of advanced AI chipsets, which are essential for powering sophisticated AI algorithms. As the market evolves, the anticipated growth trajectory suggests a market valuation of 98.1 USD Billion by 2035, underscoring the importance of sustained investment.

By region, the study delivers market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American artificial intelligence (AI) chipset market will dominate this market, owing to increasing government investments in R&D and the availability of established IT infrastructure, which will boost the market growth in this region. Further, the US artificial intelligence (AI) chipset market held the largest market share, and the Canadian artificial intelligence (AI) chipset market was the fastest-growing market in the North American region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Artificial Intelligence (AI) Chipset Market SHARE BY REGION 2022 (USD Billion)

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Europe's artificial intelligence (AI) chipset market accounts for the second-largest market share due to the growing adoption of AI technology in various industries, including automotive, manufacturing, healthcare, retail, and advertising. Further, the German artificial intelligence (AI) chipset market held the largest market share, and the UK artificial intelligence (AI) chipset market was the fastest-growing market in the European region.

The Asia-Pacific artificial intelligence (AI) chipset market is expected to grow at the fastest CAGR from 2023 to 2032. This is owing to the rising investments in Al technology. The manufacturing sector is adopting the latest and modern methods of production, which has supported the deployment of Al chips. Moreover, China’s artificial intelligence (AI) chipset market held the largest market share, and the Indian artificial intelligence (AI) chipset market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing huge amounts in R&D to improve their product lines, which will assist the artificial intelligence (AI) chipset market to grow even more. Market participants are also undertaking multiple strategic activities to enhance their global footprint, with important market developments including new product launches, mergers and acquisitions, contractual agreements, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the artificial intelligence (AI) chipset industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global artificial intelligence (AI) chipset industry to benefit clients and increase the market sector. Major players in the artificial intelligence (AI) chipset market, including IBM Corporation (US), Micro Technology (US), Samsung Electronics Co. Ltd (South Korea), Advanced Micro Devices (US), Huawei Technologies Co. Ltd (China), and others, are attempting to increase market demand by investing in research and development operations.

Intel Corp designs and develops technology products and components. The firm's product portfolio comprises microprocessors, chipsets, flash memory, graphic, network and communication, embedded processors and microcontrollers, and conferencing products. It also offers motherboards, solid-state drives, server products, wireless connectivity products and software and applications. Intel markets its products and solutions to industrial and communications equipment manufacturers, original equipment manufacturers, and original design manufacturers. The firm's products find applications in notebooks, servers, tablets and desktops. Intel markets processors under Core, Atom, Celeron, Quark, Pentium, Xeon, and Itanium brand names.

In March 2021, Intel collaborated with the Central Board of Secondary Education (CBSE), aiming to introduce the 'AI For All' initiative to create a basic understanding of artificial intelligence across various industry verticals in India.

NVIDIA Corp is a designer and developer of graphics, central, and system-on-a-chip units. The company offers its products to gaming, professional visualization, data center, and automotive markets. It also delivers solutions for Artificial Intelligence and data science, design and visualization, data center and cloud computing, edge computing, high-performance computing, and self-driving vehicles. NVIDIA offers gamers, professional graphic designers, researchers, and developers products through GeForce NOW, Quadro, GeForce, SHIELD, vGPU, DOCA, JESTON, and Bluefield brand names.

The company serves various sectors: architecture, engineering, construction, internet, cybersecurity, energy, financial services, healthcare and life sciences, education, gaming, manufacturing, media and entertainment, retail, robotics, telecommunication, and transportation. In January 2022, Nvidia and AMD announced that the U.S. government had placed new restrictions to cut China and Russia off from high-end AI chips.