AI Accelerator Revenues Surge

Recent findings reveal a remarkable 130% increase in sales for AI accelerators in the third quarter of 2024. This growth is primarily attributed to major US companies, often referred to as hyperscalers, adopting tailor-made AI solutions that are transforming the infrastructure of data centers.

According to the Dell’Oro Group, a reputable source for statistics in telecommunications and data center sectors, over 5 million AI training-capable accelerators, including GPUs and custom accelerators, are projected to be deployed by significant players like Amazon, Google, Meta, and Microsoft this year.

Baron Fung, the Senior Research Director at Dell’Oro Group, noted that the demand for these accelerators is skyrocketing as hyperscalers urgently work to upgrade their infrastructures to support the training and inference of large language models. This race to enhance AI capabilities has led hyperscalers to increasingly prefer specialized accelerators over conventional GPUs. As these organizations expand their AI frameworks with bespoke solutions—often developed in collaboration with chip manufacturers such as Marvell and Broadcom—they aim to optimize performance, reduce costs, and lessen dependency on NVIDIA GPUs.

Additional insights from the Q3 2024 Data Center IT Semiconductors and Components Quarterly Report indicate significant market growth in server and storage system components, expected to exceed 100% in 2024. The momentum is fueled by demand for accelerators, memory, and storage technologies.

In terms of revenues, NVIDIA solidified its position as the top supplier for component sales, followed closely by SK Hynix and Samsung. Notably, nearly half of the reported sales were attributed to NVIDIA, but the trend indicates that hyperscalers deploying customized solutions are gaining ground rapidly.

Anticipated Trends

The report also highlights a surge in revenues from smart Network Interface Cards (NICs) and Data Processing Units (DPUs) due to the extensive deployment of network adapters in AI clusters. However, a moderation in growth is expected, transitioning to healthy double-digit increases in 2025. There is some anticipation of a potential slowdown in general-purpose server components early next year, prompted by necessary inventory adjustments.

The Dell’Oro Group’s Data Center IT Semiconductors and Components Quarterly Report, providing insights since 2018, continues to track various critical components pivotal to data center infrastructure, which includes CPUs, GPUs, FPGAs, and specific AI Application-Specific Integrated Circuits (ASICs), among others.

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