SUNNYVALE, Calif., April 29, 2024 — Intersect360 Research has released its annual Worldwide HPC-AI Market 2023 Total Market Size and 2024–2028 Forecast, detailing the tremendous growth of the HPC-AI market in 2023. The total worldwide market for scalable computing infrastructure for High Performance Computing (HPC) and Artificial Intelligence (AI) was $85.7 billion in 2023, up 62.4% year-over-year, due predominantly to a near tripling of spending by hyperscale companies on their AI infrastructure. The on-premises HPC-AI infrastructure market grew at a steady clip, up 7.1% from 2022.

2023 was the first year in which hyperscale companies’ spending on AI infrastructure exceeded the entirety of spending for on-premises infrastructure for HPC-AI. “This dramatic growth in hyperscale AI is akin to a gold rush,” says Intersect360 Research CEO Addison Snell. “It belies any normal market dynamic.

“Enthusiasm for the promises of AI has carried the HPC-AI market to new heights, in both on-premises and hyperscale data centers. Following this initial spike in investment, organizations will take stock to consider the true business models for AI.”

Intersect360 Research Chief Research Officer Dan Olds explains, “We see some wild swings ahead for the hyperscale AI market segment. After 18 months or so of unprecedented outlay, hyperscaler spending on compute will come down to earth in the next couple of years. However, on-premises HPC-AI spending should grow at rate that offsets the hyperscale slowdown.”

Intersect360 Research forecasts that hyperscale companies’ spending on AI infrastructure hit a peak in 2023 and will regress in the years ahead. The combined hyperscale plus on-premises HPC-AI market will remain largely flat over the next five years with a .3% compound annual growth rate (CAGR). However, over those five years, on-premises infrastructure for HPC-AI will grow at 5.4% CAGR, while hyperscale HPC-AI infrastructure falls back, at -4.6% CAGR.

“The relative dip in HPC-AI spending in 2024 and 2025 still represents a tremendous gain from 2022,” says Snell. “Rather than a long-term decline, it represents a return toward normalcy from zealous growth in 2023.”

As steady growth returns, 2028 will be the first year that surpasses 2023 in total spending. By this time, the proportion of on-premises and hyperscale will have reversed positions, as more long-term investment in stable AI for enterprise will migrate away from cloud to on-premises systems.

Snell adds, “We have found through repeated studies that the ‘AI market’ really breaks down mostly into markets already counted. The new, pure-AI infrastructure spending is almost entirely confined to hyperscale and cloud, whereas those who already had on-premises expertise in HPC have expanded their environments to be inclusive of AI. As the enterprise AI market develops, we expect to see a balance between cloud and on-prem, like we do with HPC.”

Hyperscale companies are those with internet-driven business models, spending hundreds of millions to billions of dollars per year in total IT infrastructure. Amazon, Apple, Google, Meta, and Microsoft are the largest examples, but the hyperscale segment also includes non-U.S. companies such as Alibaba, ByteDance, Naver, and Tencent, as well as new AI-focused cloud services such as CoreWeave, Denvr Dataworks, and Lambda.

As Olds describes, “We’ve seen several years of chaos in the HPC, AI, and hyperscale market segments, and that’s not going to change any time soon. We’re going to see big market shifts in the next five years, most of which will probably come as a surprise to many.”

The full report is available for purchase at www.intersect360.com.

Details Available at May 2 Webinar

Snell, Olds, and Senior Analyst Steve Conway will present data and insights from the just-released forecast at a free webinar Thursday, May at 12:00pm Eastern/9am Pacific.

The webinar will include details of the massive hyperscale AI investment in 2023, plus highlights from the firm’s most recent end-user survey on the software powering HPC and AI. Intersect360 Research will also make a major announcement during the webinar.

The 90-minute presentation will include 30 minutes of Q&A. Pre-registration is required, at www.intersect360.com/media/webinar.

About Intersect360 Research

Intersect360 Research is the leading market intelligence, research, and consulting advisory practice focused on high-performance data center trends, including High Performance Computing (HPC), artificial intelligence (AI) and machine learning, cloud computing, big data, and hyperscale. Intersect360 Research utilizes both user-based and supplier-based research to form a complete perspective of market dynamics, trends, and usage models, including both technical and business applications. The company’s end-user-focused research is inclusive from both a technology perspective and a usage standpoint, allowing Intersect360 Research to provide its clients with total market models that include both traditional and emerging HPC applications. In addition to its market advisory subscription services, Intersect360 Research offers customers an array of client-specific services, including custom surveys, white papers and custom analysis. More information about Intersect360 Research as well as the full slate of Intersect360 Research reports available for purchase and download can be found at www.intersect360.com.

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Source: Intersect360 Research