Artificial Intelligence (AI) Chip Market Size, Share, and Trends 2024 to 2034

Artificial Intelligence (AI) Chip Market Size and Forecast 2024 to 2034

The global artificial intelligence (AI) chip market size is estimated at USD 73.27 billion in 2024 and is anticipated to reach around USD 927.76 billion by 2034, expanding at a CAGR of 28.90% from 2024 to 2034.

Increasing demand for deep learning and deployment of artificial intelligence (AI) in various industries are boosting the growth of the artificial intelligence chip market.

Key Takeaways

• By Geographically, North America region dominates the global market.
• By technology, the machine learning segment dominates the global market. 
• By chip type, the CPU segment is the leading the global market. 
• By processing type, the edge segment accounted more than 75% of revenue share in 2023. 
• By function, the inference segment is growing at a significant rate. 
• By end-users, the BFSI segment holds the maximum revenue share and is predicted to maintain growth from 2024 to 2034.

U.S. Artificial Intelligence (AI) Chip Market Size and Growth 2024 to 2034

The U.S. artificial intelligence (AI) chip market size is estimated at USD 22.57 billion in 2024 and is expected to be worth around USD 291.06 billion by 2034, rising at a CAGR of 29.11% from 2024 to 2034. 

Geographically, North America dominates the global artificial intelligence chip market. The growing deployment of artificial intelligence technology in the IT industry is considered a major driving factor for market growth in North America. The presence of significant technology companies in the US and Canada is propelling the growth of the artificial intelligence chip market in the region. Europe is the fastest-growing region in the global artificial intelligence (AI) chip market. 

The growth of the AI chip market in Europe is attributed to the rapid adoption of AI technology in the automotive and healthcare sectors. Germany is the fastest-growing country in the artificial intelligence chip market in Europe.

Asia Pacific is expected to witness significant growth during the forecast period with increasing investment in the software industry. Developing industries in the countries such as India and China are seen as an essential driving factor for the market's growth. China is the major contributor to the artificial intelligence chip market in the Asia Pacific due to the presence of major manufacturers. 

The digital transformation in developing countries such as Argentina, Brazil & Mexico is considered to boost the growth of the artificial intelligence chip market in Latin America. The market growth in the Middle East and Africa is still steady. However, the rapid technological changes in developing countries will boost the demand for AI-based chips in these regions. 

Market Overview

The artificial intelligence (AI) chip is specifically designed to be used in various industries. Such artificial intelligence chips have integrated the acceleration of AI. The rising adoption of artificial intelligence in multiple sectors has forced chipmakers to discover and develop advanced, cheaper, and faster artificial intelligence (AI) chips. Artificial intelligence chips are designed to help enterprises in achieving business insights. Artificial intelligence chips offer better usefulness as compared to other traditional chips. AI chips work more effectively and efficiently by ensuring a better battery life for the device/application. 

The artificial intelligence chip consists of networking, computing, and storage. However, the hardware infrastructure of an artificial intelligence chip has been changing continuously with rapid advancements in technology. Chipmakers are focused on developing lighter and smaller AI chips. Artificial intelligence chips perform much faster, which allows devices to perform multiple tasking simultaneously. 

Artificial intelligence chips act as semiconductors to minimize human errors. Also, they are capable of completing computational tasks at a faster rate. Companies such as NVIDIA, Intel, Google Alphabet and Advanced Micro Devices have already entered the global artificial intelligence chip market by launching their AI chip models. 

Market Scope

Market Dynamics

Many enterprises are shifting towards artificial intelligence to reduce overall operational costs, driving the growth of the artificial intelligence chip market. Increased investment in research and development (R&D) activities for the discovery of advanced AI chips has boosted the growth of the artificial intelligence chip market on a global level. 

The demand for quantum computing that is utilized in taking large data sets on operational failures to improve operational efficiency is rapidly emerging. This is considered to drive the market's growth during the forecast period. The demand for systems to manage such data sets has increased with increased big data. 

AI chips and applications offer effective management of big data for multiple enterprises. Thus, many developers are focused on producing advanced artificial intelligence chip-based applications. The advancement in technology, including the deployment of robotics in many fields, has propelled the growth of the artificial intelligence chip market.

Artificial intelligence chips are widely utilized in security cameras. The increased demand for surveillance cameras for official, institutional, or home use drives the market's growth. Continuous advancement in the designing of video games has boosted the demand for artificial intelligence-based graphic chips in the market. The surging demand for AI applications from the healthcare and retail sectors to manage big data is one of the major driving factors for the market's growth.

However, the lack of a skilled workforce in the market to successfully implement and manage artificial intelligence systems is seen as a significant restraint to the growth of the artificial intelligence chip market. Lack of awareness about artificial intelligence technology in underdeveloped countries hampers market development. Moreover, the unavailability of high-quality structured data hinders the growth of the artificial intelligence chip market. 

The price of AI chips is relatively high, which limits the purchase of AI chip-based applications for small or medium enterprises. This factor is considered a restraint to the growth of the global AI chip market. 

Covid-19 Impacts:

The unpredicted spread of Coronavirus across the globe has negatively impacted the artificial intelligence market. The overall IT and semiconductor industries were disturbed due to the Covid-19 pandemic. Delayed or denied production due to the shutdown of manufacturing units, disrupted supply chain, shortage of working professionals and decreased demand caused adverse effects on the global artificial intelligence chip market. The Covid-19 pandemic changed consumer behavior and altered the business revenues of the global artificial intelligence chip market.

Discoveries, research and development (R&D) activities were on halt during the pandemic. The uncertainty in the economic conditions of the global artificial intelligence (AI) chip market resulted in difficulties for product decision-making, investments, strategic partnerships, collaboration, and mergers in the market. However, the increased deployment of artificial intelligence in various industries after the Covid-19 pandemic will combat the loss of the global artificial intelligence chip market. 

Technology Insights

Based on the technology, the global artificial intelligence chip market is segmented into machine learning, natural language processing, context-aware computing, computer vision and predictive analysis. The machine learning segment dominates the global artificial intelligence chip market. The increasing adoption of machine learning by multiple industries and the availability of big data have fueled the growth of the market's machine learning (ML) segment. Machine learning uses statistical techniques to make decisions without any human intervention. 

The application of machine learning offers accurate predicting outcomes. The important function of machine learning is fraud and network security threat detection. Prominent enterprises use machine learning to understand consumer interests to provide better service. The machine learning technology segment will acquire the largest revenue share of the market during the forecast period. 

Chip Type Insights

Based on chip type, the global artificial intelligence chip market is segmented into GPU, ASIC, FPGA, CPU and others. Every AI chip type carries a unique feature and function. The CPU segment is the leading segment in the artificial intelligence chip market. AI Central Processing Unit (CPU) type chips are advanced and can complete the computation faster. GPU holds the second position in the artificial intelligence chip market. graphic processing units (GPUs) are used in refining and developing AI algorithms. The application of AI algorithms in real-time data inputs with field-programmable gate arrays (FPGAs). 

Processing Type Insights

Based on processing type, the edge processing type segments dominate the AI chip market and generated more than 75% of revenue share in 2022. Edge processing allows computation to be done close to the actual location of data by reducing bandwidth use. The edge processing maximizes operational efficiency and enables the processing of algorithms locally. 

However, the cloud processing type segment is expected to witness significant growth during the forecast period in the global artificial intelligence chip market. The development of the cloud segment is attributed to the faster adoption of cloud services in AI, the flexibility provided by cloud processing, and enhanced scalability. The cloud processing segment will be adopted rapidly during the forecast period as it offers more efficient, insight-driven and strategic operations. 

Function Insights

Based on the function, the market for the inference function segment is growing at a significant rate. It helps in achieving conclusions from data or evidence. The increasing demand for achieving/deriving data at a faster rate has boosted the growth of the inference segment in the global artificial intelligence (AI) chip market.

End-Users Insights

Based on end-users, the BFSI segment holds the largest revenue share and is anticipated to maintain growth during the forecast period. The utilization of AI in the banking sector to reduce the burden and accelerate productivity by decreasing the risk of error has increased in recent years. 

Furthermore, the healthcare segment will show the highest revenue share in the global AI chip market during the forecast period. Increasing demand for patient data management and analysis is considered to boost the growth of the healthcare segment. 

Artificial intelligence systems offer multiple advantages to the radiology department, and diagnosis and management in the healthcare sector have become easier with the deployment of artificial intelligence. These factors are propelling the growth of the healthcare segment. Moreover, the retail segment is expected to grow during the forecast period. 

Artificial Intelligence (AI) Chip Market  Companies

• NVIDIA Corporation
• General Vision Inc.
• Amazon Web Services
• Google Inc.
• Microsoft Corporation
• Advanced Micro Devices Inc. 

Recent Developments

• In January 2023, Perceive AI launched its second-edge Artificial Intelligence (AI) chip for low-power applications. The company stated that this edge chip is four times faster than the first-generation edge chip that offers low power and high performance. 
• In January 2023, American multinational company AMD unveiled a series of x86-based chips containing an onboard dedicated AI engine. It is developed for laptops that have 25 billion trans, and the chip will be available in laptops from March 2023. 
• In December 2022, Axelera AI launched a combined platform that uses its Metis AI Processing Unit (AIPU) Chip, RISC-V Controller and Voyager SDK Software Stack. The newly launched Metis platform is available to accelerate computer vision processing at the edge.
• In December 2022, Taiwan based, a leading company in the global AI chip market, Advanced Video Systems, launched a smart AI+AHD chip module for security cameras. 
• In December 2022, California-based chip start-up, EnCharge AI, raised $21.7 million to commercialize computing technology designed to run AI-based applications. 
• In May 2022, Intel Corporation launched an artificial intelligence (AI) chip called Greco for inference roles. The chip offers roles for making predictions and identifying objects.
• In September 2022, the global market leader NVIDIA launched a graphic chip that utilizes enhanced AI to create realistic images in video games. 
• In August 2022, a globally leading company, Intel, collaborated with Able, a cloud-based solution provider. This collaboration aims to leverage artificial intelligence to deliver rapid business operations, and this strategic collaboration includes engineering optimizations. 

Segments Covered in the Report

By Technology

• Machine learning
• Natural language processing
• Context-aware computing
• Computer vision
• Predictive analysis

By Chip Type

• GPU
• ASIA
• FPGA
• CPU
• Others

By Processing Type

• Edge
• Cloud

By Function

• Training
• Inference

By End-Users

• Manufacturing
• Healthcare
• Automotive
• Agriculture
• Retail
• Human Resources
• Marketing
• BFSI
• Government
• Others

By Geography

• North America
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa