Data Center GPU Market Size, Share, and Trends 2024 to 2033

Data Center GPU Market Size and Growth

The global data center GPU market size was USD 13.18 billion in 2023, estimated at USD 16.94 billion in 2024, and is expected to reach around USD 162.04 billion by 2033, expanding at a CAGR of 28.52% from 2024 to 2033. Increasing demand for artificial intelligence and growing PC gaming and gaming console industries are the key drivers for the growth of the data center GPU market.

Data Center GPU Market Key Takeaways

• The North America data center GPU market size reached USD 5.01 billion in 2023 and is predicted to attain around USD 62.39 billion by 2033, at a CAGR of 28.68% from 2024 to 2033.
• North America dominated the market with the largest revenue share of 38% in 2023.
• Asia Pacific is expected to witness the fastest growth in the market over the forecast period.
• By deployment model, the on-premises segment has held a major revenue share of 59% in 2023.
• By deployment type, the cloud segment is projected to grow at the fastest rate in the market over the forecast period.
• By function, the training segment has contributed more than 66% of revenue share in 2023.
• By function, the inference segment is projected to gain a significant share of the market in the upcoming years.

Data Center GPU Market Size and Growth 2024 to 2033

The U.S. data center GPU market size reached USD 3.76 billion in 2023 and is predicted to attain around USD 47.10 billion by 2033, at a CAGR of 28.76% from 2024 to 2033.

North America dominated the data center GPU market in 2023. The data center GPU market in America is thriving due to technological advancements and advanced research models based on high-end GPUs. Key factors influencing this market include high-tech industries, extensive research and development efforts, and rising investments in artificial intelligence and machine learning applications. The growth is particularly driven by the growing adoption of cloud services by businesses across various sectors, especially in the United States and Canada.

• In May 2024, Nscale, in collaboration with AMD, launched its high-performance GPU cloud, marking a significant advancement in cloud computing services. Originally spun out from Arkon Energy, a leading 300MW data center and hosting business in North America, Nscale is now setting a new standard for AMD technology-focused cloud solutions.
• In September 2023, Advantech announced the acquisition of a 100% ownership position in BitFlow, Inc., a North American business specializing in AI machine vision and high-end picture collection. In the future, Advantech plans to expand BitFlow's fundamental technology for high-speed image acquisition as well as its broad product line and market basis.

Asia Pacific is expected to witness the fastest growth in the data center GPU market over the forecast period. The data center GPU market in the region is mainly driven by the rapidly expanding IT and telecommunications sector, the growing eCommerce industry, and an increased focus on AI and ML applications. Furthermore, advancements in data center GPUs are expected to propel the global market growth. The collaboration of these factors contributes significantly to the rising demand for data center GPUs. The increasing adoption of cloud computing by businesses in the Asia Pacific region will further boost the demand for data center GPUs in this area.

• In January 2024, Singapore Telecommunications announced a tie-up with Nvidia to deploy artificial intelligence capabilities in its data centers across Southeast Asia as data demand in the region booms on the back of the growing digital economy.

Market Overview

Graphic processing units (GPUs) are widely used in data centers due to their powerful parallel processing capabilities, making them ideal for applications like scientific calculations, machine learning, and big data processing. Unlike central processing units (CPUs), GPUs perform more complex calculations by utilizing parallel processing, where multiple processors handle the same task simultaneously. Each GPU has its own memory to store the data it processes.

A crucial aspect of AI and machine learning (ML) is the training of advanced neural networks, which is significantly accelerated by GPU servers. Companies in the data center GPU market have seen increased demand for their GPU products, such as the Nvidia A100 Tensor Core GPU, specifically designed for AI tasks. The global data center GPU market is expanding as various industries, including healthcare, finance, and autonomous vehicles, adopt GPU servers to manage large datasets and improve the accuracy of AI models.

Data Center GPU Market Growth Factors

• Rising consumer demand and shifting consumer preferences are expected to drive the data center GPU market growth.
• The emergence of more efficient products in the industry can fuel the data center GPU market growth.
• Investments from key industry players will likely help the market grow during the forecast period.

Data Center GPU Market Scope

Data Center GPU Market Dynamics

Driver

Rising adoption of multi-cloud strategies

The increasing adoption of multi-cloud strategies and network upgrades to support 5G is significantly driving the data center GPU market growth. Multi-cloud involves using two or more cloud computing services to deploy specific application services. Businesses are adopting multi-cloud architectures to prevent data loss or downtime from localized failures, ensure compliance with security regulations, and meet workload requirements. This approach also helps avoid dependence on a single cloud service provider. Moreover, Investments in communication network infrastructure are rising to support the transition from 3G and 4G to 5G.

• In October 2023, IBM introduced the new IBM Storage Scale System 6000, a cloud-scale global data platform designed to meet today's data-intensive and AI workload demands and the latest offering in the IBM Storage for Data and AI portfolio.

Restraint

Economical barriers

The economies of scale achieved by GPU manufacturers create a substantial barrier for data center GPU server manufacturers considering backward integration. A company attempting to produce its GPUs would struggle to match these economies of scale. This challenge affects the company's ability to remain competitive, invest in research and development, and offer competitive pricing. Data center GPU server manufacturers may find it difficult to attain similar economies of scale, which can limit their effectiveness in the highly competitive data center GPU market.

Opportunity

Advancements in server technology

Advancements in server technology to support machine learning (ML) and deep learning (DL) are emerging trends that are driving market growth. Data is crucial for an enterprise's decision-making process, and success depends on effective data analysis. Companies are increasingly using advanced technologies like big data, ML, and DL to analyze large datasets. To meet the computing demands of high-performance computing (HPC) workloads, data center GPU market companies are introducing servers with field-programmable gate arrays (FPGAs), application-specific integrated circuits (ASICs), and GPUs.

• In February 2024, Cisco and NVIDIA announced plans to deliver AI infrastructure solutions for the data center that are easy to deploy and manage, enabling the massive computing power that enterprises need to succeed in the AI era.

Deployment Model Insights

The on-premises segment dominated the data center GPU market in 2023. On-premises GPUs give greater control over data and systems. Organizations using on-premises deployment manage their software and hardware independently rather than relying on service providers. This approach ensures higher levels of security and data privacy, as data remains within the organization’s premises. Although on-premises solutions require significant upfront investment, they provide control over long-term costs through ownership.

The cloud segment is projected to grow at the fastest rate in the data center GPU market over the forecast period. Improved offerings like AI-as-a-Service and machine learning require powerful data processing capabilities. Enterprises, a major user segment, are implementing data center GPUs for their in-house data centers and private clouds. These GPUs enable businesses to handle computational and architectural workloads more efficiently.

• In February 2024, Iris Energy, a provider of next-generation renewable energy data centers, announced that it will begin providing its GPU cloud service to prominent AI company Poolside. The agreement follows rigorous testing requirements and will feature the incorporation of 248 NVIDIA H100 GPUs.

Function Insights

The training segment dominated the data center GPU market in 2023. Inference is the process of using a trained machine-learning model to predict outcomes for new, unseen data. It is a computationally intensive task that requires high throughput and minimal delay. On the other hand, training involves using large datasets to teach and optimize a machine-learning model. This process demands GPUs with strong computational capabilities and high memory bandwidth, which can lead to segment growth.

The inference segment is projected to gain a significant share of the data center GPU market in the upcoming years. Inference involves employing a trained machine learning model to forecast outcomes for new, unseen data. It is an intensive computing task that requires high data processing speed and minimal delay. This function is essential for applications such as speech recognition, video analysis, and recommendation systems.

Data Center GPU Market Companies

• NVIDIA Corporation
• Intel Corporation
• Advanced Micro Devices, Inc
• Samsung Electronics Co., Ltd.
• Micron Technology, Inc.
• Advantech Co. Ltd.
• Alphabet Inc.
• Broadcom Inc. Fujitsu Ltd,
• Gigabyte Technology Co. Ltd.

Recent Developments

• In November 2023, the AMD Ryzen Embedded 7000 Series processor family, optimized for the high-performance demands of industrial markets, was unveiled by AMD today at Smart Production Solutions 2023. By fusing integrated Radeon graphics with "Zen 4" architecture, Ryzen Embedded 7000 Series processors offer performance and functionality that was not previously available for the embedded market.
• In November 2023, Imagination Technologies introduced IMG DXD, the first model in a new range of DirectX-compatible high-performance GPU IP. The new IMG DXD has the API coverage to run well-known PC games in addition to other Windows-based apps and mobile games, starting with a hardware-based version of DirectX 11. 
• In September 2023, Cloudflare announced the deployment of Nvidia GPUs at the edge for generative AI inference in up to 300 data centers. With this deployment, Cloudflare aims to improve speed and performance while ensuring the delivery of high-quality services to its customers
• In June 2023, Intel introduced its latest data center GPU, the Max-1550, specifically designed for AI applications. This GPU offers excellent scalability, power efficiency, and impressive performance, particularly in deep learning and inference tasks. It supports various connectivity options, including PCIe 4.0 and NVLink 2.0, providing flexibility for different system configurations.

Segments Covered in the Report

By Deployment Model

• On-premises
• Cloud

By Function

• Training
• Inference

By End-user

• Cloud service providers
• Enterprises
• Government

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa