AI Chipsets Market to be Worth $260.2 Billion by 2031 | Meticulous Research®

The global AI chipsets market is expected to witness significant growth over the next few years, with a projected market size of $260.2 billion by 2031, expanding at a compound annual growth rate (CAGR) of 27.2% from 2024 to 2031. This rapid expansion is driven by several factors, including advancements in artificial intelligence (AI) technology, the increasing demand for edge computing, and the rise of autonomous systems and robotics. However, the complexity of AI algorithms and the lack of technical expertise and standards could impede market growth.

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Despite these challenges, the growing demand for AI-enabled devices and the development of smart robots offer significant growth opportunities for businesses operating in the AI chipsets market. Key trends such as the integration of legacy systems with modern AI technologies and the proliferation of autonomous vehicles are shaping the future of this industry.

Market Segmentation
The AI chipsets market is segmented into various categories, including offering (hardware and software), technology, vertical industries, and geography.

By Offering
The market is primarily divided into hardware and software segments. The hardware segment, which includes processors, memory, and networking components, is expected to account for the largest share of the market, making up 76% in 2024. The processor segment, specifically graphics processing units (GPUs), is anticipated to lead, with a 47% share of the global AI chipset market. This dominance is attributed to the increasing integration of AI in sectors such as healthcare, automotive, retail, and manufacturing.

AI chipsets are essential for processing the large volumes of data required by AI algorithms to function effectively. The rising demand for AI-driven devices such as smartphones, autonomous vehicles, smart speakers, and smart cameras is driving the growth of the hardware market. These devices rely on specialized hardware to deliver AI-powered functionalities and features efficiently.

Leading companies are constantly launching new AI chipsets to meet this growing demand. For example, in March 2024, NVIDIA Corporation introduced its latest generation of AI chips and software designed to power advanced AI models. Cerebras Systems also launched its third-generation AI processor, the WSE-3 chip, which offers twice the performance of its predecessor and boasts 1.2 trillion transistors and 400,000 computing cores. The hardware segment is expected to maintain its leading position and register the highest CAGR during the forecast period.

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By Technology
The AI chipsets market is also segmented by technology, including machine learning, natural language processing (NLP), context-aware processing, computer vision, predictive analysis, and other technologies. In 2024, the machine learning segment is expected to dominate the market, accounting for 53% of the global market share. Machine learning enables AI chipsets to adapt to changing workloads and environments through dynamic voltage and frequency scaling (DVFS) or adaptive clocking, which improves performance and power efficiency.

Machine learning algorithms also help detect and mitigate hardware faults by analyzing sensor data and performance metrics. This ability to identify hardware degradation and take proactive measures enhances the reliability and longevity of AI chipsets.

While machine learning leads the market, NLP is projected to register the highest CAGR during the forecast period. NLP's integration into AI chipsets supports edge computing, where data processing occurs locally rather than relying on cloud services. This architecture reduces latency and improves the efficiency of NLP applications. AI chipsets with embedded NLP capabilities are also highly robust, ensuring reliable performance in various operating environments.

By Vertical
The AI chipsets market serves several industries, including automotive & transportation, smart factories, smart cities, smart retail, consumer electronics, healthcare, and others. In 2024, consumer electronics is expected to account for the largest share, making up 59% of the global market. The proliferation of Internet of Things (IoT) devices and connected ecosystems has driven demand for AI chipsets in consumer electronics. These chipsets enable devices to analyze sensor data, communicate with other devices, and make intelligent decisions autonomously, contributing to the rise of smart homes, wearables, and connected solutions.

AI chipsets also enhance consumer electronics by offering personalized user experiences. These chipsets analyze user behavior, preferences, and contextual data, enabling devices to tailor functionalities and interactions to individual users. This personalization increases customer satisfaction and engagement.

Although consumer electronics dominate, the healthcare sector is projected to register the highest CAGR during the forecast period. AI chipsets play a crucial role in advancing precision medicine and genomics by analyzing vast datasets and identifying genetic variations associated with diseases. These chipsets help healthcare providers deliver personalized treatments based on patients' genetic profiles, improving care outcomes.

AI chipsets also accelerate drug discovery and development by analyzing molecular structures, predicting drug interactions, and identifying potential candidates. This accelerates the drug discovery pipeline, reduces development costs, and brings new therapies to market faster.

Regional Insights
The global AI chipsets market is geographically segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, North America is expected to lead the market, accounting for 46% of the global share. The region benefits from the presence of key semiconductor companies, research institutions, and technology giants that have contributed to AI chip development. These companies invest heavily in research and development (R&D) to maintain a competitive edge, driving innovation in semiconductor design, AI algorithms, and manufacturing processes.

However, Asia-Pacific is projected to register the highest CAGR of 30% during the forecast period. The region has a large and diverse market, with growing demand for AI-powered applications in sectors like healthcare, automotive, and manufacturing. A vibrant startup ecosystem specializing in AI chip design and semiconductor manufacturing also fuels innovation and competition in this region. Additionally, governments and private enterprises in countries like China, India, and Japan are investing heavily in AI research and infrastructure. Initiatives such as China's "Made in China 2025," India's "India AI Mission," and Japan's "Society 5.0" are driving the adoption of AI technologies, including AI chipsets, across various industries.

Key Players

The key players operating in the global AI chipsets market include Advanced Micro Devices, Inc. (U.S.), Amazon.com, Inc. (U.S.), Baidu, Inc. (China), Broadcom Inc. (U.S.), Google LLC (U.S.), International Business Machines Corporation (U.S.), MediaTek Inc. (Taiwan), Intel Corporation (U.S.), Micron Technology, Inc. (U.S.), Microsoft Corporation (U.S.), NVIDIA Corporation (U.S.), QUALCOMM Incorporated (U.S.), Samsung Securities Co., Ltd. (South Korea), Toshiba Corporation (Japan), and SoftBank Group Corp. (Japan).

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Key Questions Answered in the Report:

What are the high-growth market segments in terms of offering, technology, and vertical?
What is the historical market size for the global AI chipsets market?
What are the market forecasts and estimates for 2024-2031?
What are the major drivers, restraints, opportunities, challenges, and trends in the global AI chipsets market?
Who are the major players in the global AI chipsets market, and what are their market shares?
What is the competitive landscape like?
What are the recent developments in the global AI chipsets market?
What are the different strategies adopted by major market players?
What are the trends and high-growth countries?
Who are the local emerging players in the global AI chipsets market, and how do they compete with other players?

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