IDTechEx’s report, “AI Chips for Data Centres and Cloud 2025-2035: Technologies, Market, Forecasts”, projects that the AI chips market will reach US$473.2 billion by 2035 at a CAGR of 7.2% over the forecast period (2025-2035).
“Frontier AI attracts hundreds of billions in global investment, with governments and hyperscalers racing to lead in domains like drug discovery and autonomous infrastructure. Graphics processing units (GPUs) and other AI chips have been instrumental in driving this growth of artificial intelligence, providing the compute needed for deep learning within data centres and cloud infrastructure,” IDTechEx technology analyst Jameel Rogers wrote in the report.
AI chips market growth
Demand for LLMs, AI-driven infrastructure, government investment, and hyperscaler capex fuel this explosive market outlook.
The report reveals that GPUs, with an 82% share of the total AI chip revenue in 2024, are set to experience a significant surge in 2025. While GPUs currently dominate the market, they face challenges in terms of cost, efficiency, and specialisation. These limitations are creating opportunities for other types of AI chips to gain traction.
Custom AI chips
Companies like Google, AWS, and Microsoft are creating custom AI application-specific integrated circuits (ASICs) to reduce costs, optimise performance for specific workloads and avoid vendor lock-in.
Other accelerators are innovating with architectures like processing-in-memory, wafer-scale packaging, and tensor engines.
“Government policy and heavy investment show the prevalent interest in pushing frontier AI toward new heights, and this will require exceptional volumes of AI chips within AI data centres to meet this demand,” Rogers wrote.
