Worldwide HPC and AI 2023 Midyear 2023–2027 Forecast Update: Products and Services

November 23, 2023|Addison Snell, Dan Olds, Steve Conway

EXECUTIVE SUMMARY

This Intersect360 Research report presents an update to our previously published five-year forecast for the overall market for scalable, high-performance data center infrastructure for High Performance Computing (HPC) and artificial intelligence (AI), segmented into product and services categories, including servers, storage, services, software, networks, cloud, and other products. The forecast horizon is from 2023 through 2027, with compound annual growth rates (CAGRs) using 2022 as a base.

Our previous reports presented multiple views of the market for infrastructure for HPC and AI. This report focuses on the “expanded HPC-AI” view, which incorporates the growing effect of spending on scalable infrastructure for AI workloads that is not associated with an HPC budget, i.e., spending that only exists for the sake of machine learning, not HPC. This usually relates to the training of AI models, although in some cases we find scalable clustered systems used for AI inference.

Intersect360 Research defines HPC as the use of servers, clusters, and supercomputers—plus associated software, tools, components, storage, and services—for scientific, engineering, or analytical tasks that are particularly intensive in computation, memory usage, or data management. Additionally, this report tracks similar infrastructure for machine learning and deep learning.

Intersect360 Research reports available in the Market Model and Forecast series include the segmentations below. This revised midyear forecast presents an update to the Products and Services segmentation only. Clients of our HPC-AI market advisory service can get access to revisions of the other forecast segmentations by contacting Intersect360 Research.

Products and Services: servers, storage, networks, software, service, cloud, other
Vertical markets: academia, national security, national research labs, national agencies, state or local governments, bio sciences, chemical engineering, consumer product manufacturing, electronics, energy, financial services, large product manufacturing, media and entertainment, retail, transportation, other
Regions: North America, EMEA, Asia-Pacific, Latin America
Server class (HPC server revenue): entry-level, midrange, high-end, supercomputer
Cloud categories (HPC cloud revenue): raw cycles (IaaS), cloud storage, application hosting (SaaS), infrastructure hosting (PaaS), other
Software categories (HPC software revenue): system software, middleware, developer tools, storage software, application software, software as a service (SaaS), security software, other
Services categories (HPC services revenue): maintenance and repair, system engineering, system integration, training, programming services, managed services / consulting, security services, cloud enablement, other
HPC server market shares (total on-premises HPC and AI, current year only, not forecast)

This report focuses on updates to the five-year 2023-27 forecast for the expanded HPC-AI market. (For year-over-year comparisons of 2022 market performance versus 2021, please see previous reports.) The forecast update incorporates market indicators from the first half of 2023 to provide an updated five-year forecast through 2027. It includes the additive market effects of generative AI. Over the course of 2023, there has been tremendous enthusiasm around large language models (LLMs) and the systems to train them. We have analyzed both end-user survey data regarding AI adoption and prominent supplier revenue and bookings data for the first half of 2023.

Compared to our previous forecast, the revised forecast adds $8.5 billion of worldwide HPC-AI spending over the course of the five-year period. This additive revenue is concentrated in 2023 and 2024, corresponding to a near-term spike in spending related to generative AI, with a slight increase to the long-term market CAGR. The biggest effects are in the servers and cloud segments, due to the increase in GPU-heavy configurations, along with shortages in GPU supply relative to demand. With the increased demand, the cloud computing segment will see a tenth consecutive year of double-digit growth in 2024.

As previously reported, the HPC-AI market grew to $44.4 billion ($44,431 million) in 2022, up 11.3% from 2021. We now forecast the HPC-AI market at a 6.7% CAGR from 2022 through 2027, to reach $61.5 billion ($61,477 million) in 2027. This represents a higher five-year CAGR than the 6.3% in our previous forecast.

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