Artificial Intelligence (AI) Processor Market - Forecasts from 2024 to 2029

The artificial intelligence (AI) processor market is estimated to reach US$23.181 billion by 2029, growing at a CAGR of 17.47% from US$11.987 billion in 2024.

An AI processor is a type of specially developed processing unit that is used in various types of computing devices, like smartphones and personal computers. These processors help increase the computing devices' efficiencies, utilizing AI and ML functions. AI processors offer multiple advantages compared to other types of processors, as they offer faster computing capabilities and more accurate results. This processor also enables lower latency results.

Increasing investments in smart cities across various regions provide a great opportunity for artificial intelligence processor market players. Furthermore, growing investments in AI startups backed by multiple venture capitalists are also positively impacting market growth. A surge in demand for AI to be integrated into video surveillance and a rise in government spending for cybersecurity solutions integrated with real-time analytics and AI will further drive its demand during the forecast period. The growing emergence of quantum computing is another potential factor for the AI processors market expansion during the forecast period.

The increasing demand for AI-based applications worldwide is expected to propel the global AI processors market. Similarly, the introduction of new policies and investment opportunities in the AI technology sector by the governments of multiple countries, such as India, China, the UK, Japan, and the USA, is also forecasted to boost the AI processor market during the forecasted timeline.

Artificial intelligence processor market drivers

• Increasing demand for AI applications

The growing need for AI applications is an important factor influencing the artificial intelligence (AI) processor industry. Integrating AI technologies into several industries, including healthcare, finance, technology, and the automotive sector, has led to an increasing demand for specialized hardware that can manage the intricate processing demands of AI workloads. AI processors that effectively carry out activities linked to machine learning, deep learning, and other AI applications are essential to satisfy these expectations. With companies looking to use AI for activities like image recognition, natural language processing, and data analysis, the speed and efficiency provided by specialized AI processors become critical.

Artificial intelligence processor market geographical outlook

• North America is forecasted to hold a major share of the Artificial Intelligence Processor Market.

Geographically, the AI processor market is segmented into North America, South America, Europe, the Middle East, Africa (MEA), and Asia Pacific (APAC). North America accounted for the major market share in 2020 and is anticipated to remain in its position during the forecast period. Early adoption of new advanced technologies and the presence of major market players support the regional market growth. Increasing investments in artificial intelligence in countries such as the United States and Canada are also driving regional market expansion. In February 2020, California-based startup Pony.ai received funding of $462 million, out of which $400 million came from Toyota for autonomous driving.

The APAC market is also projected to witness a substantial CAGR during the forecast period due to the presence of major AI processor makers such as Samsung and Huawei in the region. Growing adoption of AI technology across various industry verticals such as automotive and transportation, healthcare, BFSI, and retail in countries such as South Korea, India, and China is significantly augmenting regional demand for these processors. Increasing investments in 5G and IoT technology are also spurring the regional market growth.

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Report Coverage:

• Historical data & forecasts from 2022 to 2029
• Growth Opportunities, Challenges, Supply Chain Outlook, Regulatory Framework, Customer Behaviour, and Trend Analysis
• Competitive Positioning, Strategies, and Market Share Analysis
• Revenue Growth and Forecast Assessment of segments and regions including countries
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The Artificial Intelligence Processor Market is segmented and analyzed as follows:

By Processor Type

• GPU
• ASIC
• FPGA
• Others

By Technology

• System-on-Chip
• Multi-Chip Module
• System-in-Package
• Others

By Processing Type

• Cloud
• Edge

By Industry Vertical

• BFSI
• IT and Telecom
• Healthcare
• Retail
• Media and Entertainment
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• China
• Japan
• South Korea
• India
• Thailand
• Indonesia
• Taiwan
• Others