AI Market Poised to Reach $990 Billion by 2027, Driven by Rapid Growth in Computing Power
The global artificial intelligence (AI) market is set to experience remarkable growth, with projections estimating it could reach an impressive $990 billion by 2027. According to Bain & Company’s 5th Annual Global Technology Report, AI-related products and services are expected to expand at an annual growth rate (AGR) of 40-55%. The report highlights the substantial increase in AI workloads, which are anticipated to grow by 25-35% each year over the next few years.
As AI continues to evolve, the demand for computing power is expected to drive the expansion of large data centers over the next five to 10 years. Currently, data centers range between 50-200 megawatts, but AI could push this figure to more than a gigawatt in the coming years. Consequently, the costs for building such facilities may increase from today’s $1-4 billion to an estimated $10-25 billion within the next five years.
In addition to the growing need for data centers, the surge in AI development is expected to increase demand for advanced hardware such as graphics processing units (GPUs). Bain’s report predicts that upstream components, particularly those related to GPU production, could see a demand increase of 30% or more by 2026. Chip packaging components are also expected to nearly triple their production capacity to keep pace with the evolving requirements of the industry.
The disruptive growth of AI is anticipated to extend beyond hyperscale companies to smaller cloud service providers (CSPs), enterprises, and software vendors. Data management software is set to see a rise in demand as businesses prepare for the evolving requirements of generative AI. Furthermore, while tech services will remain crucial in the short term due to a skills gap in AI deployment and data modernization, a significant portion of these services may eventually be replaced by software over time.
AI’s transformative power is poised to reshape the tech industry, creating new opportunities and challenges in the years ahead.
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