Research Roundup: AI chip sales, AI data centers, sustainability services, manufacturing clouds, tech-savvy or not

  • August 31, 2023 | Author: Peter Krass
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Sales of AI semiconductors are poised for big growth. AI is transforming the data center. Sustainability services are hot. Manufacturers are saving big money with cloud. And Americans are surprisingly lacking in tech understanding.

That’s some of the latest IT market research. And here’s your Performance Intensive Computing roundup.

AI chip sales to rise 21% this year

Sales of semiconductors designed to execute AI workloads will rise this calendar year by 20.9% over last year, reaching a worldwide total of $53.4 billion, predicts research firm Gartner.

Looking further ahead, Gartner expects worldwide sales of AI chips in 2024 to reach $67.1 billion, a 25% increase over the projected figure for this year.

And by 2027, Gartner forecasts, those sales will top $119 billion, or more than double this year’s market size.

What’s behind the rapid rise? Two main factors, says Gartner: Generative AI, and the spread of AI-based applications in data centers, edge infrastructure and endpoint devices.

AI transforming data centers

Generative AI is transforming the data center, says Lucas Beran, a market analyst with Dell’Oro Group. Last month, his research group predicted that AI infrastructure spending will propel the data center CapEx to over a half-trillion dollars by 2027, an increase of 15%. (That figure is larger than Gartner’s because it includes more than just chips.) Now Dell’Oro says AI is ushering in a new era for data center physical infrastructure.

Here’s some of what Beran of Dell’Oro expects:

  • Due the substantial power consumption of AI systems, end users will adopt intelligent rack power distribution units (PDUs) that can remotely monitor and manage power consumption and environmental factors.
  • Liquid cooling will come into its own. Some users will retrofit existing cooling systems with closed-loop assisted liquid cooling systems. These use liquid to capture heat generated inside the rack or server, then blow it into a hot aisle. By 2025, global sales of liquid cooling systems will approach $2 billion.
  • A lack of power availability could slow AI adoption. Data centers need more energy than utilities can supply. One possible solution: BYOP – bring your own power.

Sustainability services: $65B by 2027

Speaking of power and liquid cooling, a new forecast from market researcher IDC has total sales of environmental, social and governance (ESG) services rising from $37.7 billion this year to nearly $65 billion by 2027, for a compound annual growth rate (CAGR) of nearly 15%.

For its forecast, IDC looked at ESG services that include consulting, implementation, engineering and IT services.

These services include ESG strategy development and implementation, sustainable operations consulting, reporting services, circularity consulting, green IT implementation services, and managed sustainability performance services. What they all share is the common goal of driving sustainability-related outcomes.

Last year, nearly two-thirds of respondents surveyed by IDC said they plan to allocate more than half their professional-services spending on sustainability services. Looking ahead, IDC expects that to rise to 60% by 2027.

"Pressure for [ESG] change is more prescient than ever,” says IDC research analyst Dan Versace. “Businesses that fail to act face risk to their brand image, financial performance, and even their infrastructure due to the ever-present threat of extreme weather events and resource shortages caused by climate change.”

Manufacturers finally see the cloud

For manufacturers, IT is especially complicated. Unlike banks and other purely digital businesses, manufacturers have to tie IT systems and networks with physical plants and supply chains.

That’s one reason why manufacturers have been comparatively slow to adopt cloud computing. Now that’s changing. In part, as a new report from ABI Research points out, because manufacturers that switch to cloud-based systems can enjoy up to 60% reductions in overhead costs relating to data storage, says James Iversen, an ABI industry analyst.

Iversen predicts that industrial cloud platform revenue in manufacturing will enjoy a nearly 23% CAGR for the coming decade.

Another benefit for manufacturers: The cloud can eliminate the data fragmentation common with external data warehouses. “Cloud manufacturing providers are eliminating these concerns by interconnecting applications bi-directionally,” Iversen says, “leading to sharing and communication between applications and their data.”

How tech-savvy are your customers?

If they’re like most Americans, not very.

A Pew Research Center poll of about 5,100 U.S. adults, conducted this past spring and just made public, found that fewer than a third (32%) knew that large language models such as ChatGPT produce answers from data already published on the internet.

Similarly, only about one in five (21%) knew that U.S. websites are prohibited from collecting data on minors under the age of 13.

Fewer than half of those polled (42%) knew what a deepfake is. And only a similar minority (48%) could identify an example of two-factor authentication.

What tech info do they know? Well, 80% of respondents correctly identified Elon Musk as the boss of Tesla and Twitter (now X). And nearly as many (77%) knew that Facebook had changed its name to Meta.


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