Market Overview
The global Artificial Intelligence Chip Market was valued at USD 23.7 Billion in 2024. It is projected to reach USD 173.5 Billion by 2033, growing at a CAGR of 24.8% during the forecast period of 2025-2033. The market growth is supported by increased AI adoption across industry verticals, emphasizing energy-efficient and high-performance processors primarily deployed in edge computing and consumer electronics.
Study Assumption Years
- Base Year: 2024
- Historical Year/Period: 2019-2024
- Forecast Year/Period: 2025-2033
Artificial Intelligence Chip Market Key Takeaways
- The global artificial intelligence chip market size was valued at USD 23.7 Billion in 2024.
- The market is forecast to exhibit a CAGR of 24.8% during 2025-2033.
- North America holds approximately 32.1% of the market share in 2024.
- ASICs represent the largest chip type segment with around 34.3% market share in 2024.
- System-on-chip (SoC) technology leads with about 48.8% market share in 2024.
- Edge processing dominates with about 63.6% market share in 2024.
- Natural Language Processing (NLP) application holds around 28.2% market share in 2024.
- Healthcare is the leading industry vertical with a 19.9% market share in 2024.
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Market Growth Factors
Artificial intelligence chips are becoming more and more sought after as AI continues to weave its way into automotive technology. These chips are the brains behind advanced driver-assistance systems, self-driving features, and in-car entertainment. With the rise of electric and autonomous vehicles that depend on AI for peak performance, the demand for these chips is only set to grow, especially for tasks like real-time object detection and navigation.Â
Energy efficiency is a major priority in the development of AI chips, especially as the complexity of AI tasks is expected to surge by 25-35% each year until 2027. The market for AI workloads is projected to balloon to between USD 780-990 billion, which only heightens the need for energy-efficient chips that can operate on low power while minimizing costs and environmental impact. Innovations like dynamic voltage scaling and improved cooling systems enable these chips to tackle demanding tasks, particularly in data centers and battery-powered edge devices.
We’re also seeing a significant uptick in the use of AI chips in consumer electronics, including smartphones, wearables, smart home gadgets, and gaming consoles. Features such as real-time voice recognition, sophisticated image processing, and tailored recommendations all depend on AI-driven processors. The growth of India’s electronics sector to USD 155 billion in FY23 highlights this trend, fueled by a rising consumer appetite for smart and responsive devices.
Market Segmentation
By Chip Type:
- GPU
- ASIC: Largest segment in 2024 with 34.3% share, offering unparalleled performance, energy efficiency, and customization for targeted AI workloads in industries like autonomous vehicles, healthcare, and finance.
- FPGA
- CPU
- Others
By Technology:
- System-on-Chip (SoC): Market leader in 2024 with 48.8% share, integrates multiple components onto a single chip, enabling compact, efficient, and high-performance AI computing especially in edge devices, smartphones, and IoT.
- System-In-Package (SIP)
- Multi-Chip Module
- Others
By Processing Type:
- Edge: Dominates with 63.6% market share in 2024, enables near-source data analysis reducing latency, crucial for IoT devices, autonomous systems, and industrial automation requiring fast real-time decision-making.
- Cloud
By Application:
- Natural Language Processing (NLP): Largest share at 28.2% in 2024, drives demand across customer service, healthcare, and finance sectors with virtual assistants, chatbots, and language translation.
- Robotics
- Computer Vision
- Network Security
- Others
By Industry Vertical:
- Healthcare: Leading segment with 19.9% market share in 2024, AI chips enable diagnostic imaging, personalized medicine, drug discovery, and telemedicine, promoting real-time data processing and improved patient care.
- Media and Advertising
- BFSI
- IT and Telecom
- Retail
- Automotive and Transportation
- Others
Regional Insights
North America leads with approximately 32.1% market share in 2024. The region benefits from a strong technology ecosystem, substantial R&D funding, early adoption of AI technologies, and leadership from major semiconductor and AI chip companies. Government initiatives and investments in AI startups further reinforce North America’s dominant position in the AI chip market.
Recent Developments & News
- November 2024: Amazon is preparing to unveil custom AI chips for cloud computing to address supply challenges and enhance cloud service competitiveness.
- November 2024: Huawei targets early 2025 mass production of a next-generation AI chip, emphasizing technological self-reliance amid geopolitical tensions.
- October 2024: OpenAI partners with Broadcom to produce its first proprietary AI chip, shifting from foundry ambitions and leveraging TSMC production.
- September 2024: Intel launches advanced AI chips with enhanced processing capabilities, while rumors of acquisitions intensify.
- August 2024: AI startup Krutrim announces plans for Bodhi 1 AI chip launch by 2026 and Bodhi 2 in 2028, partnering with Arm and Untether AI, and scaling data center capacity.
Key Players
- Advanced Micro Devices Inc.
- Huawei Technologies Co. Ltd.
- Intel Corporation
- LG Electronics Inc. (LG Corporation)
- Mediatek Inc.
- Micron Technology Inc.
- Mythic Inc.
- Nvidia Corporation
- NXP Semiconductors N.V.
- Qualcomm Technologies Inc
- SK hynix Inc.
- Toshiba Corporation
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