What’s Behind The Growth Of AI Chips?

A $92 Billion Market In The Next Six Years



Steven Lerner
02/07/2019

As enterprises continue to leverage artificial intelligence (AI), the chips assigned to do AI-specific tasks are in high-demand.

The global AI chip market is expected to increase from just over $5 billion to nearly $92 billion by 2025. This is according to a report by Allied Market Research, which also pegged Asia-Pacific as the fastest growing regional buyer of the technology.

What’s Propelling The AI Demand?

There are numerous explanations behind the increase in AI and the chips that power AI systems. Some of the more notable reasons include:

The Emergence Of Smart Cities: With 65% of the world’s population projected to be living in urban areas by 2040, more cities are harnessing AI to improve living standards, collect data, and manage resources efficiently. Smart cities are automating numerous tasks that improve security, reduce traffic, and streamline sanitation collection. IDC predicts that smart city spending will reach $158 billion by 2022.

The Incorporation Of Quantum Computing: The quantum computing revolution is changing the way that enterprises solve complex problems. This technology allows organizations to exponentially increase computing power and to analyze data faster. The next advancements in the field of quantum computing involve the capabilities of AI.

Experiments In Smart Robotics: Accelerated research and development in smart robotics has also been a driving force behind the expanded use of AI chips. Previous robotics in the enterprise could only carry out one task at a time. With the inclusion of AI technology, smart robotics can learn and adapt to situations. This technology is revolutionizing manufacturing and other industries.

Machine Learning

One of the most impact subsets of AI has been machine learning. This method has already been a leading force behind the growth of the technology. It is a staple in industries such as financial services, health care, retail, and transportation. In the future, machine learning will expand to new capabilities. The report by Allied Marker Research cited speech recognition as one of the thriving uses of the technology. There are applications of it in offices, in higher education, in automobiles, and in medical facilities. As a result of these new uses, the demand for AI chips has increased.

Edge Computing

The materialization of edge computing in the enterprise has been one of the most interesting trends within AI. As the report explains, benefits of edge computing often include lower connectivity costs and enhanced mobility. With more edge technologies in the enterprise, the next step in the process is with AI. The newest chips contain powerful edge processing capabilities that enable more AI functions, such as facial recognition. This technology will reduce an enterprise’s reliance on the cloud and allow the functions to be accessed by remote workers on mobile devices.

The Potential Challenge

Finally, although the growth of AI chips is promising, there could be a potential roadblock to it. The scarcity of an AI-enabled workforce could restrain the emergence of the industry in the coming years. The AI skills gap is very real, and enterprises understand that this could be a significant vulnerability. This bodes well to workers with an AI skillset, but it could be troublesome for organizations that have more open positions than available talent. In addition to scrambling to find experienced data scientists and AI specialists for the IT department, enterprises also need to ensure that their business users are comfortable with using AI capabilities.

Senior IT leaders should keep an eye out on the development of the AI chip market. An increased market size serves as a reflection about the increased usage of AI in the enterprise.