New Delhi: The global AI hardware and software market is expected to reach $780 billion to $990 billion by 2027, growing at a CAGR of 40% to 55%, according to a report released Wednesday.
Larger data centers could cost between $10 billion and $25 billion within five years, according to a study by Bain & Company.
David CrawfordChairman of Bain’s global technology practice, said: Generative AI is the main driver of the current wave of change, but it is complicated by post-globalization changes and the need to adapt business processes to create value.
“Enterprises are moving beyond the experimentation phase and beginning to deploy generative AI at enterprise scale. As they do so, CIOs will need to maintain production-grade AI solutions that enable businesses to adapt to a rapidly changing landscape,” Crawford said.
Three key areas of opportunity – larger models and data centers, enterprise and sovereign AI initiatives, and software efficiencies and capabilities – could push the AI hardware and software market closer to a trillion-dollar industry in the next three years.
According to Bain, AI workloads could grow by 25 to 35 percent per year by 2027. As AI matures, the need for computing power will radically increase the scale of large data centers over the next five to ten years.
AI will drive the growth of data centers from the current 50 to 200 megawatts to over a gigawatt.
These changes are expected to have enormous impacts on the ecosystems that support data centers, including infrastructure engineering, power generation and cooling, and supply chains.
AI-driven surge in demand for graphics processing units (GPUs) could also increase total demand for some upstream components by 30% or more by 2026.
The advent of generative AI has increased pressure on software development companies to be more efficient. Generative AI appears to save about 10 to 15 percent of total software engineering time, according to the report.
