Austin, Texas, USA, March 28, 2025
Futurum’s 4Q 2024 Analysis of the AI Processors and Accelerator for Data Center Market Shows Another Quarter of Sequential Growth Driven by Surging Demand for High-Performance Computing and AI-Driven Workloads
The AI chipset market within data centers experienced significant expansion in Q4 2024, with total revenue reaching $32.6 billion, reflecting a 22.2% quarter-over-quarter growth. The surge in demand for high-performance computing solidified GPUs as the primary revenue driver, contributing $28.52 billion and achieving a 24.8% growth rate, as shown in Figure 1. This trend highlights the increasing reliance on GPUs for AI workloads, fueled by advancements in deep learning, large-scale model training, and inference processing.
Figure 1: Q4 2024 Q/Q Growth Rates by Market Segment
Nvidia continues to dominate with its AI chipsets, accounting for 85% of the market share in the data center space, while AMD is a distant second with 6% of the market.
Richard Gordon, VP & Practice Lead for Semiconductors at Futurum, said, “The AI data center chipset market is witnessing unprecedented growth, driven by surging demand for high-performance computing and AI-driven workloads. NVIDIA continues to dominate, reporting a record-breaking $35.6 billion in its data center revenue in Q4 2024, a 93% year-over-year increase.”
Key findings from the report:
- Unprecedented Demand for AI-Optimized Compute: GPU is leading the revenue stream, generating $28.5B and accounting for 87.6% of the quarterly revenue from a product segment perspective, an increase of 24.8% Q/Q. Companies are beginning to turn to custom AI accelerators, such as AMD’s Instinct MI300X, Intel’s Gaudi3, and AWS Trainium2, to optimize AI workloads efficiently
- Rise of Custom Silicon Transforming the Market: The rise of custom silicon is transforming the AI chipset market as companies prioritize tailor-made accelerators over general-purpose GPUs for optimized performance and efficiency. Tech giants such as Google, Microsoft, and AWS are investing heavily in proprietary AI chips such as TPUs, Athena, Trainium2, and Microsoft’s Maia 100, reducing reliance on third-party suppliers such as NVIDIA.
- Supply Chain Diversification and Regional Manufacturing Investments: As AI demand surges, companies are diversifying their supply chains and ramping up regional manufacturing investments to reduce dependency on a single geography. NVIDIA, AMD, and Intel are expanding partnerships with TSMC, Samsung, and local foundries to ensure a stable supply of advanced AI chips.
“While showing strong growth, AMD faces challenges in closing the gap with NVIDIA,” noted Gordon. “The company’s Q4 data center revenue grew 69% year-over-year to $3.86 billion yet fell short of market expectations, highlighting concerns over its ability to compete in the AI acceleration space.”
Read more in the report: “Q4 2024 AI Processors and Accelerators for Data Center SpotCheck Report” on the Futurum Intelligence Platform.
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Other insights from The Futurum Group:
Broadcom Q1 FY 2025: AI and Software Power 25% Revenue Growth
Marvell Q4 FY 2025 Reports 27% Revenue Growth, AI Custom Chips Drive Momentum
Nvidia Q4 FY 2025: AI Momentum Strengthens Despite Margin Pressures
Author Information
Richard Gordon is Vice President & Practice Lead, Semiconductors for The Futurum Group. He has been involved in the semiconductor industry for more than 30 years, first in engineering and then in technology and market research, industry analysis, and business advisory.
For many years, Richard led Gartner's Semiconductor and Electronics practice, building a 20-person global team covering all aspects of semiconductor industry research, from manufacturing to chip markets and end applications. Having served on Gartner's Senior Research Board and as Gartner's Chief Forecaster, Richard has extensive experience in developing and implementing methodologies for market sizing, share and forecasting, to deliver data, analysis and insights about the competitive landscape, technology roadmaps, and market growth drivers.
Richard is a sought-after technology industry analyst, both as a trusted advisor to clients and also as an expert commentator speaking at industry events and appearing on live TV shows such as CNBC.
