Data Center Accelerator Market by Processor (GPU, CPU, ASIC, FPGA), Type (Cloud Data Center, HPC Data Center), Application (Deep Learning Training, Enterprise Inference), End-user (IT & Telecom, Healthcare, Energy) and Region - Global Forecast to 2029
[250 Pages Report] The global data center accelerator market was valued at USD 109.9 billion in 2024 and is projected to reach USD 372.9 billion by 2029; it is expected to register a CAGR of 27.7% during the forecast period. The Growing demand for cloud-based services and surging adoption of deep learning technology in big data analytics are attributed to the ever-increasing demand for data center accelerator system.
Data Center Accelerator Market Forecast to 2029
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Market Dynamics:
Driver: Increasing data volumes and pressing need for fast and efficient data processing
The exponential growth in data volume is significantly facilitating the development and adoption of data center accelerators, such as graphics processing units (GPUs), field-programmable gate arrays (FPGAs), and application-specific integrated circuits (ASICs). These accelerators are designed to handle specialized and intensive computational tasks more efficiently than traditional central processing units (CPUs). The immense volume of data generated by social media platforms, IoT devices, online transactions, video streaming, and various other sources necessitates the processing power that these accelerators provide.
The sheer volume and complexity of data require robust computational power to perform real-time data analysis, machine learning (ML), and artificial intelligence (AI) tasks. GPUs, for instance, are highly effective in parallel processing, which is essential for training deep learning (DL) models. This parallelism allows for faster processing of large datasets, leading to quicker insights and decision-making capabilities. As AI and ML applications become more prevalent, the demand for GPUs in data centers continues to rise, driving advancements in GPU technology and their integration into data center infrastructures.
Additionally, the need for low latency and high-throughput data processing in modern applications is another critical factor. Real-time applications such as autonomous vehicles, financial trading, and healthcare diagnostics depend on rapid data processing and immediate response times. FPGAs and ASICs are particularly designed for real-time applications as they can be customized for specific tasks and provide lower latency and higher efficiency than general-purpose CPUs. These specialized hardware solutions enable data centers to meet the demands of modern applications and services by providing high throughput, minimal latency, scalability, and energy efficiency.
Moreover, the advent of edge computing, which aims to bring computation and data storage closer to the location where it is needed, further drives the need for efficient data center accelerators. With the rise in data generation at the edge, from smart devices and sensors, there is a growing need for local data processing to minimize latency and bandwidth usage. Data center accelerators are key in enabling powerful computation capabilities within smaller, localized data centers or even on-the-edge devices themselves.
Restraint: Premium pricing of accelerators
The growing use of AI in different industries has raised consumer expectations of AI technologies. However, the non-availability of affordable and energy-efficient hardware products, especially computing hardware, is slowing down the development of dedicated AI hardware, including deep learning accelerators. Manufacturers of accelerators many times unable to meet the demand due to the high complexity and cost of producing these specialized chips. Limited supply relative to demand can drive up prices, especially during periods of high demand for AI and HPC applications.
The increasing adoption of AI across industries, coupled with the growing need for high-performance computing solutions, drives the demand for accelerators. This demand-side pressure allows manufacturers to maintain premium pricing.
Various AI technologies built to date have failed to make a larger impact on the AI market. Owing to the high cost of data center accelerators from NVIDIA and Tesla companies, most data center manufacturers are reluctant to adopt them. For cloud server inference applications, numerous FPGAs are developed to enhance security and fast computing; however, technical constraints and the high cost of reliable mechanical devices are curbing data center accelerator adoption.
Non-availability of energy-efficient hardware is a major constraint impeding the growth of the AI market. Numerous hardware manufacturing companies are working to create AI chips that can mimic the functions of the human brain and execute tasks in the cloud. However, recent advancements have highlighted the substantial power consumption of these AI chips, ranging between 50 and 75 watts. This puts them at risk of generating significant heat during prolonged use in AI applications.
Opportunity: Proliferation of MLaaS offerings
Machine learning is a subset of artificial intelligence. These algorithms are useful in many applications designed to eliminate human tasks and work independently. Deep machine learning is used to examine massive datasets, identify patterns, and outline the human interface based on the data. Data centers are equipped with sensors to filter out and provide historical data. Many research centers apply ML and AI to their historical data to improve efficiency and productivity.
The increasing demand for AI has led to a rise in the number of companies offering machine learning for cloud services. As a result, the adoption of cloud-based technology is increasing, which, in turn, is creating growth opportunities for data center accelerator market players.
Deep learning is projected to witness high demand, and machine learning-powered systems can contribute to predictive and preventive maintenance. These systems can enhance cooling efficiency, improve energy efficiency, and control temperature and cooling systems, thereby optimizing energy consumption. This is particularly important as electricity costs are crucial for data center infrastructures.
Machine learning can also be used to monitor network congestions, server performance, and disk utilization and help detect and envisage data outages. Thus, the machine learning revolution can enhance data center infrastructure and facilitate more intelligent and automated data management. Machine Learning as a Service (MLaaS) refers to a collection of cloud-based tools designed to assist data scientists and data engineers in their everyday work, similar to how cloud-based office suites have transformed office environments. These MLaaS tools facilitate collaboration, version control, parallelization, and other processes that would otherwise be cumbersome.
Challenge: Unreliability of AI algorithms
AI is implemented through machine learning using a computer to run specific software that can be trained. Machine learning can help systems process data with the help of algorithms and identify certain features from that dataset. As AI applications grow increasingly complex and data-intensive, the performance and accuracy of AI models become critical. However, inconsistencies in algorithmic predictions can lead to inefficiencies and errors, undermining the reliability of data center operations. These issues are exacerbated by the diverse and dynamic nature of data sets, which can further impact the stability of AI-driven processes. Consequently, ensuring robust and dependable AI algorithms is essential for the effective deployment of accelerators in data centers, necessitating ongoing advancements in algorithmic development and validation to maintain operational integrity and trustworthiness.
Data center accelerator Market Ecosystem
Prominent companies in this market include well-established, financially stable data center accelerator systems providers such as NVIDIA Corporation (US), Advanced Micro Devices, Inc (US), Intel Corporation (US), Alphabet Inc. (US), Qualcomm Technology, Inc. (US). These companies have been operating in the market for several years and possess a diversified product portfolio and strong global sales and marketing networks. Along with the well-established companies, there are a large number of small and medium companies operating in this market, such as Graphcore (UK), and SambaNova Systems, Inc. (US)
By application, enterprise inference segment is expected to grow with the highest CAGR from 2024 to 2029.
The enterprise inference segment is expected to record the highest CAGR of 45.8% during the forecast period. The growth of the segment can be attributed to the integration of AI and ML data processing capabilities, allowing enterprises to analyze large datasets more efficiently and accurately. The adoption of cloud computing also plays a crucial role by providing a scalable and flexible infrastructure for data storage and analysis. Additionally, advancements in big data analytics tools enable more sophisticated and nuanced interpretations of data.
By end-user, healthcare segment is expected to grow with the highest CAGR in 2029.
The healthcare segment is expected to exhibit the highest CAGR of 31.8% during the forecast. The exponential growth in healthcare data, driven by electronic health records (EHRs), medical imaging, genomic data, and wearable devices, necessitates advanced computational power for efficient processing and analysis. Also, the rise of artificial intelligence (AI) and machine learning (ML) applications in healthcare, such as predictive analytics, personalized medicine, and diagnostic imaging, requires high-performance computing infrastructure to train complex models and deliver real-time insights.
In 2029, North America is projected to hold the highest CAGR of the overall data center accelerator market.
Data Center Accelerator Market by Region
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In 2029, The data center accelerator market in Asia Pacific is expected to grow at the highest CAGR. The growing trend of cloud computing has radically increased the economic impact of data center investments made by leading service providers such as Amazon.com, Inc. (US), Meta Platforms, Inc. (US), Google LLC (US), and Microsoft Corporation (US). The competition for data center projects has increased dramatically in North America. North American enterprises and research institutions are at the forefront of AI and machine learning research and applications.
Key Market Players
NVIDIA Corporation (US), Advanced Micro Devices, Inc (US), Intel Corporation (US), Alphabet Inc. (US), Qualcomm Technology, Inc. (US), Micron Technology, Inc. (US), IBM Corporation (US), Marvell (US), Achronix Semiconductor Corporation (US), Dell Inc. (US) are some of the key players in the data center accelerator Companies.
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Report Metric |
Details |
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Market Size Availability for Years |
2020–2029 |
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Base Year |
2023 |
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Forecast Period |
2024–2029 |
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Forecast Units |
Value (USD Million/Billion) |
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Segments Covered |
By processor, type, application, end-user, and region |
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Geographies Covered |
North America, Europe, Asia Pacific, and RoW |
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Companies Covered |
NVIDIA Corporation (US), Advanced Micro Devices, Inc (US), Intel Corporation (US), Alphabet Inc. (US), Qualcomm Technology, Inc. (US), Micron Technology, Inc. (US), IBM Corporation (US), Marvell (US), Achronix Semiconductor Corporation (US), Dell Inc. (US) are some of the key players in the data center accelerator market. |
Data Center Accelerator Market Highlights
This research report categorizes the data center accelerator market based processor, type, application, end-user, and region.
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Segment |
Subsegment |
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By Processor |
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By Application |
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By Type |
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By End-users |
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By Region |
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Recent Developments
- In June 2024, AMD introduced next generation "Zen 5" Ryzen processors, which are designed to power advanced AI experiences. The Ryzen AI 300 Series processors feature the world's most powerful Neural Processing Unit (NPU) for next-gen AI PCs..
- In May 2024, NVIDIA Corporation collaborated with Microsoft to help developers build and deploy AI applications faster by delivering new optimizations and integrations for Windows developers.
- In April 2023, Micron Technology, Inc. has introduced the Micron 4150AT SSD, a groundbreaking automotive-grade storage solution designed for intelligent vehicles. This SSD is the world's first quad-port SSD, offering a PCIe Gen 4 interface, ruggedized automotive design, and impressive random read/write IOPS capabilities, making it suitable for diverse systems in vehicles like advanced driver-assistance systems (ADAS) and in-vehicle infotainment (IVI).
- In March 2024, NVIDIA Corporation introduced NVIDIA Blackwell. This platform introduces a new era of computing power with its Blackwell GPU architecture, featuring six transformative technologies for accelerated computing. New accelerators facilitate breakthroughs in data processing, engineering simulation, electronic design automation, computer-aided drug design, and quantum computing.
- In October2023, Micron Technology, Inc. partnered with AMD to provide memory solutions for various systems, including DDR4 and DDR5 systems with AMD EPYC processors. Micron's DDR5 RDIMM solutions have been validated for different densities, and they offer superior power efficiency compared to competitors..
- In October 2023, IBM acquired Manta Software Inc., a data lineage platform, to complement its data and AI governance capabilities within watsonx.ai, watsonx.data, and watsonx.governance. This acquisition aims to help businesses ensure trust and transparency in their products by providing visibility into data environments, data flows, sources, transformations, and dependencies.
Frequently Asked Questions (FAQs):
Which are the major companies in the data center accelerator market? What are their major strategies to strengthen their market presence?
The major companies in the data center accelerator market are – NVIDIA Corporation (US), Advanced Micro Devices, Inc (US), Intel Corporation (US), Alphabet Inc. (US), Qualcomm Technology, Inc. (US), Micron Technology, Inc. (US), IBM Corporation (US), Marvell (US), Achronix Semiconductor Corporation (US), Dell Inc. (US) and the major strategies adopted by these players are product launches and developments.
What is the data center accelerator?
A data center accelerator is a hardware component that boosts the performance of specific tasks within a data center. Think of it like a turbocharger for your computer, but for data centers that handle massive amounts of information.
Who are the winners in the global data center accelerator market?
Companies such as NVIDIA Corporation (US), Advanced Micro Devices, Inc (US), Intel Corporation (US), Alphabet Inc. (US), Qualcomm Technology, Inc. (US) fall under the winner’s category. These companies cater to the requirements of their customers by providing data center accelerator systems. Moreover, these companies are highly adopting inorganic growth strategies to strengthen their global market position and customer base.
What are the drivers and opportunities for the data center accelerator market?
The Increasing data volumes and pressing need for fast and efficient data processing is the driver, and Emergence of FPGA-based accelerators is the opportunity in the data center accelerator market
What are the restraints and challenges for the data center accelerator market?
Premium pricing of accelerators and Unreliability of AI algorithms are the restraints and challenges in the data center accelerator market.
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The study involved four major activities in estimating the size of the data center accelerator market. Exhaustive secondary research has been carried out to collect information on the market, the peer markets, and the parent market. Both top-down and bottom-up approaches have been employed to estimate the total market size. Market breakdown and data triangulation methods have also been used to estimate the market for segments and subsegments.
Secondary Research
Revenues of companies offering data center accelerator systems have been obtained from the secondary data available through paid and unpaid sources. The revenues have also been derived by analyzing the product portfolio of key companies, and these companies have been rated according to the performance and quality of their products.
In the secondary research process, various sources have been referred to for identifying and collecting information for this study on the data center accelerator market. Secondary sources considered for this research study include government sources, corporate filings, and trade, business, and professional associations. Secondary data has been collected and analyzed to arrive at the overall market size, which has been further validated through primary research.
Secondary research has been mainly used to obtain key information about the supply chain of data center accelerator systems to identify key players based on their products and prevailing industry trends in the data center accelerator market by processor, type, application, end-user, and region. Secondary research also helped obtain market information- and technology-oriented key developments undertaken by market players to expand their presence and increase their market share.
Primary Research
Extensive primary research has been conducted after understanding and analyzing the current scenario of the data center accelerator market through secondary research. Several primary interviews have been conducted with the key opinion leaders from the demand and supply sides across four main regions—North America, Europe, Asia Pacific, and the Rest of Europe. Approximately 25% of the primary interviews were conducted with the demand-side respondents, while approximately 75% were conducted with the supply-side respondents. The primary data has been collected through questionnaires, emails, and telephone interviews.
After interacting with industry experts, brief sessions were conducted with highly experienced independent consultants to reinforce the findings from our primary. This, along with the in-house subject matter experts’ opinions, has led us to the findings as described in the remainder of this report. The breakdown of primary respondents is as follows:
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
The bottom-up procedure has been employed to arrive at the overall size of the data center accelerator market.
- Initially, more than 35 companies offering data center accelerators were identified. Their offerings were mapped based on type, processor, and application.
- After understanding the different types of data center accelerators offered by various manufacturers, based on the data gathered through primary and secondary sources, the market was categorized into different segments.
- To derive the global data center accelerator market, global server shipments of top players for each device type that were considered in the scope of the report were tracked.
- A suitable penetration rate was assigned for the shipment of each of these device types to derive the shipments of data center accelerators.
- Using the average selling price (ASP) at which a particular company offers its devices, we derived the data center accelerator market based on different device types. The ASP of each device was identified based on secondary sources and validated from primaries.
- For the projected market values of each of the device types, the Y-o-Y projections showed a steep growth initially until 2019. COVID-19 has not impacted market much and it is expected that market will grow positively during forecast period. The market is expected to witness a sharp ascent, thereafter, considering the demand for data center accelerator for different applications.
- For the CAGR, the market trend analysis was carried out by understanding the industry penetration rate and the demand and supply of data center accelerators in different applications.
- We also tracked the data center accelerator market through the data sanity method. The revenues of more than 25 key providers were analyzed through annual reports and press releases and summed to derive the overall market.
- For each company, a percentage is assigned to its overall revenue or, in a few cases, segmental revenue, to derive its revenue for the data center accelerator. This percentage for each company is assigned based on the company’s product portfolio and its range of data center accelerator offerings.
- Verifying and crosschecking the estimates at every level by discussing with key opinion leaders, including CXOs, directors, and operation managers, and then finally with the domain experts at MarketsandMarkets
- Studying various paid and unpaid sources of information, such as annual reports, press releases, white papers, and databases
The top-down approach has been used to estimate and validate the total size of the data center accelerator market.
- The global market size of data center accelerators was estimated through the data sanity of 35 major companies.
- The growth of the data center accelerator market witnessed an upward slope trend during the studied period, as it is currently in the initial stage of the product cycle, with major players beginning to expand their business into various application areas of the market.
- Types of data center accelerators, their features and properties, geographical presence, and key applications served by all players in the data center accelerator market were studied to estimate and arrive at the percentage split of the segments.
- Different types of data center accelerators and their penetration for the end-use applications were also studied.
- The market split for data center accelerator by type, processor, and application based on secondary research was estimated.
- The demand generated by companies operating in different application segments of the end-use application was analyzed.
- Multiple discussions with key opinion leaders across major companies involved in the development of data center accelerator and related components were conducted to validate the market split of type, product, and application.
- The regional splits were estimated using secondary sources, based on factors such as the number of players in a specific country and region and the adoption and use cases of each implementation type with respect to applications in the region
Data Triangulation
After arriving at the overall market size-using the market size estimation processes as explained above—the market has been split into several segments and subsegments. To complete the entire market engineering process and arrive at the exact statistics of each market segment and subsegment, data triangulation and market breakdown procedures have been employed, wherever applicable. The data has been triangulated by studying various factors and trends from the demand and supply sides in the data center accelerator market.
Market Definition
Data center acceleration refers to the use of specialized hardware and software to enhance the performance, efficiency, and capabilities of data centers. This typically involves deploying accelerators such as Graphics Processing Units (GPUs), Field-Programmable Gate Arrays (FPGAs), and Application-Specific Integrated Circuits (ASICs) alongside traditional Central Processing Units (CPUs). These accelerators are designed to handle specific tasks more efficiently than general-purpose CPUs, such as data processing, artificial intelligence (AI) workloads, machine learning (ML), and big data analytics. By offloading these intensive tasks to accelerators, data centers can achieve faster processing times, lower latency, and reduced power consumption, leading to overall improved performance and cost savings. This acceleration is critical in modern data centers, which must manage increasing volumes of data and complex computational tasks while maintaining high levels of performance and energy efficiency.
Key Stakeholders
- NGOs, Governments, Investment Banks, Venture Capitalists, and Private Equity Firms
- Telecom Services Providers
- Original Equipment Manufacturers
- Value-added Service Providers
- Data Center Operators
- Software Developers
- Data Center Colocation Service Providers
- System Integrators
- Cloud Service Providers
- Colocation Service Providers
Report Objectives
- To define, describe, segment, and forecast the data center accelerator market, by processor, type, application, and end-user, in terms of value
- To forecast the market for processor, in terms of volume
- To describe and forecast the market for various segments, with respect to four main regions, namely, North America, Europe, Asia Pacific, and the Rest of the World (RoW), in terms of value
- To forecast and compare the market size of pre-recession with that of the post-recession at the regional level
- To provide detailed information regarding drivers, restraints, opportunities, and challenges influencing the growth of the data center accelerator market
- To provide a detailed overview of the data center accelerator market’s supply chain, along with the ecosystem, technology trends, use cases, regulatory environment, and Porter’s five forces analysis for the market
- To analyze industry trends, pricing data, patents and innovations, and trade data (export and import data) related to the data center accelerators.
- To strategically analyze the micromarkets1 with respect to individual growth trends, prospects, and contributions to the total market
- To strategically profile the key players and comprehensively analyze their market share and core competencies2
- To analyze opportunities for stakeholders and provide a detailed competitive landscape of the market
- To analyze competitive developments, such as product launches/developments, collaborations, partnerships, acquisitions, and research & development (R&D) activities, carried out by players in the data center accelerator market
- To profile key players in the data center accelerator market and comprehensively analyze their market ranking based on their revenue, market share, and core competencies2
Available Customizations
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:
- Detailed analysis and profiling of additional market players based on various blocks of the supply chain
Generating Response ...
Growth opportunities and latent adjacency in Data Center Accelerator Market