Global AI server shipments expected to jump 36%

Despite market concerns, nine major cloud service providers, including US-based Google, Amazon, Meta, Microsoft, Oracle, and Chinese firms like ByteDance, Tencent, Alibaba, and Baidu, are expected to boost their combined capital expenditure by 60 percent to US$1.52 trillion next year, TrendForce research manager Frank Kung stated. This investment is anticipated to fuel a 92 percent growth in the AI server market, reaching US$919 billion and comprising 81 percent of the total server market value.

The supply chain for AI infrastructure is experiencing increased procurement and rising prices across components like memory chips and GPUs, Kung added. Nvidia is forecast to maintain its dominant position in AI server supply, with its Vera Rubin racks expected to account for about 70 percent of its total rack shipments next year, potentially surpassing the GB series in the second quarter. However, shipments of the next-generation Rubin Ultra platform are expected to be limited.

Amidst this growth, geopolitical factors appear to be influencing market dynamics. The Financial Times reported that Nvidia is directing its data center partners to scale back work with Chinese customers, requiring cloud computing clients to sell at least 51 percent of their services to non-Chinese entities for future contracts. Concurrently, MediaTek Inc. announced a new customer for its customized AI accelerator for data centers, explicitly noting this customer is not from China, which contrasts with earlier speculation linking ByteDance to the deal.