EXECUTIVE SUMMARY
This Intersect360 Research report presents the 2023 total market size and five-year forecast for the overall market for the on-premises or colocated (i.e., non-cloud) servers and systems used for High Performance Computing (HPC) and artificial intelligence (AI), segmented into server classes. The primary consideration for server class is sales price—entry-level HPC systems under $50K, midrange HPC systems from $50K to $250K, high-end HPC systems from $250K to $1.5 million, and supercomputers over $1.5 million—although architecture, sales channel, and sales cycle are all additional considerations. The forecast horizon is from 2024 through 2028, with compound annual growth rates (CAGRs) using 2023 as a base.
In general, the HPC-AI market includes multi-node, networked systems or cloud instances running parallel applications, which require a focus on performance or scalability in some dimension (e.g., processing, memory, I/O, networking), plus associated storage, software, networks, services, and other necessary components. The market size does not include spending on internal budget items such as power consumption or staffing; these are tracked in separate surveys. This methodology also does not include single-node desktops or workstations, embedded computing, or other edge devices.
A major component of the HPC-AI market is AI-focused infrastructure purchased by hyperscale organizations. Hyperscale companies are those with internet-driven business models, spending hundreds of millions to billions of dollars per year in total IT infrastructure. Amazon, Apple, Google, Meta, and Microsoft are the largest examples, but the hyperscale segment also includes non-U.S. companies such as Alibaba, ByteDance, Naver, and Tencent, as well as new AI-focused cloud services such as CoreWeave, Denvr Dataworks, and Lambda. The hyperscale segment is excluded from the analysis of server classes that is the focus of this report. Hyperscale AI infrastructure would be almost 100% attributable to the supercomputer segment.
Outside of hyperscale, many organizations utilize public cloud resources for HPC-AI. In these cases, the relevant infrastructure sits with the relevant hyperscale companies. We additionally track the cloud computing spending on HPC-AI as part of the HPC-AI market.
Intersect360 Research reports available in this series include the following segmentations of the non-hyperscale portion of the market:
- Products and Services: servers, storage, networks, software, service, cloud, other
- Vertical markets: academia, national security, national research labs, national agencies, state or local governments, bio sciences, chemical engineering, consumer product manufacturing, electronics, energy, financial services, large product manufacturing, media and entertainment, retail, transportation, other (presented both with and without hyperscale as a vertical market)
- Regions: Americas, EMEA, Asia-Pacific
- Server class (HPC-AI server revenue): entry-level, midrange, high-end, supercomputer
- HPC-AI server vendor market shares (total on-premises HPC-AI, current year only, not forecast)
The merged HPC-AI market soared to $85.7 billion in 2023, up 62.4% year-over-year, due predominantly to spending by hyperscale companies on their AI infrastructure nearly tripling from 2022. The on-premises HPC-AI infrastructure market grew steadily, up 7.1% from 2022. 2023 was the first year in which hyperscale companies’ spending on AI instructure exceeded the entirety of spending for on-premises infrastructure for HPC-AI.
Non-hyperscale HPC-AI spending, including the use of cloud computing for HPC-AI, increased 9.0% to $48.4 billion in 2023. The largest component of this is on-premises HPC-AI servers (including co-located systems; “on-premises” in this context is used to mean “non-cloud”). Fueled by more expensive configurations that incorporate GPUs for AI workloads, spending on on-premises HPC-AI servers grew by 11.6% year-over-year, reaching $14.1 billion in 2023. This growth was particularly concentrated to the supercomputing and high-end segments. The entry-level segment even saw a slight decline, as cloud computing draws more heavily from the lower end of the HPC-AI market.
As AI enthusiasm continues, we forecast the non-hyperscale HPC-AI market to surge to double-digit growth in 2024 before sliding back in 2025 as supply catches up to demand. The market will return to steady, single-digit growth beginning in 2026. Reversing the trend from 2023, on-premises HPC-AI server growth will be strongest in the lower-end segments, as cloud computing nears its maximum penetration of HPC-AI and more organizations opt for on-premises computing.
TABLE OF CONTENTS
EXECUTIVE SUMMARY 2
TABLE OF CONTENTS 4
INTRODUCTION 6
What Are HPC, AI, and Hyperscale? 7
THE HPC-AI INFRASTRUCTURE MARKET: ON-PREMISES VS. HYPERSCALE 9
Combined HPC-AI Market View 9
Table 1: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2023 vs. 2022 10
Figure 1: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2023 vs. 2022 11
Figure 2: HPC-AI Infrastructure as Proportion of Total On-Premises and Hyperscale Infrastructure ($M) 12
Table 2: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast 13
Figure 3: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast 13
NON-HYPERSCALE HPC-AI SERVERS: SERVER CLASSES 15
Non-Hyperscale HPC-AI Server Classes, 2023 vs. 2022 15
Table 3: HPC-AI Server Market, Excluding Hyperscale ($M), 2023 vs. 2022, by Server Class 16
Figure 4: HPC-AI Server Market, Excluding Hyperscale ($M), 2023 vs. 2022, by Server Class 16
Figure 5: HPC-AI Server Market, Excluding Hyperscale ($M), 2023, by Server Class 17
Non-Hyperscale HPC-AI Server Forecast, 2024-28: Server Classes 18
Table 4: HPC-AI Server Market, Excluding Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast, by Server Class 18
Table 5: HPC-AI Server Market, Excluding Hyperscale, Year-over-Year Change, 2023 Actual, 2024-28 Forecast, by Server Class 18
Table 6: HPC-AI Server Market Share, Excluding Hyperscale, 2023 Actual, 2024-28 Forecast, by Server Class 19
Figure 6: HPC-AI Server Market, Excluding Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast, by Server Class 19
CONCLUSIONS 20
APPENDIX A: METHODOLOGY 22
APPENDIX B: HPC, AI, AND HYPERSCALE: DEFINITIONS AND INTERDYNAMICS 24
What Are Artificial Intelligence and Machine Learning? 24
What Is HPC? 26
What Is Hyperscale? 26
What Makes Hyperscale “Hyper”? 27
Hyperscale and Business Computing 28
Hyperscale and HPC 28
How Hyperscale is Unique 30
APPENDIX C: HPC MARKET DYNAMICS MODEL AND FUNDAMENTAL FORECAST ASSUMPTIONS 32
Market Maturity 32
Fundamental Market Dynamics Model 33
Figure C1: Traditional HPC Market Dynamics 34
Fundamental Market Assumptions 35
Fundamental Drivers 35
Fundamental Market Dampeners 36
Model-Based Assumptions 37
Basic Market Drivers 37
Basic Market Dampeners 38