EXECUTIVE SUMMARY
This Intersect360 Research report presents the 2023 total market size and five-year forecast for the overall market for scalable, high-performance data center infrastructure for High Performance Computing (HPC) and artificial intelligence (AI), including both AI infrastructure and on-premises HPC-AI. The non-hyperscale HPC-AI market is segmented into vertical markets across industry, government, and academia. 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.
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.
That trend will reverse over the next five years. HPC-AI users transition more workloads from cloud to on-premises, and hyperscale companies’ infrastructure spending will come to represent a smaller proportion of HPC-AI infrastructure spending as a result. While on-premises HPC-AI spending will grow at a 5.4% CAGR, hyperscale AI spending will retract before returning to steady growth, ending with a -4.6% CAGR. These two effects largely cancel each other out over the five-year span, combining to a flat 0.3% CAGR, with $86.8 billion in combined spending in 2028.
Non-hyperscale HPC-AI spending, including the use of cloud computing for HPC-AI, increased 9.0% to $48.4 billion in 2023. Growth was highest in the government sector, with each of our government segments posting double-digit growth in 2023. Among commercial vertical markets the highest growth occurred in the two commercial manufacturing segments, consumer product manufacturing and large product manufacturing. Government segments are forecast to slightly outpace non-hyperscale industry for HPC-AI growth through 2028.
As AI enthusiasm continues, we forecast the non-hyperscale HPC-AI market to surge to double-digit growth in 2024 before sliding back in 2025 as supply catches up to demand. The market will return to steady, single-digit growth beginning in 2026.
TABLE OF CONTENTS
EXECUTIVE SUMMARY 2
TABLE OF CONTENTS 4
INTRODUCTION 6
What Are HPC, AI, and Hyperscale? 8
THE HPC-AI INFRASTRUCTURE MARKET: ON-PREMISES VS. HYPERSCALE 10
Combined HPC-AI Market View 10
Table 1: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2023 vs. 2022 11
Figure 1: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2023 vs. 2022 12
Figure 2: HPC-AI Infrastructure as Proportion of Total On-Premises and Hyperscale Infrastructure ($M) 13
Table 2: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast 14
Figure 3: HPC-AI Infrastructure, On-Premises vs. Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast 14
NON-HYPERSCALE HPC-AI: VERTICAL MARKETS 16
Non-Hyperscale HPC-AI Market: Vertical Markets, 2023 vs. 2022 16
Table 3: HPC-AI Market, Excluding Hyperscale ($M), 2023 vs. 2022, by Economic Sector 17
Table 4: HPC-AI Market, Excluding Hyperscale ($M), 2023 vs. 2022, by Vertical Market 17
Figure 4: HPC-AI Market, Excluding Hyperscale ($M), 2023, by Vertical Market 18
Table 5: HPC-AI Market, Including Hyperscale ($M), 2023 vs. 2022, by Economic Sector 19
Table 6: HPC-AI Market, Including Hyperscale ($M), 2023 vs. 2022, by Vertical Market 19
Figure 5: HPC-AI Market, Including Hyperscale ($M), 2023, by Vertical Market 20
HPC-AI Market Forecast, 2024-28: Vertical Markets 21
Table 7: HPC-AI Market, Excluding Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast, by Sector 21
Table 8: HPC-AI Market, Excluding Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast, by Vertical Market 21
Table 9: HPC-AI Market, Excluding Hyperscale, Year-over-Year Change, 2023 Actual, 2024-28 Forecast, by Sector 22
Table 10: HPC-AI Market, Excluding Hyperscale, Year-over-Year Change, 2023 Actual, 2024-28 Forecast, by Vertical Market 22
Table 11: HPC-AI Market Share, Excluding Hyperscale, 2023 Actual, 2024-28 Forecast, by Sector 23
Table 12: HPC-AI Market Share, Excluding Hyperscale, 2023 Actual, 2024-28 Forecast, by Vertical Market 23
Figure 6: HPC-AI Market, Excluding Hyperscale ($M), 2022-23 Actual, 2024-28 Forecast, by Vertical Market 24
CONCLUSIONS 25
APPENDIX A: METHODOLOGY 27
APPENDIX B: HPC, AI, AND HYPERSCALE: DEFINITIONS AND INTERDYNAMICS 29
What Are Artificial Intelligence and Machine Learning? 29
What Is HPC? 31
What Is Hyperscale? 31
What Makes Hyperscale “Hyper”? 32
Hyperscale and Business Computing 33
Hyperscale and HPC 33
How Hyperscale is Unique 35
APPENDIX C: HPC MARKET DYNAMICS MODEL AND FUNDAMENTAL FORECAST ASSUMPTIONS 37
Market Maturity 37
Fundamental Market Dynamics Model 38
Figure C1: Traditional HPC Market Dynamics 39
Fundamental Market Assumptions 40
Fundamental Drivers 40
Fundamental Market Dampeners 41
Model-Based Assumptions 42
Basic Market Drivers 42
Basic Market Dampeners 43