Running hot? Server sales forecast to cool in 2025 • The Register

US tech sanctions and provide chain readiness for racks of Nvidia’s newest gear will possible trigger AI server gross sales to cool-off in 2025.

Taiwan-based market watcher TrendForce says shipments of AI-configured programs grew 46 p.c final 12 months on the again of orders from cloud service suppliers (CSPs).

This pattern was additionally famous by Synergy Analysis Group, which published stats last month displaying that anticipated buyer demand for AI drove a 48 p.c surge in spending on public cloud infrastructure throughout 2024, and server maker Foxconn attributed its recent record revenue rise to gross sales of AI packing containers.

TrendForce, nevertheless, sees some uncertainty forward for AI servers, main it to forecast a number of different outlooks for 2025.

Thought of most probably is that the market will proceed to develop, however at a decrease degree of annual progress – albeit one that may exceed 30 p.c. Microsoft, Meta, Amazon, and Google are planinng elevated capital expenditure in cloud and AI infrastructure, and that is projected to maintain some momentum for AI server demand.

The worst-case situation, which TrendForce considers the following most possible, is that the expansion of AI server shipments will gradual to “solely” 20-25 p.c.

Elements shaping this outlook embody doubtlessly stricter US rules on AI chip exports to China, creating larger market uncertainty. On prime of that is potential delays of Nvidia rack systems primarily based on Grace-Blackwell superchips as their advanced design pushes large-scale deployment to the second half of the 12 months.

A extra optimistic view assumes that proactive insurance policies in each the US and China, such because the Stargate project, may speed up AI server deployment. It additionally considers that whereas the revelations about DeepSeek could have an effect on high-end on GPU adoption, the massive cloud firms are procuring AI servers with proprietary silicon sooner than anticipated. DeepSeek may nicely develop AI adoption, mentioned TrendForce, driving edge AI progress. Ought to these elements be realized, the analyst forecast AI server shipments to inflate by almost 35 p.c throughout 2025.

IBM chief Arvind Krishna this month predicted that “a reckoning” over the prices of growing AI fashions following the discharge of DeepSeek will assist gas adoption of the expertise.

“We’ll discover that the utilization will explode as prices come down,” Krishna mentioned. “I feel it’s a validation – we have now been on the purpose that you just should not have to spend a lot cash to get these fashions.”

TrendForce mentioned it expects DeepSeek’s affect to drive cloud operators towards lower-cost proprietary chips as the main focus shifts from AI coaching to inferencing, resulting in servers optimized for inferencing making up a bigger slice of the market.

The AI server buyer market can also be more likely to turn out to be extra segmented, with the massive cloud companies persevering with to put money into high-performance options, whereas enterprises will prioritize extra economical alternate options. ®