Latest News- AI Data Center Market: Hardware is expected to lead the Component segment during 2025-2029

The AI Data Center Market is being driven by Explosion of generative AI and large language models

The AI Data Center Market is expected to grow at a CAGR of 28.7% during 2024 and 2029. During this period, the market is also expected to show a growth of USD 35538.3 million. The global AI data center market is experiencing a significant shift towards liquid cooling as the standard cooling solution for large-scale AI deployments. This transition is driven by the increasing thermal design power of advanced AI accelerators, which far surpass the cooling capacity of traditional air-based systems. Modern GPUs and processors used in AI platforms can generate power densities of over 100 kilowatts per rack, whereas air cooling is only effective up to approximately 30 kilowatts per rack. Consequently, liquid cooling has become a necessity to effectively manage the heat generated by these high-performance AI systems. 

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Which Factors Are Causing a Surge in Market Growth?

The market is segmented based on

• Component
  • Hardware
  • Software
  • Services
• Type
  • Hyperscale data centers
  • Edge data centers
  • Colocation Data centers
• Deployment
  • Cloud-based
  • On-premises
  • Hybrid cloud
• Geography
  • North America
    • Canada
    • US
  • APAC
    • China
    • India
    • Japan
  • Europe
    • Germany
    • UK
    • France
  • Middle East and Africa
  • South America

According to Technavio, There are several factors that are causing the market to flourish during the forecast period, which are as follows: 

• Explosion of generative AI and large language models
• Strategic imperative of sovereign AI and national investments
• Continuous innovation in high-performance computing hardware

However, the market also witnesses some limitations, which are as follows:

• Power scarcity and electrical grid constraints
• Critical supply chain bottlenecks for specialized hardware
• Mounting environmental, social, and governance (ESG) pressure

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Market Scope in AI Data Center Market Research Report

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Research Analysis Overview

The AI data center market is witnessing significant growth, driven by advanced technologies such as liquid cooling and AI-driven analytics. IT asset management and risk assessment methods are crucial in designing data centers, while performance benchmarks, uptime monitoring, and power distribution units ensure optimal functionality. Uninterruptible power supplies and environmental monitoring maintain data security, and data encryption techniques and access control systems safeguard against breaches. Compliance regulations, data center migration, server consolidation, and virtual desktop infrastructure are key considerations. Energy consumption reduction through renewable energy sources, waste heat recovery, and building management systems, as well as precision cooling systems, airflow management, rack-level monitoring, power monitoring tools, performance optimization, and capacity management, contribute to cost-effective and efficient AI infrastructure.

Market Research Overview

The AI Data Center Market encompasses businesses specializing in the development and implementation of artificial intelligence (AI) technologies for data center operations. This market involves server virtualization for maximizing resource utilization, data center cooling for efficient temperature management, power usage effectiveness for minimizing energy consumption, network latency reduction for optimized data transfer, and storage capacity planning for managing expanding data requirements. According to Technavio, the global IT software market, which includes AI Data Center solutions, is calculated based on the consolidated revenue of companies providing various software offerings, including cloud-based solutions. This market comprises application software developers, focusing on industry-specific solutions, and systems software providers, excluding those engaged in interactive home entertainment or database management software production.. Industries are leveraging the products belonging to the market for customer engagement, transactional notifications, and promotional offers.

Technavio Research
Jesse Maida
Media & Marketing Executive
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Website: www.technavio.com/