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AI in Hardware Market Size Worth USD 210.50 Billion by 2034 Rising Demand for Smart Devices and Processors

According to Precedence Research, the global AI in hardware market size is expected to be worth approximately USD 210.50 billion by 2034, increasing from USD 34.05 billion in 2025. The market is expanding at a strong CAGR of 22.43% between 2025 and 2034.

Ottawa, Sept. 03, 2025 (GLOBE NEWSWIRE) -- The global AI in hardware market size is set for robust expansion, accounting for USD 41.58 billion in 2026 and is projected to grow from USD 50.81 billion in 2027 to nearly USD 210.50 billion by 2034.

In terms of CAGR, the market is forecasted to advance at a double-digit compound annual growth rate (CAGR) of 22.43% from 2025 to 2034. This growth is fueled by the surging demand for high-performance processors, the rapid adoption of automation, and the proliferation of smart devices across industries.

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AI in Hardware Market Highlights:

  • In term of revenue, the ai in hardware market was valued at USD 27,910 million in 2024.
  • It is projected to exceed over USD 2,10,500 million by 2034 up from USD 34,050 million in 2025.
  • The industry is expected to expand at a notable annual rate of 22.43%.
  • North America held the largest market share of 35.69% in 2024.
  • By Type, the processor segment accounted for the major market share of 55.77% in 2024.
  • By Deployment, the cloud-based segment captured the highest market share of 54.75% in 2024.
  • By Technology, the machine learning segment generated the highest market share of 46.79% in 2024.
  • By End User, the IT & telecommunication segment held the major market share of 21.49% in 2024.

AI in Hardware Market Size by Type 2022-2024 (USD Billion)

Type 2022 2023 2024
Processor 10.42 12.68 15.44
Memory 2.26 2.74 3.34
Network 3.87 4.72 5.76
Storage 2.25 2.75 3.37


AI in Hardware Market Size by End User 2022-2024 (USD Billion)

End User 2022 2023 2024
IT & Telecommunication 4.04 4.91 5.97
BFSI 3.28 4.01 4.90
Healthcare 2.35 2.87 3.50
Retail 1.99 2.43 2.97
Automotive 1.59 1.93 2.35
Others 5.56 6.76 8.23


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AI in Hardware Market Overview

What is an Artificial Intelligence in Hardware?

The artificial intelligence in Hardware market is a crucial segment of the technology industry, focusing on the design and implementation of specialized hardware elements to efficiently address AI-based workloads. As the use of AI is getting more integrated in the fields of healthcare, automotive, finance, manufacturing, and retail, the need for advanced hardware solutions is growing exponentially.

The market drivers are the increasing use of AI-enabled devices, explosive data growth, and the necessity to process data in real-time. Moreover, the development of edge AI devices, the evolution of 5G connectivity, and the increased focus on energy-efficient architectures also contribute to the growth of the market.

Major End-users of AI in Hardware:

1. Robotics & Autonomous Systems

AI hardware plays a crucial role in powering autonomous systems, enabling advanced functions like computer vision, motion planning, and real-time decision-making. It is widely used in industrial robots, service robots, surgical robots, and autonomous vehicles.

2. IT & Telecommunications

In this sector, AI-specific hardware supports large-scale data processing, recommendation systems, cybersecurity analytics, and edge computing. Telecom providers use AI hardware to optimize network performance, predict faults, and manage 5G infrastructure.

3. Healthcare & Medical Imaging

AI hardware accelerates the analysis of medical images such as CT scans, magnetic resonance imaging (MRIs), and X-rays. It is also used in robotic surgery systems and real-time diagnostic tools, improving both accuracy and speed in clinical settings.

4. Automotive & Driver Assistance Systems

AI-powered hardware enables features such as autonomous driving, advanced driver-assistance systems (ADAS), and driver behavior monitoring. It supports sensor fusion, navigation, and real-time vehicle control.

5. Surveillance, Security & Visual Inspection

AI hardware enhances real-time video analytics for facial recognition, intrusion detection, and anomaly monitoring in surveillance systems. In manufacturing, it is used for quality control and automated defect detection through visual inspection.

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AI in Hardware Market Opportunity

Emergence of E-commerce:

The emerging need to scale the retail industry is a major opportunity for artificial intelligence in hardware market. With the ongoing development of retailing through the use of e-commerce and omnichannel strategies and the increasing demands imposed on the product, efficiency and automation have become a necessity.

AI is used to develop hardware, including smart shelves, autonomous robots, and cashier-less checkout machines, to enable retailers to make their inventory easier to manage, streamline their supply chains, and reduce the cost of manual labor. The real-time data processing capabilities are enhanced by the AI hardware, allowing retailers to personalize shopping experiences, enhance forecasting of demand, and handle dynamic pricing strategies.

AI in Hardware Market Challenge and Limitation:

High Implementation Cost:

A major constraint in the market is the high cost of implementation. To design and deploy AI hardware, it needs specialized hardware like GPUs, TPUs, and ASICs, which are expensive to start. To the small and medium-sized enterprises, this expensing can serve as a significant hurdle to adoption, restricting access to the market.

Moreover, the process of deploying AI hardware to the existing infrastructures is usually complicated, necessitating the expertise of highly trained professionals, compatibility tests, and system upgrades. Interoperability between old and new AI-driven devices can pose a problem to organizations, and it will also raise integration expenses and timeframes.

AI in Hardware Market Segmentation Analysis

Type Analysis

Why did the Processor Segment Dominate the Artificial Intelligence in Hardware Market?

The processor segment dominated the artificial intelligence in hardware market in 2024. The AI systems are based on processors, such as GPUs and CPUs, which allow effective training and running of complex algorithms and neural networks. The largest chipmakers are continuing to innovate and launch processors that are specifically aimed at running AI workloads, which expands the market share in this segment. Their scalability, multifunction, and efficiency will ensure that processors will be central in the use of AI hardware.

The network segment is the most active in the market in the period of the forecast, due to the demand for seamless connectivity and collaboration between machines. This is also accelerating as the global adoption of 5G technology, which provides ultra-low latency and high bandwidth to execute real-time AI applications, is on the rise. Network hardware is essential in the operation of working with the vast quantities of data generated by AI models, especially in cloud computing and in setups involving edge computing.

End User Analysis

Which User Segment Held the Largest Share of the Artificial Intelligence in Hardware Market?

The telecommunication and IT industry segment held the largest share in the artificial intelligence in hardware market in 2024. Telecom and IT providers have resorted to the deployment of AI hardware to perform complex tasks and offer effective services.

Data processing utilizes AI-powered processors, network hardware, and storage to optimize operations of networks, reduce latency, and better service delivery. These strengths will make the telecommunication and IT sector the most popular end-user type in the market of AI hardware when its investments in digital transformation are strong.

The banking and finance sector experiences the fastest growth in the market during the forecast period. The fast digitalization of the BFSI sector is creating a need to use high-tech AI devices in facilitating the use of AI in risk management, fraud detection, compliance, and algorithmic trading.

The hardware used in AI-based applications in this industry requires the processing of large, sensitive data sets in a fast and highly precise manner. Predictive analytics are supported by AI hardware, which provides personalized financial services and the effective optimization of operations.

Technology Analysis

How Machine Learning Segment Dominates the Artificial Intelligence in Hardware Market?

The machine-learning sector led the artificial intelligence on the hardware market in 2024, as it is used broadly in various industries and scenarios. Machine learning has become a cornerstone of the modern application of AI, be it predictive analytics and fraud detection, customer service automation, or automated optimization of business processes. The constant improvements in machine learning algorithms, along with the exponentially increasing data volumes of big data, have further reinforced its contribution to AI innovation.

The computer vision segment is the fastest-growing in the market during the forecast period, due to the boom in demand for solutions of enhanced image and video analysis. The automotive industry, retail industry, healthcare, and security are among the industries that are increasingly using computer vision technologies for purposes like autonomous driving, facial recognition, diagnostic imaging, and smart surveillance. The high bandwidth of GPUs, FPGAs, and edge AI cameras is necessitated by the fact that they require computers with strong AI capable of processing extensive visual data.

Deployment Analysis

Why did Cloud Segment Hold the Largest Share of the Artificial Intelligence in Hardware Market?

The cloud segment held the largest share in the artificial intelligence in hardware market in 2024. AI infrastructure is available as cloud-based services so that the organization can utilize high-performance processors, graphic processing unit (GPUs), and storage without investing in physical equipment. This flexibility enables companies, big and small, to effectively train, test, and deploy AI models in many applications. People have increased demand due to the extensive use of cloud services by various industries, including healthcare, finance, retail, and IT industries, among others, who are increasingly relying on the cloud services provider to provide real-time analytics, automation, and interactions with customers.

The on-premise segment experiences the fastest growth in the market during the forecast period, due to the rising demand for data security, control, and compliance. In highly regulated industries, especially banking, healthcare, and defense, many organizations are choosing on-premise deployment so that sensitive data is not left outside their infrastructure.

On-premise AI hardware is also more customisable, processing in low-latencies, and can be seamlessly connected with legacy systems, thus suitable for mission-critical applications. As AI workloads grow more specialized and data-intensive, businesses are spending money on specialized processors, GPUs, and edge devices to make sure they can make the most of them and limit their dependency on external service providers.

Leading Companies in the AI in Hardware Market

  • Apple (US)
  • Intel (US)
  • NVIDIA (US)
  • Qualcomm Technologies (US)
  • Huawei Technologies (China)
  • Samsung Electronics (South Korea)
  • IBM (US)
  • Micron Technology (US)
  • Xilinx (US)
  • Google (US)
  • Microsoft (US)
  • AMD (US)

Recent Developments:

  • In June 2025, the School of Engineering at Santa Clara University declared a new interdisciplinary Master of Science in Artificial Intelligence (MSAI). The program will also provide the students with advanced AI competencies with a focus on ethical accountability and practice-based use.
  • In June 2025, according to Global Times, Chinese researchers unveiled the first AI-powered processor chip design system in the world, which is called QiMeng. The system is an automated architect and a builder of computer chips designed by the Institute of Computing Technology and the Institute of Software of CAS.
  • In June 2025, Amazon announced a new research and development team called agentic AI and robotics. The team, based in Lab126, Amazon's hardware R&D unit, will be the force behind products such as the Amazon Echo and Kindle.

AI in Hardware Market Key Regional Analysis:

How Big is the U.S. AI in Hardware Market?

The U.S. AI in hardware market size surpassed USD 6.18 billion in 2024 and is estimated to hit over USD 47.96 billion by 2034, representing a solid CAGR of 22.79% from 2025 to 2034.

U.S. AI in Hardware Market Trends:

The United States holds major potential to grow in the AI in hardware industry. This boom is driven by surging AI integration, significant investments from public and private players, and technological leadership in chip design and manufacturing.

U.S. companies like Nvidia, Intel, AMD, and AWS are leading the charge, supported by government initiatives like the CHIPS and Science Act, which fosters enhanced semiconductor production and innovation domestically

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How Did North America Dominate the Artificial Intelligence in Hardware Market?

North America dominated the Artificial Intelligence in Hardware Market in 2024, due to its high-level technological ecosystem and the presence of well-established AI companies across the globe. The region has a strong digital base, a large number of research centers, and innovation centers that produce breakthroughs in AI hardware solutions.

North Americans are rapidly extending AI-powered systems across their industries to achieve operational efficiency, precision, and a competitive edge in their healthcare, automotive, and manufacturing sectors. Furthermore, heavy investments from both the private sector and government initiatives in AI research and development reinforce North America’s leadership.

Why is Europe the Fastest-Growing in Artificial Intelligence in Hardware Market?

Europe experiences the fastest growth in the market during the forecast period, due to the high rate of adoption of AI technologies in the various sectors. The area has been proactively investing in digital change projects, and governments and non-governmental bodies are encouraging the use of AI in health care, transportation, finance, and intelligent manufacturing.

The interest in Industry 4.0 and smart factories is driving a surge in demand for AI-enabled hardware platforms, in particular robotics and automation platforms, and predictive analytics. The European Union (EU) has also come up with enabling regulatory environments and funding programmes to support AI research and adoption.

AI in Hardware Market Segments Covered in the Report

By Type

  • Processor
  • Memory
  • Network
  • Storage

By End User

  • Telecommunication and the IT industry
  • banking and finance sectors
  • Education
  • Ecommerce
  • Navigation
  • Robotics
  • Agriculture
  • Health care
  • Others

By Technology

  • Machine Learning
    • Supervised Learning
    • Un-supervised Learning
    • Deep Learning
    • Others
  • Computer Vision
  • Others

By Deployment

  • Cloud
    • Cloud Platforms
      • Private Cloud
      • Public Cloud
      • Hybrid Cloud
      • Community Cloud
    • Cloud Services
      • SaaS
      • IaaS
      • PaaS
      • Others
  • On-premise

By Region

  • North America
    • U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
  • Asia-Pacific
    • China
    • India
    • Japan
    • South Korea
    • Malaysia
    • Philippines
  • Latin America
    • Brazil
    • Rest of Latin America
  • Middle East & Africa (MEA)
    • GCC
    • North Africa
    • South Africa
    • Rest of the Middle East & Africa

Thank you for reading. You can also get individual chapter-wise sections or region-wise report versions, such as North America, Europe, or Asia Pacific.

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About Us

Precedence Research is a worldwide market research and consulting organization. We give an unmatched nature of offering to our customers present all around the globe across industry verticals. Precedence Research has expertise in giving deep-dive market insight along with market intelligence to our customers spread crosswise over various undertakings. We are obliged to serve our different client base present over the enterprises of medicinal services, healthcare, innovation, next-gen technologies, semi-conductors, chemicals, automotive, and aerospace & defense, among different ventures present globally.

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