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The big picture: A new report illustrates the AI boom’s transformative impact on the worldwide server market. Nvidia GPUs have formed the backbone of the technology, so it isn’t surprising to see the company represent almost all embedded GPU shipments during the last quarter.
According to the International Data Corporation (IDC), worldwide server market revenue nearly doubled in the fourth quarter of 2024 compared to the same quarter in 2023. Significant growth occurred in multiple sectors, with revenue for non-x86 and embedded GPU servers roughly tripling.
Overall Q4 2024 revenue reached $77.3 billion – a 91 percent annual increase and the second highest leap since 2019. Revenue from x86 servers grew by 59.5 percent, reaching $54.8 billion, while non-x86 server revenue increased by 262.1 percent to $22.5 billion. Although the IDC didn’t specify what hardware accounted for the incredible growth in non-x86 spending, it likely represents Arm chips.
Embedded GPU servers contributed more than half of the total market revenue growth, increasing by 192.6 percent in 2024 compared to the previous year. The overall server market revenue totaled $235.7 billion, doubling since 2020.
The growing popularity of generative AI, which companies like OpenAI and Microsoft train on Nvidia server GPUs, is a primary factor behind the market’s explosive growth. Nvidia alone accounted for 90 percent of Q4 2024’s embedded GPU shipments. The company recently unveiled its upcoming server GPU lineups: Blackwell Ultra, Very Rubin, and Feynman.
It remains unclear how long the AI boom will last, as numerous controversies repeatedly revive the question of when or if a crash is approaching. Apple has struggled to enter the market, and Microsoft recently made significant AI data center expansion cuts. Still, the IDC expects governments, companies, and hyperscalers to continue increasing their investments in the technology for now.
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Canada saw the fastest annual server market growth at 118.4 percent in Q4 2024, while the US represented 56 percent of total revenue. China, representing a quarter of revenue, grew by 93.3 percent. Other regions with impressive growth during the same quarter include Japan (66.9%), other Asian countries (43.8%), Europe, the Middle East, and Africa (28.2% combined).
The top five server vendors saw their revenue grow almost inversely to their rankings. Lenovo, in fifth place, experienced the fastest growth – 70 percent. IEIT Systems saw a 66.2-percent revenue increase, while HP and Super Micro grew by about 55 percent. Dell saw its market share shrink from 11.3 to 7.2 percent with only 20.6 percent revenue growth but retained the top position.
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