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Omdia’s latest forecast projects the AI data center chip market to hit $207B in 2025, peaking in 2026, as custom ASICs challenge NVIDIA’s GPU dominance.
AI data center chip market to grow from $123B in 2024 to $207B in 2025.
Forecast predicts $286B by 2030, with growth peaking in 2026.
Growth driven by AI adoption, fine-tuning, and reasoning models.
Custom ASICs like Google’s TPUs and merchant ASSPs gain traction.
NVIDIA leads, but AMD’s Instinct GPUs and others challenge in 2025.
Market growth slows to 67% YoY in 2025 from 250% (2022-2024).
Omdia’s AI Processors for Cloud and Data Center Forecast, released August 28, 2025, highlights the AI data center chip market’s rapid rise, projecting growth from $123 billion in 2024 to $207 billion in 2025 and $286 billion by 2030. While the market saw over 250% year-on-year growth from 2022 to 2024, the 2024-2025 growth rate is expected to slow to 67%. AI infrastructure spending is set to peak in 2026, driven entirely by AI, before tapering off toward 2030.
“The key drivers of growth are the adoption of AI applications, the increasing democratization of AI fine-tuning, and the use of reasoning models, which generate large numbers of tokens that are not used in the final output,” said Alexander Harrowell, Principal Analyst for Advanced Computing at Omdia. However, demand is tempered by a shift to smaller, specialized models and improvements in AI model efficiency, including better training datasets, model design, and inference optimizations.
NVIDIA remains the dominant player, but alternatives like custom ASICs (e.g., Google’s TPUs) and merchant ASSPs (e.g., Huawei’s Ascend, Groq, Cerebras) are gaining ground in 2025. AMD’s Instinct GPUs have also seen significant progress, bolstered by substantial software investments in 2024. This diversification reflects a market moving toward specialized, efficient solutions to meet varied AI workload demands.
Omdia’s forecast covers GPUs, AI ASICs, ASSPs, FPGAs, and CPUs with integrated AI acceleration, providing detailed estimates across market segments, regions, industries, applications, memory, compute performance, and power consumption. This granular analysis helps stakeholders navigate the evolving AI chip landscape, balancing performance, cost, and energy efficiency.
The AI data center chip market’s trajectory signals a transformative phase, with custom ASICs and alternative solutions challenging traditional GPUs. As growth peaks in 2026, companies leveraging these innovations will shape the future of AI infrastructure.
Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets grounded in real conversations with industry leaders and hundreds of thousands of data points, make our market intelligence our clients’ strategic advantage. From R&D to ROI, we identify the greatest opportunities and move the industry forward.
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