In the evolving landscape of technology, a significant shift is underway as hardware manufacturers capitalize on the potential of cutting-edge AI applications within devices like PCs and smartphones. Analysts predict that these devices will increasingly house processing capabilities, gradually taking precedence over cloud-based solutions for several compelling reasons.
Research from IDC and Gartner indicates a noteworthy trend: one in five PCs this year will integrate AI-enabled chips, with a projection that six in 10 PCs shipped by 2027 will be inherently AI-native. AI-enabled smartphones are also anticipated to experience substantial growth in the coming years.
A report from IDC forecasts a surge in shipments of artificial intelligence (AI) PCs, featuring specialized system-on-a-chip (SoC) capabilities tailored for local execution of generative AI (genAI) tasks. The estimate suggests a jump from nearly 50 million units in 2024 to over 167 million in 2027. Gartner, on the other hand, anticipates a combined total of 295 million units for AI PCs and genAI smartphones by the end of 2024.
The current paradigm of AI processing, predominantly reliant on cloud data centers, faces sustainability challenges due to the considerable demand for specialized GPU processing and electricity. Additionally, concerns over network connectivity and the scarcity of processors required for AI tasks prompt a shift towards localized processing on edge devices.
Edge device manufacturers are already redirecting AI workloads from the cloud to endpoint clients, enhancing performance by eliminating the need for AI workloads to traverse networks. This transition to specialized edge-device chips is poised to improve privacy, security, and cost-effectiveness by keeping data on local devices and minimizing reliance on expensive cloud resources for AI training and inference processing.
As businesses undergo a genAI-driven digital transformation, the edge computing segment is experiencing unparalleled growth, surpassing even cloud computing. Gartner predicts that by 2025, over 50% of enterprise-managed data will be created and processed outside traditional data centers or the cloud.
In the realm of devices, this year will witness AI-enabled PCs constituting 22% of all PCs, with genAI-enabled smartphones representing a similar percentage across basic and premium models. Noteworthy is the expected resurgence in PC shipments, up by 3.5% in 2024, and a 4.2% increase in smartphone shipments, marking a positive trend following recent declines.
The industry outlook emphasizes the growing importance of on-device genAI capabilities and AI processors, with major players like Apple incorporating neuro-processing units (NPUs) in smartphones for advanced features such as image enhancement. Gartner estimates shipments of 240 million genAI smartphones and 54.5 million AI PCs by the end of the year.
Microprocessor manufacturers like Nvidia, Intel, and AMD are actively shifting focus towards dedicated SoC chiplets and NPUs to assist edge-device CPUs and GPUs in executing genAI tasks. IDC identifies three categories of NPU-enabled AI PCs, each with varying performance levels, showcasing the industry's commitment to advancing AI capabilities at the device level.
In conclusion, as the excitement around generative AI grows, the PC industry is swiftly adapting to harness the potential benefits of bringing AI capabilities closer to the end-user, moving away from traditional cloud-based models. The forecast suggests a transformative journey for AI PCs, transitioning from niche to mainstream in the coming years, while genAI smartphones are anticipated to make a substantial impact by 2027. The resurgence in the PC market, fueled by on-device AI, is expected to counteract the challenges posed by a disruptive socioeconomic environment, according to Gartner.
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