Written by 12:28 am AI, Discussions, Uncategorized

– Data Center Server Investment Surges Amid Increasing AI Adoption

Demand for AI sparks increase in data center server spending, even as shipments fall – Silico…

Data center server shipments are expected to decrease by around 20% this year, but specific manufacturers are set to benefit significantly from the increased demand for advanced artificial intelligence hardware. Despite the projected decline in server shipments by 17% to 20% in 2023, revenue is predicted to increase by 6% to 8%, primarily due to the rise of “hyper heterogeneous computing,” as outlined in the latest Cloud and Data Center Market Update by Omdia.

Hyper heterogeneous computing involves integrating additional silicon chips in servers to handle AI workloads more efficiently, leading to a higher overall cost. This trend is driving the configuration of more servers with co-processors to enhance performance for specific tasks. Servers with built-in AI accelerators, like Nvidia Corp.’s DGX server featuring H100 or A100 graphics processing units, are becoming increasingly popular. Similarly, Amazon Web Services Inc. provides inference hardware with customized Inferentia 2 coprocessors to boost AI processing capabilities.

Various coprocessors, including Google LLC’s video transcoding servers tailored for media processing tasks supporting up to 20 Video Coding Units (VCUs), are being integrated into servers. Omdia predicts that by 2027, CPUs and coprocessors will account for over 30% of data center expenditure, a significant rise from less than 20% a decade ago.

Major tech companies such as Microsoft Corp. and Meta Platforms Inc. are key buyers of coprocessors, with estimates suggesting they will acquire more than 150,000 of Nvidia’s H100 GPUs by the year-end—triple the quantity obtained by Google, Amazon, and Oracle Corp.

The report also addresses the challenges confronting traditional server manufacturers like Dell Technologies Inc., Hewlett-Packard Enterprise Co., and Lenovo Group Ltd. in meeting the demand for GPU-powered servers due to supply constraints from Nvidia, resulting in extended lead times ranging from 36 to 52 weeks.

With the escalating need for high-performance servers, data center operators are increasing investments in power and cooling infrastructure. Omdia highlights a 17% revenue increase from rack power distribution gear and a 7% uptick in spending on cooling technologies in the first half of the year. Particularly, investments in direct-to-chip liquid cooling systems are expected to surge by 80% this year.

Looking forward, the trend of data center operators opting for fewer yet more powerful server systems is likely to gain traction in the upcoming years. Omdia projects a steady annual growth rate of 10% in sector spending until 2027, surpassing $195.6 billion by that time.

Visited 1 times, 1 visit(s) today
Last modified: February 13, 2024
Close Search Window