While Apple might be struggling to launch an upgraded Siri, the overall AI market is ballooning. A new report from the analytics firm Counterpoint Research projects that the ongoing AI transformation will push the global semiconductor market past $1 trillion in revenue.
That"s almost double the current size of the market, which sits at $656 billion in revenues as of 2024. The firm said in a blog post that global chip market revenues are expected to jump 1.9 times from 2024 through 2030, largely fueled by Agentic AI and the onset of Physical AI.
According to the firm, we are currently in the second phase of AI infrastructure development, where the primary focus is on Agentic AI applications. There is an exponential rise in token generation for applications like conversational AI, semantic search, and fully integrated multimedia content creation. There are more demands for resources for computing, memory, and networking capabilities.
Meanwhile, the first phase saw the industry moving from basic text-based applications to multi-modal GenAI that can process images, audio, and video. All of this is contributing to the rise of the AI token economy, according to the firm"s VP of Research, Niel Shah.
Physical AI will mark the third wave of infrastructure development, where we will see the rise of intelligent autonomous machines like industrial robots, humanoids, and vehicles. Semiconductor chips are an integral part of it, as they are omnipresent across GPUs, memory, smartphones, and other components of the AI infrastructure.
By 2030, servers are expected to make a significant contribution to the projected trillion-dollar revenue, reaching $464 billion from $153 billion in 2024. Smartphones currently generate $172 billion and are forecasted to reach $259 billion.
Tech companies are pumping billions into developing AI data centers and other infrastructure. Amazon announced a new robotics team to focus on physical AI and launched its first robot with a sense of touch. Meanwhile, Nvidia introduced the new Blackwell Ultra GPU for large-scale AI reasoning and agentic AI workloads.
It was reported earlier this year that one in four laptops shipped in 2024 was GenAI-capable. Generative AI is also used as a selling point in premium smartphones from the likes of Google, Samsung, and Apple.
The firm said that there is an ongoing shift in revenue sources, which were "predominantly hardware-driven" in the past. In 2024, about 80% of direct revenues came from the sale of physical parts for AI infrastructure and edge devices. However, the market will eventually shift its focus to an ecosystem of AI-powered apps and services to crunch more cash.
This is similar to how the smartphone market, which was initially focused on selling more phones but later shifted to selling apps and services, matured over the years. The firm added that AI can create value by enabling businesses to save significant money through automation and making people more productive.
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