According to a recently published report by Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, accelerated computing is forecast to lift hyperscale cloud capex to 17 percent growth in 2024. AI infrastructure investments in the enterprise are also gaining momentum.
"After growing just 4 percent in 2023, worldwide data center capex is projected to rebound to double-digit growth this year," said Baron Fung, Sr. Research Director at Dell'Oro Group. While accelerated computing for generative AI applications will be the front-runner in data center investments, we expect a modest recovery in general-purpose servers and storage demand following a period of steep correction. Until last year, the hyperscalers led the way for AI-related investments. This year, we expect accelerated systems to account for an increasing part of server OEM sales and carry a significant backlog as enterprise customers deploy AI workloads," explained Fung.
Additional highlights from the 4Q 2023 Data Center IT Capex Quarterly Report:
- Dell led all OEMs in server revenue in 2023, followed by HPE and IEIT Systems. The revenue share of the white box server vendors surpassed that of the top 3 server OEMs in 2023.
- Server and storage systems revenue is forecast to grow by 18 percent in 2024, as the product mix shifts to AI-optimized servers and to server platforms with the latest x86 CPUs from Intel and AMD, as well as ARM CPUs.
- We project that the top 4 US hyperscalers—Amazon, Google, Meta, and Microsoft—will each increase their data center capex by double digits in 2024.