Accelerated computing is forecast to lift hyperscale cloud capex to 17 percent growth in 2024, according to a new report from Dell’Oro Group, which also found that 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.
- Dell’Oro projects that the top 4 US hyperscalers—Amazon, Google, Meta, and Microsoft—will each increase their data center capex by double digits in 2024.