“The server and storage system component market is poised for an 11 percent growth for full-year 2023, primarily propelled by accelerators. Excluding accelerators, a 27 percent decline in revenue is forecasted, attributed to reduced demand resulting from inventory adjustments by system vendors and hyperscale cloud service providers,” stated Baron Fung, Senior Research Director at Dell’Oro Group.

“Worldwide data center capex is projected for only a 4 percent growth in 2023. The slowdown in general-purpose server and storage deployments weighed down the market despite increased AI-related investments,” said Baron Fung, Sr. Research Director at Dell’Oro Group.

The generative AI infrastructure story began with the NVDIA H100 in 1Q 2023, which has remained the industry barometer for AI adoption. End-users have utilized significant resources to obtain initial shipments of the costly and supply constrained GPU,” said Lucas Beran, Research Director at Dell’Oro Group.