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AI Infrastructure in the Enterprise Gaining Momentum

REDWOOD CITY, Calif. – March 14, 2023 – 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.


About the Report

Dell’Oro Group’s Data Center IT Capex Quarterly Report details the data center infrastructure capital expenditures of each of the ten largest Cloud service providers, as well as the Rest-of-Cloud, Telco, and Enterprise customer segments. Allocation of the data center infrastructure capex for servers, storage systems, and other auxiliary data center equipment is provided. The report also discusses market trends, drivers of the leading Cloud service providers’ capex growth during the quarter, and the outlook for the next year. To purchase this report, please contact us at dgsales@delloro.com.

About Dell’Oro Group

Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks infrastructure, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.

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