According to TechInsights, the server market is expected to reach $273 billion by 2028, with an annual compound growth rate of 18%. In recent years, server demand has been essentially cyclical, influenced by the fluctuations in update cycles; however, a disruptive force is now stimulating growth: Artificial Intelligence.

By 2028, servers designed specifically for AI applications will occupy 59% of the market share, with a compounded annual growth rate of 49%. These servers typically include more high-performance processor cores, memory, storage, and network cards for handling complex AI applications. TechInsights believes that the annual compounded growth rate for standard servers is 3%, not declining as some in the industry have claimed.

These predictions are based on TechInsights' recent OEM and ODM server reports. Dell benefits from strong AI server demand, with its Infrastructure Solutions Group sales up 42.5% year-on-year, reaching $9.23 billion in Q1. AI-optimized server revenue grew by 21.5%. Dell's AI server backlog is worth $3.8 billion, with sales pipeline multiple times that, reflecting strong demand.

HPE's AI server revenue grew by 39% in the second quarter, reaching $900 million, up 39% year-on-year. HPE's revenue was $7 billion, with HPC and AI businesses combined achieving $1.4 billion, up 26% year-on-year.

Supermicro's YoY growth in Q1 2024 exceeded 200%. Currently, corporate orders account for over 15% of the cumulative orders for AI systems, with the number of corporate AI clients almost doubling YoY. It is evident that businesses are purchasing new AI servers for new AI applications.