Is the Future of AI Chips Dominated by Nvidia or Will Competitors Chip Away at Their Market Share?

Despite Nvidia’s stronghold on the AI chips market, an increasing number of companies like AMD are striving to challenge their dominance. While start-ups have claimed to outperform Nvidia’s products for specific workloads, AI researchers and commercial product developers still overwhelmingly prefer Nvidia’s technology.

According to Gartner, the revenue opportunity for semiconductors designed to execute AI workloads is expected to reach a staggering $53.4 billion in 2023, representing a 20.9% increase from 2022. The rising demand for AI-based applications, fueled by the advancements in generative AI and its widespread use in data centers, edge infrastructure, and endpoint devices, requires high-performance graphics processing units (GPUs) and optimized semiconductor devices.

Gartner predicts that AI chips revenue will continue to experience double-digit growth, increasing by 25.6% in 2024 and more than doubling by 2027 to reach $119.4 billion. This growth is driven by the production and deployment of AI chips, as industries and IT organizations increasingly incorporate AI GPUs in their systems.

In the consumer electronics market, the value of AI-enabled application processors used in devices is estimated to reach $1.2 billion by the end of 2023, up from $558 million in 2022. Meanwhile, the publicity surrounding ChatGPT has prompted 45% of surveyed executive leaders to increase their AI investments.

Large-scale deployments of custom AI chips are expected to replace the current predominant chip architecture, discrete GPUs, for various AI-based workloads, particularly those reliant on generative AI techniques. This demand for high-performance computing systems and the need for optimized designs will drive the deployment of custom-designed AI chips.

While Nvidia currently enjoys a significant market share in AI chips, competitors like AMD are continually striving to gain a foothold. The future of the AI chips market will likely witness increased competition as more companies aim to chip away at Nvidia’s dominance. However, Nvidia’s established reputation and preference among AI researchers suggest that they will remain a formidable force in the industry.


1. What is the revenue forecast for AI chips in 2023?
Gartner forecasts that AI chips designed for executing AI workloads will generate a revenue opportunity of $53.4 billion in 2023.

2. How much is the estimated increase in AI chips revenue in 2024?
Gartner predicts a 25.6% increase in AI chips revenue in 2024.

3. What is the estimated revenue for AI chips in 2027?
By 2027, Gartner expects AI chips revenue to more than double, reaching $119.4 billion.

4. Will custom-designed AI chips replace discrete GPUs?
Large-scale deployments of custom-designed AI chips are expected to replace the current predominant chip architecture, discrete GPUs, for a wide range of AI-based workloads, especially those based on generative AI techniques.