AI Infrastructure market set for explosive growth

• Hyperscalers, major cloud service providers and digital platforms are industry’s leading spenders
• In the second quarter of 2025 alone, spending on compute and storage infrastructure for AI surged by 166% compared to the same period last year, reaching $8b.
• IDC forecasts accelerated servers will comprise over 95 per cent of server AI infrastructure spending by 2029.

The global artificial intelligence (AI) infrastructure market is entering an era of unprecedented growth, with spending forecast to soar to $758 billion by 2029, according to the latest data from the International Data Corporation (IDC). 

The revelation underscores the accelerating demand for robust computing and storage solutions to support a rapidly expanding set of AI deployments worldwide.

Organisations worldwide are ramping up expenditures on AI-centric hardware. In the second quarter of 2025 alone, spending on compute and storage infrastructure for AI surged by 166 per cent compared to the same period last year, reaching $82 billion.

IDC credits this growth primarily to investments in advanced servers designed for AI workloads, which now represent a foundational element of digital transformation across industries.

Cloud and shared environments remain the heart of current AI infrastructure spending, accounting for 84.1 per cent of total outlays in Q2 2025.

Hyperscalers, major cloud service providers, and digital platforms are the industry’s leading spenders, together representing an overwhelming 86.7 per cent of quarterly investment in AI infrastructure.

Servers play a dominant role in this trend, constituting 98 per cent of overall AI-centric spending—a category that saw a 173.2 per cent year-over-year increase. Servers embedded with hardware accelerators, such as GPUs, have become the preferred choice for AI platforms.

These accelerated servers now make up 91.8 per cent of total server-related AI spending, after growing by more than 207 per cent in the past year. IDC forecasts accelerated servers will comprise over 95 per cent of server AI infrastructure spending by 2029, with a 42 per cent compound annual growth rate (CAGR).

US leads but Asia showing fastest growth

The United States continues to command the lion’s share of global AI infrastructure investment, with 76 per cent of total spending in Q2 2025. China (PRC) is second with an 11.6 per cent share, while Asia-Pacific/Japan (6.9 per cent) and EMEA (4.7 per cent) round out the top regions. Looking ahead, the PRC is projected to grow fastest, posting a 41.5 per cent CAGR through 2029—slightly ahead of the US at 40.5 per cent.

Rising demand for handling massive, complex datasets needed for AI training and inference has also fueled growth in storage investments, which jumped 20.5 per cent year-over-year in Q2 2025. Nearly half of this spending (48 per cent) comes from cloud-based deployments, reflecting the need for scalable, accessible storage in modern AI workflows.

IDC analysts have revised earlier forecasts for a slowdown, pointing instead to an extended period of intense investment—especially for GPU and accelerator-based servers in the US.

“There is a distinct possibility that more AI-related investment will be announced in the coming years that will add to and extend the current mass deployment phase of accelerated servers well into 2026 and even beyond,” said Lidice Fernandez, group vice president, Worldwide Enterprise Infrastructure Trackers at IDC.

Industry experts expect that hyperscalers, major cloud service providers, and research/education sectors will continue to drive rapid adoption of AI infrastructure, ensuring robust support for innovation and digital transformation initiatives well into the next decade.

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