AI Data Center Chip Market to Reach $286bn by 2030, Growth Expected to Slow

The AI data center chip market is projected to reach $286bn by 2030, with growth slowing from 2024 to 2025. NVIDIA remains the dominant vendor, but alternatives to GPUs, such as custom ASIC chips and merchant ASSPs, are gaining traction. The market is expected to peak in 2026, with incremental spending driven by AI applications and the adoption of reasoning models.

The AI data center chip market is poised for significant growth, with projections indicating a market value of $286 billion by 2030 [1]. However, the market's rapid expansion is expected to slow down from 2024 to 2025, with growth projected at around 67% [1]. This slowing growth is attributed to a shift towards smaller, specialized models and improvements in AI model efficiency [1].

NVIDIA, a dominant player in the GPU market, continues to lead the AI data center chip market. However, alternatives to GPUs, such as custom ASIC chips and merchant ASSPs, are gaining traction. Companies like Google's TPUs, Huawei's Ascend series, Groq, and Cerebras are making inroads, as are AMD's Instinct line of GPUs [1]. This diversification is expected to continue, with the market reaching its peak in 2026, driven by incremental spending on AI applications and the adoption of reasoning models [1].

Despite the market's promising outlook, challenges remain. NVIDIA's stock has faced volatility due to concerns about an AI bubble and production delays, particularly for its H20 chip [2]. Additionally, Intel's struggles in the semiconductor industry have led to significant market share losses in data center servers and personal computers [2]. However, analysts remain largely bullish on NVIDIA, with 35 out of 39 ratings a Buy and an average stock price target of $198.57 [2].

The AI data center chip market is expected to continue growing, albeit at a slower pace, with 2026 marking the peak of incremental spending driven by AI applications and reasoning models. Investors should closely monitor the market's evolution, particularly the impact of new entrants and technological advancements.

References:
[1] https://www.stocktitan.net/news/TTGT/new-omdia-forecast-ai-data-center-chip-market-to-hit-286bn-growth-ch5ywvkqah8t.html
[2] https://www.fool.com/investing/2025/08/28/2-ai-semi-stocks-sell-before-fall-45-wall-street/