AI chip revenue is set for stellar growth in the coming years, hitting $130 billion by 2030.

AI is poised to be one of the most revolutionary advancements in the history of technology, with the prospect of transforming countless industries. Behind the AI revolution are the chips that power it and the companies that make them. According to GlobalData, the industry is poised for a compound annual growth rate (CAGR) of 30%, going from $12 billion a year in 2021 to $130 billion in 2030.

“This rapid expansion will be driven by chips specifically optimized for AI with their share of the combined micro-component and digital logic semiconductor market set to increase from less than 10% in 2021 to at least 40% by 2030,” says Josep Bori, Research Director at GlobalData Thematics Intelligence.

“Deep learning neural networks continue to expand their capabilities, now including face recognition, medical diagnosis, and self-driving cars,” Bori continues. “This has been led by an improvement in the mathematical models used and the exponential growth in the model sizes and training data sets.”

GlobalData says most of the AI chip development is currently coming from redesigning existing microprocessors to better handle AI loads. At the same time, there is the possibility that a revolutionary leap in technology, such as quantum computing or neuromorphic chips, could lead to major advancements in the field.

Despite the promising outlook for the AI chip industry, GlobalData warns that ongoing tension between the US and China could put future prospects in jeopardy.

“In our view, the ongoing trade dispute between China and the US has negative implications for the global progress of AI semis technology,” added Bori. “We believe China will play a leading role in AI, due to its leadership in AI software and IoT technology, and its progress in low end chips manufacturing. However, unless China solves its access to extreme ultraviolet (EUV) lithography technology, currently indirectly prevented by US sanctions, it will likely struggle in AI in the datacenter, and most likely autonomous vehicles.”