AI PCs Set to Dominate 60% of Global PC Market by 2027: IDC Prediction

IDC predicts significant growth in shipments of AI PCs over the next few years, with next-generation AI PCs expected to dominate the market by 2027, driven by improved performance, privacy, and cost savings.

Significant surge in shipments of AI PCs expected over the next few years
Promises of enhanced user productivity, faster performance, and lower inferencing costs
Improved on-device privacy and security compared to cloud-based AI processing

A recent forecast by International Data Corporation (IDC) predicts a significant surge in shipments of artificial intelligence (AI) PCs over the next few years. These AI PCs are personal computers equipped with specialized system-on-a-chip (SoC) capabilities designed to perform generative AI tasks locally. According to IDC, shipments of AI PCs are expected to grow from nearly 50 million units in 2024 to more than 167 million in 2027, accounting for almost 60% of all PC shipments worldwide.

The increasing hype around generative AI has fueled the PC industry’s race to capitalize on the potential advantages of bringing AI capabilities from the cloud to the client. IT decision-makers are particularly interested in AI PCs due to the promises of enhanced user productivity, faster performance, lower inferencing costs, and improved on-device privacy and security. As a result, IDC anticipates that AI PC shipments will begin to ramp up in 2024, gradually transitioning from a niche market to a majority.

Traditionally, running AI tasks on a PC was done using the central processing unit (CPU), the graphics processing unit (GPU), or a combination of both. However, this approach often compromised the PC’s performance and battery life since these chips were not optimized for efficient AI processing. To address this, PC silicon vendors have introduced AI-specific silicon known as neural processing units (NPUs) into their SoCs. These NPUs are designed to execute AI tasks more efficiently.

IDC has identified three categories of NPU-enabled AI PCs:

1. Hardware-enabled AI PCs: These PCs incorporate an NPU that offers less than 40 tera operations per second (TOPS) performance. They typically enable specific AI features within applications to run locally. Leading chip manufacturers such as Qualcomm, Apple, AMD, and Intel currently offer products in this category.

2. Next-generation AI PCs: These PCs feature an NPU with 40-60 TOPS performance and an AI-first operating system (OS) that enables pervasive and persistent AI capabilities across the OS and applications. Qualcomm, AMD, and Intel are expected to launch future chips for this category, with availability projected to begin in 2024. Additionally, Microsoft is anticipated to roll out significant updates to Windows 11, leveraging high-TOPS NPUs.

3. Advanced AI PCs: These PCs provide over 60 TOPS of NPU performance. Although no silicon vendors have announced such products yet, IDC foresees their emergence in the coming years. While this forecast does not include advanced AI PCs, they will be incorporated into future updates.

While hardware-enabled AI PCs will experience rapid growth in shipments over the next two years, next-generation AI PCs are expected to dominate the market by the end of the forecast period. IDC predicts that by 2027, shipments of next-generation AI PCs will be twice as high as those of hardware-enabled AI PCs. While commercial buyers are likely to drive the initial demand for these AI PCs, consumers can also anticipate exciting advancements in PC gaming and digital content creation.

The decision to bring AI workloads from the cloud to the client is primarily driven by three technical factors. First, it enhances performance by eliminating the round trip that current AI workloads must make to the cloud and back over the network. Second, it improves privacy and security by keeping data on the device rather than in transit. Finally, it reduces costs by minimizing the need to access expensive cloud resources.

IDC’s report, titled “Worldwide Artificial Intelligence PC Forecast, 2023-2027,” provides a comprehensive outlook on the global AI PC market for the period from 2023 to 2027. The report categorizes the market into three primary segments based on NPU performance (non-NPU, less than 40 TOPS NPU, and 40-60 TOPS NPU) and processor architecture (ARM-based SoCs shipped by Qualcomm and Apple, and x86-based SoCs shipped by AMD and Intel). Additionally, the report offers forecasts by product category (desktop and notebook) and segment group (commercial and consumer).

It’s important to note that while some PCs and workstations equipped with powerful GPUs can handle AI workloads, IDC has excluded these non-NPU systems from the AI PC category to ensure clarity in taxonomy.

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Background Information

About AMD: AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor expertise, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

About Apple: Apple Inc., known for its iconic products, was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. The company has since revolutionized the technology landscape with innovations like the Macintosh computer, iPod, iPhone, iPad, and more. for its emphasis on design, user experience, and ecosystem integration, Apple's devices and software have made a profound impact on various industries. With a commitment to quality and innovation, Apple remains a global technology leader.

About ARM: ARM, originally known as Acorn RISC Machine, is a British semiconductor and software design company that specializes in creating energy-efficient microprocessors, system-on-chip (SoC) designs, and related technologies. Founded in 1990, ARM has become a important player in the global semiconductor industry and is widely recognized for its contributions to mobile computing, embedded systems, and Internet of Things (IoT) devices. ARM's microprocessor designs are based on the Reduced Instruction Set Computing (RISC) architecture, which prioritizes simplicity and efficiency in instruction execution. This approach has enabled ARM to produce highly efficient and power-saving processors that are used in a vast array of devices, ranging from smartphones and tablets to IoT devices, smart TVs, and more. The company does not manufacture its own chips but licenses its processor designs and intellectual property to a wide range of manufacturers, including Qualcomm, Apple, Samsung, and NVIDIA, who then integrate ARM's technology into their own SoCs. This licensing model has contributed to ARM's widespread adoption and influence across various industries.

About IDC: IDC, or International Data Corporation, is a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. Established in 1964, IDC offers valuable insights into industry trends, market forecasts, and technology adoption through its research and analysis. Their expertise aids businesses, governments, and IT professionals in making informed decisions and strategies.

About Intel: Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

About Microsoft: Microsoft, founded by Bill Gates and Paul Allen in 1975 in Redmond, Washington, USA, is a technology giant known for its wide range of software products, including the Windows operating system, Office productivity suite, and cloud services like Azure. Microsoft also manufactures hardware, such as the Surface line of laptops and tablets, Xbox gaming consoles, and accessories.

About Qualcomm: Qualcomm, a leading American global semiconductor and telecommunications equipment company, has played a pivotal role in shaping the modern technology landscape. Founded in 1985, Qualcomm has been at the forefront of innovation, particularly in the realm of mobile communications and wireless technology. The company's advancements have been instrumental in the evolution of smartphones, powering devices with their Snapdragon processors that deliver exceptional performance and efficiency. With a strong commitment to research and development, Qualcomm has enabled the growth of 5G technology, paving the way for faster and more connected experiences.

Technology Explained

CPU: The Central Processing Unit (CPU) is the brain of a computer, responsible for executing instructions and performing calculations. It is the most important component of a computer system, as it is responsible for controlling all other components. CPUs are used in a wide range of applications, from desktop computers to mobile devices, gaming consoles, and even supercomputers. CPUs are used to process data, execute instructions, and control the flow of information within a computer system. They are also used to control the input and output of data, as well as to store and retrieve data from memory. CPUs are essential for the functioning of any computer system, and their applications in the computer industry are vast.

GPU: GPU stands for Graphics Processing Unit and is a specialized type of processor designed to handle graphics-intensive tasks. It is used in the computer industry to render images, videos, and 3D graphics. GPUs are used in gaming consoles, PCs, and mobile devices to provide a smooth and immersive gaming experience. They are also used in the medical field to create 3D models of organs and tissues, and in the automotive industry to create virtual prototypes of cars. GPUs are also used in the field of artificial intelligence to process large amounts of data and create complex models. GPUs are becoming increasingly important in the computer industry as they are able to process large amounts of data quickly and efficiently.

SoC: A System-on-Chip (SoC) is a highly integrated semiconductor device that encapsulates various electronic components, including processors, memory, input/output interfaces, and often specialized hardware components, all on a single chip. SoCs are designed to provide a complete computing system or subsystem within a single chip package, offering enhanced performance, power efficiency, and compactness. They are commonly used in a wide range of devices, from smartphones and tablets to embedded systems and IoT devices, streamlining hardware complexity and facilitating efficient integration of multiple functions onto a single chip.