Edge AI Chip Market Expected to Surpass Cloud by 2025

Despite the current pandemic-related downturn, the demand for edge AI chips will grow to outstrip demand for cloud AI chips for the first time in 2025, according to a new report from ABI Research.

Demand for edge AI chips in sectors such as industrial is paused due to the pandemic, but will rebound in 2022, says the report

By 2025, the edge AI chip market will reach $12.2bn in revenue, whereas cloud AI chip revenues will reach $11.9bn in the same time frame.

While most AI training and inference workloads are handled in the cloud today, ABI Research predicts that growth in the edge AI chipset market will be driven by increasing demands for low latency and data privacy plus the availability of low-cost ultra-low-power chips designed specifically for this application. AI training and inference will be processed in gateways and all types of edge devices, right down to sensor nodes in the next five years.

“By integrating an AI chipset designed to perform high-speed inference and quantized federated learning or collaborative learning models, edge AI brings task automation and augmentation to device and sensor levels across various sectors,” said Lian Jye Su, principal analyst at ABI Research.  “So much that it will grow and surpass the cloud AI chipset market in 2025.”

Lian Jye Su (Image: ABI Research)

The current global Covid-19 pandemic has deflated demand for consumer smart devices such as smartphones and wearables, affecting the deployment of AI chips for these markets. The pandemic has also seen AI adoption in industrial manufacturing, retail and other verticals postponed. However, Su expects the market to rebound in 2022.

“It is important to note that the impact on the chipset supply chain has been relatively minimal since fabrication factories in Singapore and Taiwan remained operational during the outbreak,” he said.

Su said that 5G and WiFi-6 connectivity chip vendors, as well as those creating chips for autonomous driving, have not seen much impact to their product roadmaps, which bodes well for a rebound in demand in the edge AI chip sector.

The report also highlights opportunities for chip companies big enough to span a raft of endpoint niches with their AI offerings, such as Intel with its Mobileye, Movidius and FPGA product lines.

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