“Accelerated servers, mainly targeted for AI training workloads, have accounted for the majority of the spending among the US and Chinese hyperscalers year-to-date,” says Dell’Oro’s Baron Fung, “while NVIDIA GPU systems have been the dominant solution, especially for broader cloud and enterprise deployments, the US hyperscalers are becoming more vertically integrated, increasing their usage of AI servers with custom accelerators. These custom architectures, which are optimized for each cloud service provider’s workloads, can realize significant capex savings, and opex savings, in terms of providing increased efficiencies. Meanwhile, adoption of accelerated computing for the non-hyperscale market is also gaining traction, with spending more than doubling compared to the year-ago period.”
Global datacentre capital expenditures are expected to rise by 44 percent in 2024, fueled by sustained demand for both AI and non-AI infrastructure investments.
Dell topped all OEMs in server revenue for 3Q 2024, with IEIT Systems and HPE trailing closely behind. Accelerated servers made up an estimated 40 percent of OEM server revenue for the quarter. White-box server vendors dominated the accelerated server market, capturing over 60 percent of revenue share to meet robust hyperscale demand.
AI investments will remain a key growth driver, though data center capex growth in 2025 is expected to moderate as some hyperscale cloud service providers temporarily pause their expansion efforts.
The overall Datacentre Physical Infrastructure (DCPI) market maintained double-digit revenue growth in 3Q 2024, as purpose-built physical infrastructure deployments cope with accelerated computing workloads.
“The AI growth cycle for DCPI picked up steam in 3Q 2024,” says Dell’Oro’s Lucas Beran, “top-line revenue growth for the DCPI market was comparable to the previous quarter, but the underlying product mix notably shifted towards products and systems with characteristics to support high-density accelerated computing workloads. As expected, this shift was primarily realized from growth in liquid cooling and high ampacity power distribution infrastructure, which we anticipate will accelerate further in the coming year.
“Additionally, in what has become the new norm, orders outpaced expectations and continued to 
drive DCPI vendor backlogs higher. The continued strength in orders and historically high vendor backlogs gives me significant confidence that revenue growth will accelerate in 2025, but also points to sustained growth in the years to follow,”
Modine and Eaton led all vendors in market share gains, while Huawei and Vertiv lost share.
Revenue growth occurred in all regions, paced by the highest growth rate in North America. Growth accelerated in EMEA (Europe, Middle East, and Africa), China, and Asia Pacific excluding China as DCPI deployments for accelerated computing workloads started building momentum outside of North America.
Revenues grew across all market segments. Growth, however, was skewed towards deployments to support accelerated computing. Facility power distribution paced all market segments for the fourth quarter in a row, led by revenue growth from high-ampacity busways. In thermal management, air-based thermal management revenues were flat against a difficult comparison, while liquid cooling revenues doubled Y/Y.
Looking ahead, DCPI market growth is expected to grow double-digits in 2024. Dell’Oro forecasts DCPI market revenue growth to accelerate to high teens in 2025, driven by the construction of purpose-built accelerated computing facilities from cloud and colocation service providers materialise at scale
