Home Innovation Cloud Cloud infrastructure expenditu...

Cloud infrastructure expenditure is driven by AI, according to IDC


Cloud infrastructure expenditure driven by AI IDC

According to IDC, cloud spending soared 18.5% YoY in Q4 2023 for computing and storage infrastructure meant for cloud deployments.

But fewer units were shipped overall, which is indicative of hyperscalers' desire for high-capacity, GPU-heavy servers at higher average selling prices.

AI is the main cause of the rise in spending on cloud infrastructure, according to Lidice Fernandez, a group vice president at IDC and co-author of the report. Tech giants like Google and Microsoft are rapidly advancing AI technology. However, AI workloads heavily rely on expensive GPU hardware.

The ones that swing volumes, according to her, are those enormous, massive mega-datacenters. As a result, this year, they began to see that a lot of these big hyperscalers and cloud service providers preferred GPU-rich setups, which are often more costly in terms of processing power.

Fernandez stated that these businesses need fewer expensive devices that are GPU-intensive to produce the same amount of capacity. This is because these devices can handle more demanding tasks at the same time.

Lidice suggests that fewer boxes are likely needed to do the same work, meaning infrastructure buyer dynamics will keep growing for a few years.

Cloud infrastructure sales in the fourth quarter of 2023 reached $31.8 billion, up 18.5% from the previous year. Spending on cloud infrastructure exceeded non-cloud computing and storage infrastructure, reaching $18.9 billion, a 16.4% increase from the previous year. Additionally, there was a 22.8% decrease in the total number of individual shipments of cloud equipment during the same period.

IDC's research shows that the demand for public cloud services is significant, leading to a 27% increase in spending, totaling $22.8 billion, which makes up 45% of global infrastructure spending. On the other hand, spending on "dedicated" cloud services, mainly private cloud infrastructure, only grew by 1.4% to $9 billion.

Business News

Recommended News

Latest Magazine