Research company Gartner predicted potential revenue from chips designed to run AI workloads will hit $53.4 billion this year and continue growing to $119.4 billion in 2027.

VP analyst Alan Priestley stated developments in generative AI is driving the production and deployment of chips.

Priestley cited “increasing use of a wide range [of] AI-based applications in data centres, edge infrastructure and endpoint devices” as creating demand for high performance GPUs and optimised semiconductors.

He added deployments of custom chips will replace current discrete GPUs at many organisations, particularly in workloads involving generative AI.

Gartner predicted the value of AI-enabled application processors used in the consumer electronics sector will amount to $1.2 billion in 2023, up from $558 million in 2022.

It cited demand for high-performance computing systems to develop and deploy generative AI services.

Gartner explained many vendors which offer high-performance “GPU-based systems and networking equipment” are “seeing significant near-term benefits”, with longer-term opportunities driven by companies seeking “efficient and cost-effective ways to deploy these applications”.