Making Sense Of AI Silicon TAM
It is one thing to identify the AI opportunity and a completely different one to size it. The toughest thing about analyzing AI market is the overall uncertainty of it. At the current point in time, several AI use cases are well established, but many others are speculative. With hype running ahead of reality, even things that appear imminent may be years away or may never materialize.
It does not help that several startups are spending tremendous amounts of capex chasing the AI dream. Beyond The Hype Estimates that, excluding memory, data center and edge silicon TAM in 2023 was about $80B. Of this, conservatively, at least $23B was likely attributable to startups and nontraditional sources. Assuming a generous 10% to 20% survival rate for the startups, the sustainable data center TAM baseline is likely around $60B.
After several months of looking at ways to size future TAM, Beyond The Hype has the following divergent approximations of the data center market size for 2024:
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