AI Market Outlook: China's AI Investment Expected to Reach $38.1 Billion by 2027
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With the continuous evolution of technology, China's digital and intelligent transformation stands at a new starting point. Artificial Intelligence (AI), as the core driver of the latest technological revolution, is accelerating digital and intelligent transformations across industries. In this process, the demand for AI-centric IT investments is becoming increasingly prominent, with enterprises ramping up AI investments to maintain competitiveness in the digital era.
In 2022, the global AI IT investment reached $128.8 billion, and it is projected to grow to $423.6 billion by 2027, with a five-year compound annual growth rate (CAGR) of approximately 26.9%. Focusing on the Chinese market, IDC predicts that China's AI investment is expected to reach $38.1 billion by 2027.
In the short term, there is still room for growth in the domestic AI market regarding integration with various industry demands. Looking ahead, with government policy support and accelerated industrial upgrades, AI technology will inevitably merge with enterprise development, becoming part of products, services, and business models, and serving as a critical strategic resource for driving leapfrog development in Chinese enterprises.
In recent years, the demand for AI services has been growing, driving continuous market expansion. AI services will be a key expenditure focus in the coming years, with spending accelerating. By 2027, China's AI service expenditure is expected to exceed $5 billion, with a five-year CAGR of around 30%.
In the professional services sector, AI products based on generative AI, multimodal applications, large-scale models, and cloud computing are rapidly being deployed. Integrated AI products can provide customers with comprehensive and multi-dimensional intelligent service systems. In the government sector, AI technologies such as intelligent recognition and environmental monitoring will be primarily applied in public safety monitoring platforms, smart city management, and intelligent social services. In the financial sector, AI will be used for dynamic monitoring of internal and external risks, intelligent fraud detection, and customized customer services. Additionally, applying AI to human resource management will become a key investment focus for the financial industry in the near future, with spending growth attracting significant attention and a five-year CAGR nearing 30%.
An AI server is a data server capable of providing artificial intelligence (AI) services. It can support local applications and web services, as well as deliver complex AI models and services for cloud and on-premises servers. AI servers facilitate real-time computing services for various AI applications.
Analysis of the AI Server Industry's Development Prospects
The upstream of China's AI server industry chain consists of core components and software suppliers; the midstream includes AI server manufacturers; and the downstream comprises various application markets, such as internet companies, cloud computing firms, data center service providers, government agencies, financial institutions, healthcare, and telecom operators.
In 2022, the top four North American cloud providers—Microsoft, Google, Meta, and AWS—accounted for approximately 66% of AI server procurement. Domestic companies like ByteDance, Tencent, Alibaba, and Baidu are also increasing their AI investments, accounting for about 11.3%.
This year, several domestic internet companies have launched large-scale AI models. As a result, the demand for AI servers, the foundation of computing power, has surged. Data shows that China has released 79 large-scale models with over 1 billion parameters, ranking second globally. Compared to general-purpose servers, AI servers, especially training servers, can process vast amounts of data quickly and accurately, leading to a sharp rise in market demand.
During the China Computing Conference, Lenovo Group announced its AI strategy and officially launched two AI computing products: the AI large-model training server WA7780 G3 and the AI training-inference integrated server WA5480 G3. These products already have orders and are ready for deployment. Additionally, Lenovo's ISG (Infrastructure Solutions Group) reported that its global AI infrastructure business annual revenue exceeded $2 billion and unveiled its next-phase growth strategy, which includes an additional $1 billion investment over the next three years to accelerate global AI deployment.
As part of this investment, Lenovo will allocate $100 million globally to develop the Lenovo AI Innovators Program, which has already collaborated with 45 leading ISV partners in its first year to develop over 150 cutting-edge AI solutions. Leveraging the end-to-end ecosystem of AI innovators, these new solutions will scale AI technologies from labs to the market, enabling significant technological transformations in high-growth industries.
In 2021, the global server market size reached $83.17 billion, a year-on-year increase of 6.97%, with the AI server market accounting for $15.63 billion, growing by 39.1%. Driven by the increasing demand for computing power, the AI server market has experienced rapid growth. Notable manufacturers in the industry with revenues exceeding $1 billion and net profits over $100 million include Foxconn Industrial Internet, ZTE, Unisplendour Corporation, Inspur Information, Sugon, and Digital China.
As the core infrastructure for the development of the artificial intelligence industry, the global AI server market continues to expand. IDC predicts that by 2026, the global AI server market will reach $34.71 billion, with a compound annual growth rate (CAGR) of 17.30% from 2021 to 2026, maintaining a relatively fast growth trend. Meanwhile, the proportion of the global AI server market in the overall server market will increase from 15.25% in 2021 to 21.69% in 2026. The growth rate of the AI server market exceeds that of the overall server market, making it a key driver of the global server industry's sustained growth.
This research and consulting report was led by China Research and Intelligence, based on extensive market research and data from sources such as the National Bureau of Statistics, the Ministry of Commerce, the National Development and Reform Commission, the National Economic Information Center, the Development Research Center of the State Council, the National Commercial Information Center, the China Economic Monitoring Center, China Industry Research Network, and relevant domestic and international publications, as well as substantial information provided by professional AI server research institutions.