Server market grows by 61 percent – AI hardware dominates data centers

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The global server market is experiencing unprecedented growth. According to current figures from IDC, revenue in the third quarter of 2025 increased by 61 percent compared to the same period last year, reaching 112.4 billion US dollars. In the first three quarters of 2025, total revenue nearly doubled to 314.2 billion dollars – a record largely driven by the demand for AI hardware.

Servers with integrated GPUs, in particular, are seeing explosive growth of 49.4 percent year-on-year and now account for more than half of the total server market revenue. These systems, equipped with GPUs such as Nvidia's Hopper, AMD's Instinct, or Intel's Sapphire Rapids with integrated accelerator technologies like QAT, DLB, and DSA, are designed for training and inference of large language models. Hyperscalers like Amazon AWS, Microsoft Azure, and Google Cloud are investing heavily in this hardware to meet the increasing demand for AI computing power.

Non-x86 servers boom; x86 grows moderately

While classic x86 servers grew by 32.8 percent with 76.3 billion dollars in revenue, non-x86 servers truly took off: they achieved 36.2 billion dollars in revenue – a growth of 192.7 percent. This category includes ARM-based systems as well as GPU-centric designs specifically optimized for AI workloads. The trend clearly shows that the market is currently shifting from CPU-centric to GPU- and accelerator-driven architectures.

Globally, the USA dominates with 79.1 percent growth, driven by Accelerated Servers with a 105.5 percent increase. China follows with 37.6 percent growth, accounting for almost 20 percent of global revenue. EMEA records a 31 percent increase, while Latin America lags with only 4.1 percent growth. Strong US demand is leading to global supply bottlenecks, as Taiwanese and Chinese manufacturers prioritize American orders.

ODMs displacing traditional OEMs

Market shares are also shifting significantly: ODM Direct – meaning direct shipments from Original Design Manufacturers to hyperscalers – grew by 112.2 percent to 66.8 billion dollars, reaching a market share of 59.4 percent. Companies like Quanta and Foxconn supply cloud providers directly, putting pressure on traditional OEMs.

Dell Technologies leads among OEMs with 9.3 billion dollars in revenue and 37.2 percent growth, but only achieves a market share of 8.3 percent. Supermicro, on the other hand, lost 13.2 percent and fell back to a 4.0 percent market share – apparently due to production delays and market saturation in GPU clusters. IEIT Systems holds steady with 4.1 billion dollars at 3.7 percent, while Lenovo grew by 26.1 percent and reached 3.6 percent. HPE records a decrease of 2.3 percent to a 3.0 percent market share – a sign that traditional providers are struggling in the AI-driven market.

Sustained demand and backlogs expected

“IDC expects AI adoption to continue to grow at an exceptional pace as major vendors continue to report record orders and have strong backlogs,” explains Juan Seminara, Research Director at IDC. “Hyperscalers and cloud providers continue to lead with new, large-scale implementations requiring significantly higher compute density. Furthermore, the first major AI-based research and education projects are being observed, which will further fuel the market's growth trajectory.”

Analysts expect demand for AI servers to remain high in the fourth quarter of 2025. However, the growth brings challenges: GPU servers consume two to four times more energy per rack than conventional systems, significantly increasing energy costs in data centers. In the EU, GDPR and the AI Act are tightening regulatory requirements for AI deployments, while high approval hurdles for energy-intensive data centers are slowing down expansion.

German companies could benefit from EMEA growth, for example, through partnerships for Sovereign Clouds within the framework of Gaia-X. Prices for GPU components have already risen by 15 to 20 percent, and delivery times of three to six months are not uncommon. Whether the explosive growth is sustainable or merely an AI bubble remains to be seen – market researchers still forecast growth rates of 30 to 40 percent for 2026. Details on the current figures can be found at IDC.

(fo)