The enterprise SSD market is set to experience significant growth in the third quarter of 2025, driven primarily by the surging demand for AI workloads, according to TrendForce’s latest analysis.
As major North American cloud service providers (CSPs) continue their aggressive investments in AI infrastructure, enterprise SSDs are becoming a critical component of the data ecosystem, supporting the computational and storage needs of advanced AI servers.
Major AI investments
Major CSPs have made significant investments in AI, underpinned by substantial data points that reflect their strategies. Microsoft has invested over $13 billion in OpenAI since 2019, with $10 billion+ in 2023 alone, and is building AI infrastructure that includes over one million NVIDIA H100 GPUs by 2025. AI integration into the Microsoft 365 suite has reached over 400 million users, with projected AI service revenues exceeding $10 billion annually by FY2025.
Amazon Web Services (AWS) launched a $100 million Generative AI Innovation Center in 2023, with Bedrock AI services attracting approximately 10,000 customers within the first year. AWS has also released the third generation of its Inferentia AI chips, with generative AI workloads growing 70 percent year-over-year from 2023 to 2024.
Google Cloud invested $300 million in Anthropic in 2023, along with $2 billion in convertible notes, and has deployed over 10,000 TPUv5 chips for its Gemini AI suite. Google Cloud AI revenue is expected to exceed $4 billion by 2025, with AI-enabled tools embedded across 90 percent of Google Workspace users.
Oracle Cloud has launched an AI Vector Database and formed partnerships with Cohere and NVIDIA, expanding AI-driven revenue streams with a projected 30% year-over-year growth. Oracle also plans 25 new AI data centers globally between 2023 and 2025.
Alibaba Cloud’s Tongyi Qianwen LLM has been deployed across 50+ Alibaba products, and AI cloud revenue is projected to reach $1.5 billion by 2025. Its AI chip production (Hanguang 800) saw a 200 percent capacity increase from 2023 to 2024.
Other notable players include IBM Watson, which has shifted towards AI-powered automation with $1 billion in acquisitions (Apptio, HashiCorp); Tencent Cloud, which announced a $500 million AI fund in 2024 and is developing LLaMA-3 based models; Baidu Cloud, with its Ernie AI models deployed in over 600 enterprise applications; and Huawei Cloud, whose PanGu models have over 2 billion parameters and have contributed to a 40 percent year-over-year AI revenue growth from 2023 to 2024.
This uptick in demand is occurring against a backdrop of constrained supply, creating a dynamic where prices are poised to rise. TrendForce projects a potential 10 percent quarter-on-quarter (QoQ) increase in enterprise SSD prices, fueled by limited finished product inventories and cautious production strategies adopted by suppliers earlier in the year.
The SSD market’s tightening supply situation stems from a series of factors. In the first half of 2025, NAND Flash manufacturers adopted conservative production strategies to stabilize the market following a prolonged period of oversupply. However, the introduction of U.S. reciprocal tariff policies in April disrupted this balance, injecting volatility into pricing trends and complicating market forecasts. While some PC manufacturers accelerated shipments in Q2 to front-run tariff impacts, these efforts did not translate into a meaningful uplift in overall NAND Flash demand, particularly in the retail sector where weakness has persisted.
What sets the enterprise segment apart is the accelerating demand from CSPs and AI server deployments. High-performance AI servers, such as NVIDIA’s GB200, are leading the charge, requiring large-scale, high-speed storage solutions to manage massive AI model training and inference workloads. Simultaneously, increased orders for hard disk drives (HDDs) signal a broader expansion in enterprise data infrastructure, with SSDs and HDDs playing complementary roles in storage architectures.
This renewed demand signals a turning point for the storage industry, particularly for enterprise SSDs, which are likely to remain in undersupply in the near term. As cloud providers scale up their AI capabilities, storage vendors may face challenges balancing supply with this surge in demand — potentially creating a favorable pricing environment for SSD manufacturers but adding cost pressures for hyperscalers and AI-focused enterprises.
Looking ahead, the interplay between AI-driven demand, supply-side constraints, and geopolitical factors such as tariffs will continue to shape the trajectory of the SSD market. While the near-term outlook suggests a price rebound, sustained growth will depend on how suppliers navigate capacity planning, supply chain risks, and the evolving needs of the AI ecosystem.
Baburajan Kizhakedath
