Challenges in AI PC Business Growth Amidst Rising Shipments

The landscape of personal computing is undergoing a transformative shift with the emergence of artificial intelligence (AI) PCs, poised to revolutionize the way tasks are executed locally on devices.
AI PC for online education businessResearch firm Gartner notes that the integration of AI into PCs is not projected to substantially influence end-user spending beyond anticipated price adjustments. Business device buyers will require compelling reasons to invest, while software providers must harness the potential of on-device AI to showcase its tangible benefits.

Shipments of AI PCs are anticipated to soar from nearly 50 million units in 2024 to surpass 167 million by 2027, according to projections by IDC. By the end of this period, AI PCs are expected to constitute nearly 60 percent of all PC shipments worldwide.

In parallel, Gartner estimates a modest 3.5 percent increase in overall PC shipments to 250.4 million units in 2024, indicating a steady trajectory amidst the evolving landscape of AI-powered computing.

“As we enter a new year, the hype around generative AI has reached a fever pitch, and the PC industry is running fast to capitalize on the expected benefits of bringing AI capabilities down from the cloud to the client,” Tom Mainelli, Group Vice President of Devices and Consumer Research at IDC, said.

Tom Mainelli highlighted the anticipated advantages, including enhanced user productivity, reduced inferencing costs, and heightened privacy and security afforded by on-device processing.

Traditionally, AI tasks on PCs were executed using the central processing unit (CPU) or the graphics processing unit (GPU), which often compromised device performance and battery life due to inefficiencies in AI processing. To address this limitation, PC silicon vendors have integrated AI-specific silicon — neural processing units (NPUs) — into their SoCs, facilitating more efficient AI processing.

IDC categorizes NPU-enabled AI PCs into three types:

Hardware-enabled AI PCs: Equipped with NPUs offering <40 tera operations per second (TOPS) performance, enabling specific AI features within apps to run locally. Key players in this segment include Qualcomm, Apple, AMD, and Intel.

Next-generation AI PCs: Featuring NPUs with 40–60 TOPS performance and AI-first operating systems (OS) that embed AI capabilities within the OS and apps. While chips from Qualcomm, AMD, and Intel are slated for release in 2024, Microsoft plans significant updates to Windows 11 to leverage high-TOPS NPUs.

Advanced AI PCs: Expected to offer >60 TOPS of NPU performance in the future, although no concrete announcements have been made by silicon vendors yet.

While shipments of hardware-enabled AI PCs are anticipated to escalate rapidly over the next few years, IDC foresees next-generation AI PCs dominating the market by 2027, with shipments doubling that of hardware-enabled counterparts. This trend is expected to be driven largely by commercial buyers, although consumers stand to benefit from advancements in PC gaming and digital content creation.

The transition of AI workloads from the cloud to the client is driven by three primary technical motives: performance enhancement, privacy and security augmentation, and cost reduction.

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