Global spending on artificial intelligence (AI) infrastructure is projected to reach $758 billion by 2029, according to the latest report from market intelligence firm International Data Corp. (IDC).
IDC said organizations worldwide increased spending on compute and storage hardware for AI deployments by 166% year over year in the second quarter of 2025, reaching $82 billion.
“IDC expects AI adoption to be mainly driven by hyperscalers and cloud service providers, along with AI-based research and education projects gaining importance by the end of the forecast period,” said Lidice Fernandez, group vice president, Worldwide Enterprise Infrastructure Trackers of IDC.
The report showed that the AI infrastructure market has maintained strong growth over the past few years, mainly due to higher investment in servers designed for AI workloads. Cloud and shared environments accounted for 84.1% of total AI spending in the second quarter of 2025. Hyperscalers, cloud service providers, and digital service providers contributed 86.7% of total AI spending in the same period.
Servers made up 98% of total AI-centric spending in the quarter, showing a 173.2% increase from the same period last year. Servers with embedded accelerators remain the top choice for AI platforms, representing 91.8% of total server-related AI infrastructure spending and posting a 207.3% year-over-year growth in the second quarter of 2025.
IDC forecasts that accelerated servers will account for more than 95% of total server AI infrastructure spending by 2029, growing at a compound annual growth rate (CAGR) of 42% over five years.
According to IDC, the changes in the AI server forecast show a major revision in demand for GPUs and other accelerators in the United States. The firm now expects the AI investment surge to continue through late 2025 and into 2026, driven by growing pipelines from large technology vendors and enterprise buyers.
“There is a distinct possibility that more AI-related investment will be announced in the coming years that will add to and extend the current mass deployment phase of accelerated servers well into 2026 and even beyond,” Fernandez said.
IDC also reported that storage spending in AI infrastructure continues to grow, driven by the demand to manage massive datasets used for training AI models, as well as for storing checkpoints and data repositories used during inference phases. Storage spending increased 20.5% year over year in the second quarter of 2025, with 48% of spending coming from cloud deployments.
The United States led global AI infrastructure spending in the quarter with 76% of the total, followed by China with 11.6%, and the Asia Pacific and Japan (APJ) region with 6.9%. Europe, the Middle East, and Africa (EMEA) accounted for 4.7%.
IDC expects China to record the fastest growth in AI infrastructure spending over the next five years, with a projected CAGR of 41.5%, followed by the United States at 40.5%, EMEA at 17.3%, and APJ at 14.3%. By 2029, accelerated servers are expected to make up 94.3% of total AI infrastructure spending globally.