Cloud giants betting big on AI innovation

Tier 1 cloud service providers are boosting enterprise AI innovation thanks to increased investment in enabling technology.


This is one of the findings of new research from leading independent analyst firm Dell’Oro Group. Baron Fung, Research Director with Dell’Oro, said there is clear evidence that cloud providers are upping their spend on new infrastructure tailored for AI workloads. He projects that the spend on accelerated compute servers in particular will reach double-digit growth over the next five years, outpacing other data center infrastructure.


“An accelerated compute server, equipped with accelerators such as a GPU, FPGA or custom ASIC, can generally handle AI workloads with much greater efficiency than general purpose servers,” commented Fung. “Numerically speaking, deployment of these servers still represents only a fraction of cloud service providers’ overall server footprint. Yet, at ten or more times the cost of a general-purpose server, accelerated compute servers are becoming a substantial portion of the data center capex.”


Fung singled out Facebook which has announced plans to increase capex by more than 50% in 2022: “Investments will be driven by AI and machine learning to improve ranking and recommendations across Facebook’s platform,” he explained. “In the longer term, as the company shifts its business model to the metaverse, capex investments will be driven by video and compute-intensive applications such as AR and VR. At the same time, Tier 1 Cloud service providers, such as Amazon, Google, and Microsoft, also aim to increase spending on AI-focused infrastructure to enable their enterprise customers to deploy applications with enhanced intelligence and automation.”


In the year since Fung last reported on AI data center infrastructure, he said new architectures and solutions have emerged that could pave the way for the further proliferation of AI in the data center.


This event will be useful for any AI stakeholder.

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