AI Server Boom: Why China’s Market Is Outpacing General Servers

AI Server Market Rapid Growth

According to IDC, China’s total server market will grow about 10% annually over the next four years, while the AI server segment is expanding much faster. In the first half of 2024, the Chinese accelerated server market reached $5 billion, a 63% year‑on‑year increase.

Dominance of GPU Servers and Rise of Non‑GPU Accelerators

GPU‑based servers still dominate, accounting for $4.3 billion (86% of the market). Non‑GPU accelerators such as NPU, ASIC and FPGA grew 182% year‑on‑year, reaching nearly $0.7 billion.

Future Outlook

IDC forecasts that by 2028 China’s accelerated server market will reach $25.3 billion, with a compound annual growth rate above 20% from 2024 to 2028. The share of non‑GPU servers, represented by ASICs, is expected to approach 50%.

Globally, The Next Platform cites IDC data predicting the worldwide server market will hit $189.1 billion by 2027 (CAGR 10.2% for 2023‑2027). Statista projects the global AI server market to grow at roughly 30% annually, reaching $88 billion by 2027 and closing the gap with general‑purpose servers.

Competitive Landscape Shaped by Upstream Chips and Downstream Demand

Domestic leaders such as Inspur and H3C dominate the AI server market, while Ascend‑based vendors like Supercomputing and Huakun Zhenyu are gaining share. IDC data shows that in 2023 the top four x86 server vendors held 28%, 16%, 11% and 10% of the market respectively; in the AI server segment their shares were 36%, 19%, 7% and 14%.

Inspur’s Joint Design‑Manufacture (JDM) model gives it a leading position in both cloud and AI servers for internet customers. H3C, backed by Tsinghua Unigroup, maintains strong footholds in government, telecom and state‑owned enterprises. Supercomputing ranks third and fourth in the domestic x86 and AI server markets.

The Ascend 910B chip has become the primary domestic alternative to Nvidia’s A100, driving rapid growth for Ascend‑based server manufacturers. ODMs such as Huqin Technology are also entering the AI server space, leveraging their electronics R&D and supply‑chain capabilities to achieve multi‑fold revenue growth in 2022‑23.

Operator‑Driven Procurement Boosts Ascend Ecosystem

Since 2024, large‑scale AI server procurements by the three major telecom operators have reinforced Ascend’s market share. China Mobile announced a joint‑procurement of over 10,000 AI servers for 2024‑2025, with Ascend partners winning all major contracts. China Unicom issued a tender for 2,503 AI servers in March 2024, with three of four shortlisted vendors being Ascend partners. China Telecom’s 2023 purchase of 4,175 AI servers and 1,182 switches involved eleven vendors, of which Ascend‑based suppliers accounted for 67%.

Emerging Ascend Ecosystem

The Ascend ecosystem now comprises four categories of partners:

Component partners that develop or manufacture branded products on top of Ascend hardware (e.g., Huakun Zhenyu, Kunlun Technology, ShenZhou KunTai).

Application software partners delivering vertical solutions and proprietary applications (e.g., Zhipu, Elite Intelligence, Huayi Smart, CloudWalk, Gling DeepVision).

Basic software partners providing operators, libraries, model suites and toolchains, as well as fine‑tuning and post‑training services for open‑source models (e.g., Silicon Flow, MianBi Intelligence, LuChen Technology).

Ecosystem operation partners that run AI‑computing centers, innovation hubs or labs in designated regions (e.g., Softcom Smart, TianKuan).