It’s hard to talk about any current trends in IT without mentioning AI. Thanks to the breakout success of ChatGPT last year, there has been a surge of similar chatbot applications from Google, GitHub, and other companies. These applications are all powered by large language models (LLMs).

Now a new generation of chips is baking AI into PCs. It could signal a new surge in demand from consumers and businesses keen to take advantage.

Operating locally

AI has use cases across the business and consumer spectrum, from enhancing the productivity of coders to virtual smart home assistants. Once the processing power needed by AI algorithms could only be delivered by back–end cloud servers – often in supercomputers. The emergence of a new type of chips has made it possible for AI to become a reality  at device level.

AMD’s Ryzen AI, Apple’s M3, Qualcomm’s Snapdragon X Elite and Intel’s Core Ultra chip are among current AI designs making their way into PCs, although more are expected to follow. They feature dedicated Neural Processor Units (NPUs), which help to accelerate AI tasks/applications locally rather than needing to reach out to cloud servers.

More use cases, more demand

The impact of these could be significant. PC demand has been depressed since a pandemic-era surge in sales. But as more use cases emerge, organisations will begin to covet AI–enabled devices in order to stay competitive, while consumers will see them as a must-have for creative tasks and gaming.

This won’t happen overnight. In Q4 2023, according to CONTEXT’s European distribution data, 10% of PCs were based on AI–capable chipsets. All of these were Apple’s M or AMD, but we will soon see products based on more recently launched chips, and new players could enter the market. This could bring about changes to the processor vendor landscape: as of the last quarter of 2023, Intel held 73% of the European PC distribution market followed by AMD (17%) and Apple (7%). But new chip launches will enhance the options available to customers. Qualcomm for example, may successfully expand its long–established presence in portable devices to notebooks.

This will likely start to influence the market towards the end of 2024, and then even more clearly in 2025.

CONTEXT subscribers will soon be able to read full details on the processor vendor landscape and on AI PC sales in their SalesWatch Distribution and Total Market reports.

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