July 17, 2025, New York The global AI semiconductor market has reached $85 billion in revenue for 2025, driven by record-breaking quarterly earnings from Nvidia and AMD. The two chipmakers dominate AI training and inference hardware, supplying hyperscalers like AWS, Microsoft and Google with next-gen GPUs and accelerators.

According to a report by Gartner released this morning, the AI chip segment has grown 27 percent year-over-year, outpacing overall semiconductor industry growth by more than 3x.

Nvidia and AMD Lead the Market

• Nvidia Q2 revenue: $24.8 billion (up 41 percent YoY)
• AMD Q2 revenue: $15.1 billion (up 33 percent YoY)
• Top product lines: Nvidia Blackwell H200, AMD Instinct MI400
• Key sectors: AI cloud computing, enterprise inference, edge vision systems

“Demand is outstripping supply for high-end AI chips,” said Patrick Moorhead, tech analyst at Moor Insights. “We’re seeing every major cloud vendor deploying custom racks based on Blackwell or Instinct MI400.”

Asia-Pacific Drives Growth

China, South Korea and India have significantly increased investments in data centers and AI infrastructure. Alibaba Cloud and Tencent have both doubled their AI compute capacity year-over-year, according to industry disclosures.

TSMC and Samsung, meanwhile, are expanding 3nm and 2nm chip foundry output to meet OEM demand through early 2026.

Competition and Innovation

Intel, Amazon’s Annapurna Labs and startups like Tenstorrent and Groq are actively competing in the inference chip space, focusing on low-power edge and embedded AI workloads. Google’s TPUv6, announced last quarter, is also expected to enter mass production by Q4.

AI accelerator development is increasingly being paired with custom software stacks like CUDA X, ROCm AI Suite and OpenXLA for optimal performance.

Outlook for 2026

Gartner projects the AI chip market to surpass $100 billion by mid-2026, with generative AI, digital twins and AI robotics driving demand. Nvidia is expected to launch its Blackwell Ultra series in Q1 2026, while AMD is rumored to unveil a new dual-die Instinct product at CES 2026.

Conclusion

The explosive growth of AI chip revenue highlights how critical hardware innovation has become to powering the next generation of AI applications. As chipmakers race to meet demand, the landscape is being reshaped by both performance breakthroughs and geopolitical supply chain dynamics.

Sources: Gartner, Nvidia Newsroom, AMD Investor News