Morgan Stanley has released insights indicating that the evolution of artificial intelligence towards more autonomous functionalities will lead to a substantial increase in demand for central processing units (CPUs) and memory. This shift is expected to reshape data center architectures and expand investment opportunities beyond the historically dominant graphics processing units (GPUs).
The brokerage noted that as AI transitions from merely responding to prompts to planning and executing tasks independently, the computing bottleneck is moving towards CPUs and memory. This change is projected to enhance the general-purpose compute intensity significantly.
Market Growth Projections
According to Morgan Stanley, the rise of agentic AI could contribute between $32.5 billion and $60 billion to the already robust data center CPU market, which is anticipated to surpass $100 billion by 2030.
Understanding Agentic AI
Agentic AI refers to systems capable of autonomously planning and executing tasks rather than just reacting to user inputs. This advancement is expected to drive a new wave of AI development focused more on coordination than raw computational power.
Implications for Memory Demand
With the increasing reliance on CPUs as the control layer for complex AI systems, demand for memory is also expected to surge. This shift will broaden AI investments to include not only chipmakers but also memory suppliers and manufacturing sectors.
Potential Beneficiaries
Several companies are positioned to benefit from this evolving landscape:
- Nvidia, AMD, Intel, and Arm in the CPU and accelerator markets
- Micron, Samsung, and SK Hynix in memory production
- TSMC and ASML in chipmaking and equipment
Conclusion
The anticipated shift in AI chip demand highlights the importance of CPUs and memory in the future of AI technology. As companies adapt to these changes, those involved in the supply chain may experience increased pricing power and new growth opportunities.
