Research Note: IDC PC and Server Markets Analysis - 2025 Outlook
Introduction
The PC and server markets are undergoing historic transformations as AI capabilities become central to both markets, creating sustained growth after periods of contraction. Global PC shipments are projected to reach 273 million units in 2025 with 3.7% growth, driven by the commercial refresh cycle and Windows 10 end-of-service deadline, while AI PCs are rapidly becoming the mainstream standard with projected 43% market share by year-end. The server market has experienced extraordinary growth with 73.4% value increase in 2023 to $244.1 billion, primarily fueled by accelerated computing requirements for AI workloads, and is forecast to reach $354.2 billion by 2025 despite moderating growth rates. Non-x86 architectures are expanding at an even more dramatic pace with 161.6% growth, indicating significant architectural diversification driven by specialized AI processing needs. Organizations across segments must develop clear strategies addressing both the immediate PC refresh cycle opportunity and the longer-term implications of AI-centric computing architectures becoming standard across both client and server environments. Technology suppliers need to prioritize AI capabilities in their product development roadmaps while simultaneously addressing potential supply constraints in GPU-accelerated infrastructure components, which may limit growth in certain market segments. CIOs and IT leaders should evaluate their refresh strategies with awareness of both the timing pressure created by Windows 10 EOS and the transformative potential of AI-enabled computing devices to enhance productivity and enable new workflow possibilities.
PC Market Overview Analysis
The global PC market data reveals a significant recovery trajectory after experiencing unprecedented declines in 2022-2023, with IDC tracking sequential quarterly growth that points to sustainable market rehabilitation. The 4.9% year-over-year growth in Q1 2025 represents a critical inflection point as the market not only rebounds from pandemic-era distortions but begins a genuine expansion phase driven by commercial refresh cycles and next-generation computing capabilities. Windows 10 end-of-service (EOS) in October 2025 is creating a powerful catalyst for enterprise upgrades, with organizations accelerating deployment plans to ensure security compliance and operational continuity. The AI PC transition represents perhaps the most significant architectural evolution in personal computing since the mobile revolution, promising to reshape user experiences and redefine productivity computing with on-device intelligence capabilities. Japan's education sector is emerging as a bright spot with double-digit growth projections, highlighting how regional dynamics and sector-specific investments can significantly impact overall market performance. The long-term forecast showing 292.2 million units by 2028 demonstrates confidence in PC market durability, albeit with more modest growth expectations after the current refresh cycle completes its course.
AI PC Market Development Analysis
The AI PC segment is rapidly transforming from an emerging category to the dominant computing paradigm, with IDC data pointing to accelerating adoption curves across both consumer and enterprise segments. The projected 43% market share for AI PCs by 2025 represents extraordinary category penetration for a technology that barely existed in commercial form just two years earlier, showcasing the industry's rapid pivoting toward AI-centric computing architectures. Year-over-year growth of 165% in 2024 illustrates the explosive demand for on-device AI capabilities, with manufacturers racing to integrate neural processing units (NPUs) and specialized silicon to enable local large language model (LLM) execution and generative AI applications. By 2026, large enterprises are expected to have few options beyond AI-enabled laptops, signaling a complete market transition where AI capabilities become standard rather than premium features in business computing devices. This transformation is being driven by the convergence of cloud AI innovations with local computing, creating hybrid architectures that balance performance, privacy, and power efficiency considerations for various AI workloads. Major silicon providers including Qualcomm, AMD, Intel, and NVIDIA are competing intensely in this space, pushing rapid innovation cycles that are accelerating AI PC capabilities and expanding application possibilities. Microsoft's Copilot+ initiative exemplifies how software and operating system integration is critical to unlocking the value of AI hardware, creating a symbiotic relationship between silicon advancements and software experiences that drives the overall market proposition.
Server Market Trends Analysis
The server market is experiencing unprecedented growth dynamics with 2023 seeing an extraordinary 73.4% value increase to $244.1 billion, fundamentally reshaping the economics and composition of the data center infrastructure landscape. This growth trajectory is being primarily fueled by accelerated computing requirements, particularly the mass deployment of GPU-equipped servers by hyperscalers and large enterprises investing in AI infrastructure capabilities. Non-x86 architectures are expanding at an even more dramatic pace with 161.6% growth in 2023, indicating a significant architectural diversification in server computing driven by specialized AI workloads and performance optimization requirements. While growth rates are expected to moderate in 2024 and 2025 (25.7% and 15.5% respectively), the absolute spending levels continue to expand substantially with the 2025 server market projected to reach $354.2 billion – a tremendous expansion from pre-pandemic server spending levels. This sustained investment highlights the central role of server infrastructure in enabling the AI revolution, with data centers becoming increasingly heterogeneous environments featuring traditional CPUs alongside GPUs and other specialized accelerators. The balance between on-premises deployment and cloud-based consumption of AI infrastructure represents a key strategic consideration for enterprises, with both models showing significant growth rather than one displacing the other.
Server Market Drivers Analysis
Accelerated computing has emerged as the dominant force reshaping the server market landscape, with GPU-equipped servers commanding premium prices and driving substantial revenue growth across the ecosystem. Major cloud service providers are allocating unprecedented capital expenditure toward AI infrastructure expansion, creating ripple effects throughout the supply chain and establishing new baseline expectations for data center capabilities and economics. The global installed base of traditional servers is simultaneously reaching replacement age after pandemic-era deployment delays, creating a dual-track growth environment where both standard and accelerated servers are seeing healthy demand. New CPU generations from Intel, AMD, and increasingly Arm-based vendors are providing technology transition catalysts beyond the AI accelerator trend, giving customers multiple reasons to refresh their infrastructure investments. The extended forecast through 2029 projects a robust 16.3% CAGR, indicating that the current AI-driven growth phase represents a long-term structural shift in server market dynamics rather than a temporary surge. Regional variations in deployment patterns highlight how market maturity, regulatory considerations, and local economic conditions create diverse adoption patterns despite the global nature of the underlying technological trends.
Bottom Line
Its worth mentioning again, the PC and server markets are undergoing historic transformations as AI capabilities become central to both markets, creating sustained growth after periods of contraction. Global PC shipments are projected to reach 273 million units in 2025 with 3.7% growth, driven by the commercial refresh cycle and Windows 10 end-of-service deadline, while AI PCs are rapidly becoming the mainstream standard with projected 43% market share by year-end. The server market has experienced extraordinary growth with 73.4% value increase in 2023 to $244.1 billion, primarily fueled by accelerated computing requirements for AI workloads, and is forecast to reach $354.2 billion by 2025 despite moderating growth rates. Non-x86 architectures are expanding at an even more dramatic pace with 161.6% growth, indicating significant architectural diversification driven by specialized AI processing needs. Organizations across segments must develop clear strategies addressing both the immediate PC refresh cycle opportunity and the longer-term implications of AI-centric computing architectures becoming standard across both client and server environments. Technology suppliers need to prioritize AI capabilities in their product development roadmaps while simultaneously addressing potential supply constraints in GPU-accelerated infrastructure components, which may limit growth in certain market segments. CIOs and IT leaders should evaluate their refresh strategies with awareness of both the timing pressure created by Windows 10 EOS and the transformative potential of AI-enabled computing devices to enhance productivity and enable new workflow possibilities.