Hyperscale cloud CapEx declined 2 percent in 2Q 2023, as some of the cloud service providers undergo a digestion cycle. However, Microsoft and Google will remain in a CapEx expansion cycle with double-digit growth in 2023 from both greenfield investments and refresh, according to a recently published report by Dell’Oro Group.
“Despite recent heightened investments towards AI infrastructure, hyperscale cloud CapEx has been decelerating as some of the major cloud service providers are overdue for a CapEx digestion cycle and have been optimizing their spending on general-purpose infrastructure,” said Baron Fung, Sr. Research Director at Dell’Oro Group. “Meanwhile, enterprise IT spending remains depressed, with revenues for the server and storage OEMs down double-digits year-over-year for two consecutive quarters. We anticipate demand to gradually improve heading into 2024, driven by the introduction of new server platform refresh from Intel and AMD, as well as a shift towards accelerated computing for AI/ML applications,” explained Fung.
In India too, employees performing AI and ML-led work now constitute 20 per cent of the workforce of telecom service providers from just 7 per cent in July-September 2022.
Reliance Industries has augmented its AI/ML workforce to build India-specific solutions in the area. Jio Platforms already has multiple AI/ML departments. Vi has employed people according to global AI standards.