Morgan Stanley: From the cloud to the end device, AI will disrupt smart devices in the next year

Author: Bu Shuqing

Source: Hard AI

With the advancement of edge technology, artificial intelligence is accelerating its deployment from the cloud to mobile terminals. Morgan Stanley believes that in the coming year, Edge AI will become the "central stage" of the global technology industry.

On Thursday local time, Morgan Stanley's analyst team led by Edward Stanley released a research report stating that Edge AI will become the main driving force in the consumer electronics market in the second half of 2024 and 2025. Following smartphones, the application of AI in the laptop market will also experience rapid development.

Morgan Stanley's report predicts that due to the lower power consumption of the new generation of chips, by 2025-2026, the penetration rate of AI PCs will soar from 8% in 2024 to 30% and 50% respectively.

This means that more semiconductors will be integrated into PC devices, expected to bring about a $30 billion revenue growth to global semiconductor companies.

Microsoft Leads the Charge, Qualcomm, Intel, AMD Battle in CPUs, Who Will Benefit the Most?

Edge AI refers to running AI algorithms on user devices such as smartphones, laptops, wearables, drones, AR/VR devices, and cars, rather than sending data to remote servers or cloud platforms for processing like traditional cloud AI.

Compared to the cloud, the advantages of Edge AI lie in its ability to provide faster, more secure, more efficient data processing capabilities, while also reducing costs and enhancing user experience.

2024 is widely seen as the first year of AI PCs. According to previous forecasts by Qunzhi Consulting, the global shipment of AI PCs in 2024 is expected to reach approximately 13 million units.

Meanwhile, Microsoft is working hard to provide Copilot and other AI features in the new version of Windows, opening up a new battlefield for AI PCs. Morgan Stanley believes that Copilot is currently the main killer AI PC application, and as penetration rates increase, third-party developers will also join. To meet the chip demand for AI PCs, Qualcomm, Intel, AMD, and others have entered into a battle mode in CPUs.

Morgan Stanley believes that AI PCs will bring new opportunities to sectors such as PC manufacturing and semiconductors. Specifically, NVIDIA is expected to benefit from this, but with relatively limited impact. ARM is expected to take more market share from Intel and AMD. SK Hynix and Samsung will benefit the most in the storage sector