Analysts Predict AI PCs will Revolutionize the Industry in the Emerging Era of Computing

Analysts predict that the decline in personal computer sales will come to an end next year due to the increased demand among consumers for newer PCs, including those equipped with artificial intelligence features, which is expected to further boost the market.

According to IDC data, global PC shipments experienced a 7.2% drop in volumes in Q3 2023 compared to the same quarter in 2022, due to macroeconomic headwinds, weak retail and commercial demand, and a shift in IT budgets away from device purchases. However, Canalys predicts that the boom in generative artificial intelligence could boost PC sales as consumers look for AI features that enhance productivity and leisure experiences. The firm estimates that 60% of PCs shipped in 2027 will be AI-capable and states that PCs are set to evolve in both software and hardware domains to keep pace with this trend.

AI PCs will enable personalized assistance, run generative AI applications using smaller data sets, and provide more options for voice and gesture-based commands. They will also enable enterprises to run AI models with proprietary data locally for greater security. AI PCs will offer real-time language translation and transcription on conference calls and enhance non-playable characters in video games with conversational personalities.

AMD's Ryzen 8040 Series notebook processors for AI PCs, which feature a neural processing unit (NPU) integrated with the central processing unit, were announced on December 6th 2023. NPUs can perform specific tasks such as image recognition and natural language processing and are more power-efficient than graphics chips used for AI in cloud data centers. PCs with NPU-enabled processors will be available in Q1 2024 from leading hardware companies including Acer, Asus, Dell Technologies, HP, Lenovo, and Razer.

Intel has also launched its new Intel Core Ultra mobile processors, which feature a built-in neural processing unit for power-efficient AI acceleration. The first PCs with Intel Core Ultra have already shipped since December, with more expected to be released in 2024 by major computer manufacturers. Intel Core Ultra spreads AI acceleration capability across a central processing unit, graphics processing unit, and neural processing unit. Intel will hold a press conference on January 8th, 2024 at CES to promote AI PCs with partners Dell, HP, Lenovo, and Microsoft, where they will showcase their lineup of AI PCs at an open house.

• If AI PCs take off, the resulting refresh cycle would be a positive for the entirety of the PC supply chain, Wedbush analyst Matt Bryson said in a recent client note. That includes makers of components like memory chips, he said.

• AI PCs are expected to lift average selling prices for PCs, providing a revenue boost to PC makers and processor suppliers, analysts say. With an installed base of 1.5 billion PCs worldwide, that creates an "exciting" sales opportunity, Dell's Burd said.

• "Hallelujah to this category" of AI PCs, Alex Cho, president of HP's Personal Systems unit, told IBD.

• "While you can run AI models in the cloud, there will be distinct value and opportunity in running AI models locally on the PC because of the unique benefits around cost, privacy and overall performance and personalization," HP's Cho said.

• While at first the AI-integrated PCs will be aimed toward specific segments of the enterprise market, but with cost reductions and more use cases they could find their way to a broader market, IDC analysts said.