ai-enabled personal computers: Disruptor: AI-enabled personal computers to spur growth

Artificial intelligence-enabled personal computers, or AI PCs, are the next big thing in the space. Such devices are expected to see an uptick in demand next year, experts said, with adoption in India likely to take off by 2027-28.

“AI-enabled laptops are the next big disruption for laptops,” said Faisal Kawoosa, chief analyst at research firm Techarc.

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These PCs can run large language models (LLMs) and AI applications on-device, rather than on the cloud, as they have AI-capable chipsets. Smaller large language models of 8-15 billion parameters will be able to run on such AI PCs, according to Akshara Bassi, senior research analyst at Counterpoint Technology Market Research.

Global computer chip makers Intel and Advanced Micro Devices (AMD) said during recent earnings calls that AI integration is a major opportunity for growth in the PC market, Reuters had reported. Intel CEO Pat Gelsinger said AI PCs represent an “inflection point” in the PC industry, while AMD CEO Lisa Su said AI PCs will account for a growth phase.

“The inclusion of an NPU (neural processing unit) is likely to be central to the next wave of hardware upgrades through the second half of this decade,” said Ranjit Atwal, senior director analyst at Gartner.

The NPU is a specialised hardware component needed for crucial applications involving AI, generative AI and deep learning.

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Bassi said the global PC industry saw a decline in 2023 with many companies “bottoming out” amid slowing demand after the Covid pandemic and rising inflation. But AI PCs will “spur growth,” she said, and next year will see AI PC launches in India.Though deployment will begin in the next few months, India will have a niche market till 2027-28, Bassi said, when AI integration becomes standard in PCs, making it more affordable.

“At what price companies and OEMs (original equipment manufacturers) make AI PCs available will be a major determinant for adoption (in India),” she said.

Globally, Counterpoint Research sees AI PCs growing at 50% CAGR by 2030, with 2020 as the base year.

Apart from Intel and AMD, which dominate the PC market, smartphone-focused chipmakers such as Qualcomm and Mediatek sense opportunity and are getting into the AI PC space with NPU and APU (AI processing unit) chipsets that can be used in PCs as well, said Kawoosa.

IDC senior market analyst Bharath Shenoy said the fresh demand for PCs owing to AI integration presents an opportunity for domestic manufacturers.

“India has an opportunity not just to assemble PCs for local consumption, but also to export as AI integration becomes mainstream and starts providing new use cases to PCs,” he said.

Demand will be generated from specific segments in the country. For example, software businesses will use some AI PC capabilities, like translation of meetings into different languages, Atwal said.

Those wary of data sharing and wanting information localised will also prefer AI PCs over cloud-based AI applications. This includes the financial services, which deals with sensitive data. “For financial and confidential data, anybody and everybody would prefer device-based computing,” said Kawoosa.

According to Bassi, AI PCs will see early traction from segments with higher workloads and those that expect immediate results with AI, such as gamers, developers, the creator community, entertainment and media.

India’s startup ecosystem too might generate some demand for AI PCs.

“Many of the modern-era startups are early adopters of technology and there would be good traction for AI-integrated PCs from the startup ecosystem,” said Shenoy.

Further, in a country like India where connectivity may be erratic, people may prefer device-based AI rather than cloud for use cases that require smooth and continuous running of applications without network interruptions, Kawoosa said.

For now, meaningful AI integrations will be seen only in the premium segment of laptops, at the Rs 80,000 and above (or $1,000 equivalent) range, Kawoosa said. “The $1,000 laptops being sold today are no more than 8-9% of the total number of units. To begin with, probably half of them, which means 2-3% of the laptops sold in 2024, would be AI-capable laptops,” he said.

AI-integrated PCs currently provide for features such as noise cancellation, image processing, enhanced sound and video and a better gaming experience, experts said.

“More advanced tasks will emerge in gaming, creative, and even business scenarios, such as better spell checking and proofreading,” said Atwal. Areas such as IT troubleshooting and diagnostics will also operate with less friction for the user due to AI, he added. Security is another function where on-device AI will have a near-term impact such as smarter camera features for facial recognition or multifactor authentication.

At the same time, India is more likely to see greater adoption of AI smartphones given the low PC penetration, experts said.

“Pricing and possible use cases would also be an important factor for adoption. PC vendors might need to market the possible use cases well and justify the additional cost,” said Shenoy.