AI PC hype bubble swells, but software support lags marketing

Resistance is futile, upgrades are inevitable and so is hardware margin inflation

AI hype is now infecting a computer industry that just months ago was still wrestling with how best to define an AI PC. It won't come as a surprise that the biggest brands could be creating short-term customer expectations that go unfulfilled.

System builders and chip giant Intel have settled on the AI PC as a way to drive recovery of desktop and laptop sales in a struggling market following a boom in the early years of the pandemic.

Yet as with many innovations, the software lags the hardware, with Microsoft yet to support AI PC PCs in Windows and requiring a rewrite of applications needed to use specialized hardware such as NPUs.

An AI-optimized version of Windows is expected at some point later in 2024, but until its arrival, there is little immediate benefit to be gained by owning a PC emblazoned with AI branding.

Ranjit Atwal, research director at Gartner, agreed, telling us in December that while AI hardware might be ready, the software was not: "In the short term, the changes expected may not be transformative enough to drive this faster adoption of AI PCs."

Even senior execs at Lenovo and HP admitted at a Canalys event in October they were struggling to define what would make an AI PC, and the director of AMD's commercial client business told The Register less than six months ago that AI on the desktop was "not yet a thing."

However, analysts now forecast an AI PC boom for 2024, in what appears to be a textbook marketing exercise to get buyers to upgrade their systems to take advantage of the expensive new kit. And all of this, of course, has potential to lift PC vendor margins.

Analysts projections suggest that sales of AI PCs will grow swiftly this year and for the next several years, bringing relief from the doldrums that the PC market was stuck in.

According to Gartner, AI PCs are set to account for 22 percent of all PC shipments in 2024, making for a total of 54.5 million this year. That will rise to 43 percent of all PC shipments during 2025 if the market researcher is correct. This seems like something of an about turn in a matter of months.

Smartphones are on a similar journey, Gartner believes, with AI-capable models also representing 22 percent of shipments this year.

IDC said in October that AI PC use cases had not been well articulated, but reckoned generative AI could be a "watershed moment" for the PC industry, and it too talked up the inflationary impact on margins.

This week, IDC forecast AI PCs will make up nearly 50 million units this year, and it expects this to jump to 167 million in 2027, when they would represent nearly 60 percent of all PC shipments worldwide.

Last month, Canalys forecast that one in five units shipped in 2024 would be an AI PC, and this would rise to 60 percent of PCs shipped in 2027.

So what is an AI PC? Analysts now say they have the answer

IDC defines an AI PC as "personal computers with specific system-on-a-chip (SoC) capabilities designed to run generative AI tasks locally." But a standard CPU can run AI tasks locally, so there must be more to distinguish an AI PC from a plain old boring PC than that?

Gartner's definition is a PC "equipped with dedicated AI accelerators or cores, neural processing units (NPUs), accelerated processing units (APUs) or tensor processing units (TPUs), designed to optimise and accelerate AI tasks on the device."

So an AI PC is a personal computer with new accelerator hardware built-in, like the NPU that is integrated into Intel's Core Ultra processors launched last year, which coincidentally is when the chip giant itself started pushing the AI PC.

In case you hadn't got it yet, Intel has published its own "What is an AI PC?" guide which explains that an AI PC has "a CPU, a GPU and an NPU, each with specific AI acceleration capabilities."

Just like Core Ultra processors have a CPU, GPU and NPU built in.

Intel claims that the NPU allows you to "handle artificial intelligence (AI) and machine learning (ML) tasks right on your PC instead of sending data to be processed in the cloud."

This is echoed by Gartner, which claims an AI PC "provides improved performance and efficiency in handling AI and GenAI workloads without relying on external servers or cloud services."

It is generally accepted, however, that while training AI models requires enormous compute resources and is possibly best carried out in the cloud, the inferencing work – running the model – is less computationally demanding. Arm chip maker Ampere was last year saying that traditional CPUs are good enough for this kind of work anyway, and we're sure we've heard similar from Intel in the past.

And what exactly do you need an AI PC for? According to Intel: "In the near-term, the AI PC world involves personal assistants and smaller AI models running directly on your PC."

These will "use your data to offer personal, private, more secure AI enhancements for things you already do every day – taking meeting minutes, organizing a fantasy football league, automating enhancements for photo and video editing, or laying out the perfect itinerary for a family reunion based on everyone's arrival and departure times."

This all still sounds a bit vague, and also assumes that the software exists to take advantage of those AI PC features.

"As we enter a new year, the hype around generative AI has reached a fever pitch, and the PC industry is running fast to capitalize on the expected benefits of bringing AI capabilities down from the cloud to the client," said Tom Mainelli, IDC group vice president for Devices and Consumer Research.

"Promises around enhanced user productivity via faster performance, plus lower inferencing costs, and the benefit of on-device privacy and security, have driven strong IT decision-maker interest in AI PCs," he claimed.

So while the AI PC appears to be mostly marketing fluff at the moment, it seems that all PCs will be AI PCs eventually as users gradually replace their older hardware. IDC believes thinks shipments will ramp up quickly over the next two years, and next-generation AI PCs will dominate by 2027.

This refers to AI PCs with a high performance NPU (40–60 tera operations per second) and an "AI-first operating system" that enables "pervasive AI capabilities in the OS and apps."

Microsoft is expected to roll out major updates to Windows 11 to take advantage of such hardware, IDC claims.

Many of these AI PCs will be sold to commercial buyers, IDC forecasts, but consumers "will have much to look forward to in the coming AI PC age," including potential improvements in PC gaming and digital content creation.

What do you think, dear readers? Tell us in the comments below. ®

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