AI PCs have hit the market. And personal computer makers hope the excitement over generative AI will spur an upgrade cycle.
AI PCs are equipped with neural processing units to enable on-device artificial intelligence functions such as natural language processing, image recognition and speech synthesis. The NPUs work alongside central processing units and graphics processing units.
"In addition to some of the fun features that AI brings, you get a lot of functional stuff as well that helps optimize the PC's performance both from a power standpoint and a capability standpoint," Greg Davis, an analyst at research firm Canalys, told IBD. That means speedier applications and improved battery life for notebooks.
Canalys predicts U.S. shipments of personal computers will rise 5% to 69 million units in 2024. It sees U.S. PC shipments increasing 8% to 75 million units in 2025.
AI PCs: The End Of Windows 10
However, demand for AI PCs will drive only one or two percentage points of the growth, Davis said. The primary driver for domestic PC sales will be enterprises upgrading their hardware ahead of Microsoft ending support for Windows 10 in October 2025.
"IT departments tend not to like unsupported operating systems on their PCs," Davis said. "So, we see a big move to Windows 11 motivating a lot of this refresh."
"The AI PC influence is not zero," he said, "but it's not the bulk driver."
Major PC makers such Dell Technologies and HP already have AI PCs on the market running the latest processors from AMD, Intel and Qualcomm.
While AMD and Intel chips use the traditional x86 architecture, Qualcomm's chips use an Arm-based architecture. The AMD and Intel machines run the current Windows 11, while the Qualcomm-powered PCs run a software version called Windows on Arm.
Microsoft Promoting Copilot+ PCs
Microsoft has branded its AI PCs as Copilot+ PCs in a nod to the software giant's Copilot AI assistant. Many of the new machines even feature a dedicated Copilot button on the keyboard to launch Microsoft's AI assistant.
Flashy features include the ability to summarize long documents, better organize emails and photos, and create new artwork from text prompts.
One feature introduced by Microsoft sparked privacy and security concerns. The planned feature, known as Recall, takes snapshots of everything you do on a PCs, allowing users to search for something they saw or did earlier.
That might be OK for some webpages but not sensitive information like banking and financial data, some observers warn.
Waiting For Killer Apps
AI PCs currently lack a killer app, but that's a short-term issue, Evercore ISI analyst Amit Daryanani said in a client note. Use cases, including those for specific industries, will manifest quickly, he said.
Semiconductor firms AMD, Intel and Qualcomm are hoping for a sales lift from AI PCs. AMD is touting its latest Ryzen Pro series processors for AI PCs. Intel is promoting its Intel Core Ultra processors, while Qualcomm's Snapdragon X Elite and Plus series processors run its Arm-based AI PCs.
Not to be left out, Nvidia also is looking to enhance AI PCs with its graphics processing units.
Additionally, memory-chip vendors such as Micron Technology are hoping to sell higher-end memory devices with AI PCs. That's because AI PCs are likely to require more dynamic random-access memory (DRAM) and higher capacity solid-state drives.
2026 Seen As Big Year For AI PCs
Research firm IDC forecasts flat PC sales worldwide in 2024, with shipments reaching 260.2 million units. Economic weakness in China will be a drag on PC sales overall this year. Excluding China, the PC market is forecast to grow 2.6% this year, IDC said.
While AI PCs are not likely to drive shipment volume right away, they are forecast to fuel an increase in average selling prices, IDC said.
JPMorgan analyst Samik Chatterjee predicted that AI PCs will account for more than 40% of PC shipments in 2026. Volumes will be limited in 2024 and reach a "high-teens" percentage of PC shipments in 2025, he said in a recent client note.
"The introduction of AI capabilities and applications on the PC is likely to usher in a plethora of new workloads aimed at improving productivity, the security of the device, among other things, which overall leads to an enhanced user experience," Chatterjee said.
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