Jon Peddie Research publishes Q2’25 AI Processors Market Development report

115 companies, $13.5 billion invested—consolidation looms.

Jon Peddie Research (JPR), the leading research and consulting firm for graphics and AI technologies, has released its new quarterly report on the AI processor market, covering developments from the final two months of 2024 and the first quarter of 2025.

As of this quarter, JPR has identified 96 startups and 19 publicly held companies for a total of 115 companies actively manufacturing or planning to manufacture AI processors. These companies fall into two broad categories: established public companies and VC/grant-funded startups—what JPR calls “whales” and “startups,” respectively.

Since 2006, over $13.5 billion has been invested in AI processor startups. While the pace of new entrants has slowed since the 2017–2021 boom, the segment remains crowded. JPR analysts predict that, much like past boom cycles in 3D graphics and XR, the number of active AI processor startups will shrink to around 25 by the end of the decade as consolidation accelerates.

“The AI processor segment is overpopulated. Some companies will be acquired, others will run out of money, but innovation will continue to thrive,” said Dr. Jon Peddie, president of JPR. “We’re tracking the winners and the washouts.”

The report includes:

• A comprehensive list of 115 AI processor suppliers
• Analysis of the shifting U.S.–China competitive landscape
• Profiles and interviews with notable startups and established players
• Trends in VC investment and market maturity

While U.S. firms currently lead in AI software and hardware, that leadership is under threat. Chinese vendors like DeepSeek and others are demonstrating increasingly capable hardware, as U.S. policy remains confusing. According to the report, this is driving U.S. companies to move faster, operate leaner, and deliver more efficient, cost-effective technologies to stay competitive, as Chinese companies that would have been customers are now becoming competitors.

“There’s real pressure on U.S. vendors to deliver under changing geopolitical conditions,” said Peddie. “We’ll continue to track these dynamics and bring insight to subscribers.”

Figure 1. Funded AI processor startups and capital investment in the segment.

The new Q2’25 edition of the AI Processors report contains all the above information and more, including an in-depth database of all the suppliers. Subscribers also receive access to direct support, custom data requests, and analyst introductions.

To learn more or to subscribe, visit www.jonpeddie.com.

JPR also publishes a series of reports on GPU quarterly shipments, CPU shipments, the graphics add-in board market, the workstation market, and PC gaming hardware market. The latter covers the total market, including systems and accessories, and examines 31 countries.

Pricing and availability

JPR’s Q2’25 AI Processors Market Development report is available now for $4,000 for four quarterly issues, which includes a half hour of telephone consulting time per quarter, or $2,500 for a single issue with telephone time.

About Jon Peddie Research

Jon Peddie Research has been active in the graphics and multimedia fields for more than 30 years. JPR is a technically oriented multimedia and graphics research and consulting firm. Based in Tiburon, California, JPR provides consulting, research, and other specialized services to technology companies in various fields, including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development. JPR’s Market Watch is a quarterly report focused on PC graphics controllers market activity for notebook and desktop computing.