Bare metal boom: On-prem server sales for HPC and AI up 20% this year
Firms still want kit on-premises, but spike in revenue is as much about increased costs as higher sales
On-premises high-performance compute (HPC) server sales have increased by nearly 20% year-on-year, according to Hyperion Research. This growth is primarily driven by the demand for AI processing capabilities. In the first half of 2026, revenues from these servers reached $16.5 billion, up 19.9% from the previous period. However, the number of units shipped grew by only 4.4%, indicating that the higher prices are due to the use of expensive components like GPUs and accelerators, as well as increased memory costs that have tripled or quadrupled since last year.
Hyperion Research's tracking of the HPC market is based on surveys of both buyers and suppliers. The company's figures show a major shift in overall HPC market growth, with AI, large language models (LLMs), and the purchase of GPU/accelerator-based systems playing a significant role. This trend was observed a couple of years ago when Omdia reported that server sales revenue growth outpaced actual unit shipments, as customers focused on investing in highly configured server clusters for AI.
Dell has now become the leading HPC vendor, surpassing HPE, with server revenues of $4.2 billion for the first half of 2026. HPE, which acquired supercomputing specialist Cray for $1.3 billion in 2019, previously held the top spot in terms of market share and revenue. Dell now holds a 24% share of the market, while HPE holds 21%. Lenovo and China-based Sugon each have a 4% share, while the remaining 45% is attributed to other vendors such as Bull, Supermicro, Penguin Computing, and NEC.
The HPC infrastructure market is cyclical, with HPE recognizing significant revenue in 2025 from sales of multiple exascale-class leadership machines. However, such significant purchases are not annual, according to Hyperion Research CEO Earl Joseph. Enterprises and institutions continue to invest in their advanced computing infrastructure to replace aging machines and integrate AI into their workflows to support their businesses and missions.
The growth reflects both an increase in the number of units purchased and significant price increases. HPC systems serve as the backbone for many AI and AI-related applications, contributing to the overall HPC market's new growth level.
Written by urgent.news from The Register Science's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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