Have You Tried To Buy A Server Lately?

June 22, 2026 Timothy Prickett Morgan

If you are trying to get new servers for you company, you better brace yourself for some very serious sticker shock. It’s crazy town out there. The GenAI boom has gone from chemical explosions to nuclear ones, and the hyperscalers, cloud builders, and now the AI model builders are ponying up huge sums for AI systems, driving the total market to an expected $330 billion this year. And all that AI server buying puts these tech titans at the front of the line for DRAM main memory, flash storage, CPUs, and GPUs.

The radical price increases for these components is reflective of too many buyers chasing too little supply, and as we pointed out in our lead story, there is definitely some opportunistic price hiking going on, too. And this is driving the server market to new highs.

The market researchers at IDC have cased the market for the first quarter, and they reckon that the world consumed $122.6 billion in servers, up 30.4 percent year on year. That is twice the size in one quarter of what the server market used to be for an entire year only a decade ago before the first wave of AI – machine learning algorithms – started to rise.

The interesting bit to us is that IBM doesn’t really have an AI server story that is mainstream and its combination of Power11 CPUs and Spyre AI accelerators has yet to take off as far as we can tell. But even if it does as we expect, the entire Power Systems business plus AI acceleration using Spyre accelerator sidecars might only drive maybe $4 billion to $4.5 billion in annual sales at some point. This is literally a drop in the bucket against maybe $500 to $650 billion in overall server sales. It is not even one point of market share, even if the technology is excellent and Power Systems iron is vital to those customers who have it as the foundation of their back office systems. Even if you add in the System z mainframe business, which is considerably larger than the Power Systems business, IBM no longer makes the top five vendor rankings from IDC. (We think it makes the top ten if you ignore the original design manufacturers, or ODMs, who supply servers to the hyperscalers and big clouds, but that is a guess.)

Thanks to its AI server boom – which is really Nvidia tapping Dell as the OEM server maker of choice and Dell earning that through its masterful supply chain – Dell is the undisputed OEM server seller, with $20.3 billion in sales in the first quarter of 2026. Supermicro is less than half the size of Dell, Lenovo is half again as big, and Hewlett Packard Enterprise is even smaller than that.

The world is completely different from only a decade ago, and is even more changed since the Dot Com Boom two and a half decades ago.

IEIT Systems, by the way, is a subsidiary of Inspur that was renamed to get around sanctions imposed by the US government preventing it from selling gear in America. These sales by IEIT Systems are for the Chinese market as well as other Asian, African, and European markets.

Breaking down Q1 2026 by country and region, the United States clearly dominated server spending, with the US accounting for $79.6 billion in revenues, up 24.1 year on year. China consumed $19.2 billion in servers, up 30.9 percent, and Japan contracted by 16.1 percent against a tough compare. (IDC did not give the revenue for sales of servers in Japan.) The Asia Pacific region excluding Japan and China drove $9.7 billion in sales, up 45.2 percent. Western Europe bought $7.6 billion in servers in the first quarter, up 80.6 percent.

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