Edge AIoT Chipset Revenue to More Than Triple by 2031 as Rising Cloud Costs Accelerate Local AI Adoption

The global edge AIoT chipset market reached US$32.7 billion in 2025 and is expected to more than triple by 2031, according to global technology intelligence firm ABI Research. The firm finds that edge gateways and on-premises edge servers will be the leading growth engines, as enterprises increasingly adopt cost-effective retrofit strategies to bring AI closer to operations without fully replacing legacy infrastructure. ‌

“Edge AIoT adoption is no longer just about adding intelligence to devices; it is about aligning AI investment with operational realities,” says Will Wong, Principal Analyst at ABI Research. “Enterprises are moving toward architectures that reduce cloud dependence, improve resilience, and create the low-latency foundation needed for physical AI, but vendor success will depend on how well they address deployment friction and human-centric bottlenecks.” ‌

ABI Research says the main driver behind this market expansion is OPEX optimization, as edge AIoT lowers cloud storage, data ingress, and networking costs at a time when memory supply constraints are pushing cloud-related expenses higher. Additional tailwinds include edge MLOps for fleet-wide scalability, data sovereignty and privacy requirements such as the EU AI Act, GDPR, and HIPAA, and growing demand for real-time, embedded intelligence in autonomous and safety-critical environments. ‌

The research also highlights that migration patterns will shape hardware demand. In brownfield environments, retrofit approaches that preserve legacy sensors while adding gateways or on-premises compute are the most feasible path, favoring vendors such as Siemens, STMicroelectronics, Silicon Labs, and BrainChip that help reduce deployment complexity. In contrast, greenfield deployments and sectors with routine redesign cycles, including automotive, smart home, and robotics, are creating stronger opportunities for TinyML and AI-embedded endpoint hardware. ‌

“Market players that connect technical capability with ease of deployment, lifecycle management, and customer-specific operational needs will be best positioned to capture long-term value,” Wong says. “In a fragmented and increasingly competitive ecosystem, simplifying adoption for both IT and nontechnical teams can become a meaningful differentiator and, in some cases, support price premium opportunities.”

These findings are from ABI Research’s The Edge AIoT Hardware Playbook: Navigating the Shift from Basic IoT to Embedded Intelligence report, part of the company’s IoT Hardware research service, which includes research, data, and ABI Insights.