Morgan Stanley sees agentic AI widening chip spending beyond graphics processors to CPUs

Morgan Stanley said increasingly autonomous artificial intelligence could boost demand for central processing units (CPUs), reshape data center buildout and widen investment beyond the graphic chips that have dominated the AI boom so far.

"As AI transitions from generation ‌to autonomous ⁠action, ⁠the computing bottleneck is shifting towards CPU and memory, driving a step-change in general-purpose compute intensity," Morgan Stanley said in a note on Sunday, adding that demand for graphic processing units (GPUs) remains strong.

Morgan Stanley estimates agentic AI could add $32.5-60 billion to a ⁠data-centre CPU ‌market already exceeding $100 billion by 2030.


Agentic AI refers to systems that can plan ⁠tasks and take actions on their own, rather than simply responding to prompts.

Morgan Stanley said the next wave of agentic AI will be driven more by coordination than just raw computing power.

CPUs are increasingly acting as the control layer for AI systems that manage ‌multistep tasks.

Memory demand is set to rise sharply, widening AI spending beyond GPUs to chipmakers, memory suppliers and ⁠manufacturing.

Companies in supply-constrained parts of the ecosystem could gain more pricing power, the brokerage added.

Morgan Stanley sees the following companies as potential beneficiaries - Nvidia, AMD, Intel and Arm in CPUs and accelerators; Micron, Samsung and SK hynix in memory; TSMC and ASML across chipmaking and equipment.