After decades being dominated, it’s now hardware’s time to start “eating the world”—at least according to consultancy Deloitte’s Tech Trends 2025 report, which argued access to appropriate hardware is now the critical factor for firms competing in markets like AI.
Deborah Golden, Deloitte’s US chief innovation officer, sat down with IT Brew at CES 2025 to talk more about why.
This interview has been edited for length and clarity.
In the report, you talk about hardware getting its chance. Could you tell me a little bit about your perspective on why that is?
The hardware space is starting to have its own time. Chips are front and center. We know that there’s a number of most valuable and watched companies that are specializing in chips as it becomes an invaluable resource for AI workloads. And as we see that, this is becoming obviously super important for an AI-embedded culture. We know that that’s going to continue to shift where computing needs to be.
So, when we think about what [that means] for future-proofing technology and infrastructure, one thing we know for sure—we’re going to have to start to think about what that means for technology infrastructure, for cloud computing costs, for enhanced data privacy. And we also know for sure, what does that mean for image generation, text analysis, data recovery, energy costs. I mean, we know these things are happening—that there is, right now, a huge boost. No pun intended.
Looking at what…that mean[s] for data centers, and data center usage, and land usage, and energy costs, if we think about end user computation on a large scale, what does that mean? And so all of that comes back to hardware usage. And by the way, hardware for me could be anything from hardware for the computer to hardware for the data center, hardware for the actual models.
I will push back a little in the sense that there seems to be a lot of competition for hardware right now, but for the average company, they don’t even have access to this hardware—generally it feels like there’s a relatively small handful of big firms fighting for hyperscaler status, and for everyone else it’s still software or SaaS.
That’s where I think you also started to see a bit of interest lately…We went from only LLMs, to now we’re going to have truncated LLMs. You had LLMs, and you had smaller LLMs, right? Things that could be consumable. So, I do think, to your point, you’re going to see things that come in different sizes, so that we’ll still see things that can be consumable by a variety of different people. But they’re still going to take up size and scale. And I think if you bring in things like quantum computing there, all these things are going to just need more space.
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So, even with imagery. And one of my other things that I geek out on often is space—like actual outer space. So, when we start to talk about things like Earth observation or using space data, all those things just need actual space, and they need time to actually leverage that. And so when you start talking about optimization, you’re going to need the hardware to actually be able to run simulations for “the new math.” You’re going to need GPUs to be able to run workloads and so forth.
You absolutely are going to need to be able to also find the counterbalance in sustainability from an energy perspective, from renewable sources, from applications, and also from a hardware improvements perspective. We’re absolutely not where we need to be as it comes to revolutionizing data centers, enabling reduced latency, or even as we look at distributed construction or improved reliability.
Do you foresee in the mid-term future there being a weakening of the sort of stranglehold on the market held by the relative handful of hyperscalers, in terms of who’s handling the compute for this stuff?
I don’t know if it changes that landscape. I do think, as with any of our tech…You’re going to still see continued [mergers and acquisition] activity, because you’re going to need to see that infrastructure resurgence one way or another. So, either divestiture or continued acquisition or more options for companies to be able to hit exactly what we’re talking about, because you’re going to need to see these advancements in the areas to hit the AI requirements. So, whoever hits the renewable sources, energy saving applications, and hardware improvements is going to have to bring all the costs down in order to make some of these things more affordable across the board.