Arm’s Data Center CPU Market Share Expected to Soar to 50%

Arm's Data Center CPU Market Share Expected to Soar to 50%

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Arm's Data Center CPU Market Share Expected to Soar to 50%

According to a senior executive at Arm, the company’s share of the global data center CPU market is expected to surge from approximately 15% in 2024 to 50% by the end of this year, driven by the booming development of artificial intelligence.

Arm’s CPUs are often used as the “host” chips in AI computing systems, acting as traffic controllers for other AI chips. For instance, NVIDIA utilizes Arm-based Grace chips in some of its advanced AI systems, which include two Blackwell chips.

Mohamed Awad, Arm’s infrastructure chief, stated that Arm’s technology consumes less power in many cases compared to competing processors produced by Intel and AMD. Given the massive power consumption of AI data centers, Arm’s chips are becoming increasingly popular among cloud computing companies. Awad added that data center chips typically utilize more of Arm’s intellectual property, resulting in the company often receiving “higher overall royalty rates” compared to chips used in simpler devices.

Headquartered in the UK, Arm is 90% owned by Japan’s SoftBank Group. The company does not manufacture chips itself but sells foundational building blocks and other intellectual property to cloud computing companies and enterprises like Apple and NVIDIA for designing chips for laptops, smartphones, and data center processors. Arm generates revenue by charging technology licensing fees and royalties for each chip sold.

For nearly two decades, Arm has been striving to penetrate the lucrative data center market, as transitioning from the once-dominant x86 chips produced by Intel and AMD requires customers to rewrite software and replace some hardware.

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