Arm aims to secure a 50% share of data center CPU sales this year
Arm Holdings anticipates that its share of the global market for data center central processing units will rise to 50 percent by the end of the year, up from around 15 percent in 2024, driven primarily by the AI boom, a senior executive stated....
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Arm Holdings anticipates that its share of the global market for data center central processing units will rise to 50 percent by the end of the year, up from around 15 percent in 2024, driven primarily by the AI boom, a senior executive stated.
Arm's CPUs frequently serve as a "host" chip within AI computing systems, overseeing the functioning of other AI chips. For instance, Nvidia utilizes an Arm-based chip known as Grace in certain advanced AI systems that include two of its Blackwell chips.
According to Mohamed Awad, Arm's infrastructure chief, the company's technology often exhibits lower power consumption compared to rival processors produced by Intel and Advanced Micro Devices.
As AI data centers consume substantial amounts of electricity, Arm's chips have gained popularity among cloud computing firms.
Awad further noted that data center chips typically rely more on Arm's intellectual property, resulting in the company receiving "a lot higher aggregate royalty rate" than for chips designed for less complex devices.
Arm, headquartered in the UK and 90 percent owned by Japan's SoftBank Group, does not manufacture chips itself but provides fundamental building blocks and other intellectual property to cloud computing companies and firms like Apple and Nvidia, which then design chips for laptops, smartphones, and data center processors.
The company earns revenue by charging companies for licenses to use its technology and collects royalty payments for each chip sold.
For nearly two decades, Arm struggled to gain traction in the lucrative data center market, as migrating from the historically dominant x86 chips made by Intel and AMD requires clients to rewrite software and modify some hardware components.
"We've gotten to the point where software is actually being developed for Arm first and foremost," Awad remarked.
Amazon.com has developed in-house data center CPUs using Arm technology, which constituted over half of the chip capacity it added in the last two years, as stated by Amazon in December.
Alphabet's Google and Microsoft have also created Arm-based data center chips, although their initiatives are more recent compared to Amazon's.
Debra A Smith for TROIB News
Arm's CPUs frequently serve as a "host" chip within AI computing systems, overseeing the functioning of other AI chips. For instance, Nvidia utilizes an Arm-based chip known as Grace in certain advanced AI systems that include two of its Blackwell chips.
According to Mohamed Awad, Arm's infrastructure chief, the company's technology often exhibits lower power consumption compared to rival processors produced by Intel and Advanced Micro Devices.
As AI data centers consume substantial amounts of electricity, Arm's chips have gained popularity among cloud computing firms.
Awad further noted that data center chips typically rely more on Arm's intellectual property, resulting in the company receiving "a lot higher aggregate royalty rate" than for chips designed for less complex devices.
Arm, headquartered in the UK and 90 percent owned by Japan's SoftBank Group, does not manufacture chips itself but provides fundamental building blocks and other intellectual property to cloud computing companies and firms like Apple and Nvidia, which then design chips for laptops, smartphones, and data center processors.
The company earns revenue by charging companies for licenses to use its technology and collects royalty payments for each chip sold.
For nearly two decades, Arm struggled to gain traction in the lucrative data center market, as migrating from the historically dominant x86 chips made by Intel and AMD requires clients to rewrite software and modify some hardware components.
"We've gotten to the point where software is actually being developed for Arm first and foremost," Awad remarked.
Amazon.com has developed in-house data center CPUs using Arm technology, which constituted over half of the chip capacity it added in the last two years, as stated by Amazon in December.
Alphabet's Google and Microsoft have also created Arm-based data center chips, although their initiatives are more recent compared to Amazon's.
Debra A Smith for TROIB News
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